Research Says Companies Face a Cloud Cost Quandary 

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Most companies are going “all in” on cloud innovation, but as cloud environments grow in size, they also become weighted with challenges. Tangoe partnered with to explore this dynamic, coined the “cloud cost quandary,” the predicament companies face when they need to invest more in the cloud yet struggle to recognize value on the cloud investments they have already made. 

IT and financial leaders have come to realize that the cloud is essential, but the full benefit of the cloud remains elusive without optimization efforts targeted at reducing cloud waste and lowering costs. CIO’s latest research report and the summary infographic unpacks this quandary but also the approaches companies are using to glean more value out of their cloud-based innovations.  

Here’s a quick look at some of the top takeaways from the CIO research. 

Understanding the Cloud Cost Quandary 

The study shows that while the vast majority of companies (82% +) are investing more in the cloud, 80% of them report cost savings as their biggest issue in achieving benefits from existing cloud deployments. 

Tangoe’s CPO, Chris Ortbals explains how cloud innovators must be vigilant of any overspending or misspending on cloud services, taking responsibility for properly managing their cloud investments: 

“Organizations aren’t always good at buying exactly what they need, using everything they pay for, and carving out the time as well as an AI-powered process for governing cloud use. All of this leads to wasted resources and overspending. Responsibly managing the cloud requires achieving strong visibility and making sense of expansive data sets to realize the most value.” 

As cloud usage grows, so do costs, which means fiscal oversight is necessary in order to avoid the quandary. But there are other challenges too. 

From Costs to Security, the Cloud is Weighted with Challenges 

CIO research shows the following issues are preventing many from realizing key benefits of the cloud. 

It’s hard to follow the cloud money trail. The research reveals some gripping results that hint at root causes behind the issue of cloud cost savings. For instance, data shows that it’s hard to follow the cloud money trail, seeing how resources are used across the organization:  

  • 70% say it’s challenging to account for cloud spending and usage 
  • 66% of the C-suite cite tracing spend and chargebacks of particular concern 

So, it’s no surprise that cloud waste is an issue.  

  • Every month, 12% of cloud licenses go unused.
  • Another 17% are underutilized.  
  • That means 29% of cloud resources are wasted.   

The cloud is failing to meet security and innovation expectations. While security risk is also a key cloud concern found in the research, with 50% reporting that it is “highly challenging” to improve security, other cloud investments simply aren’t meeting expectations. For instance, only 39% of respondents say UCaaS investments have fully delivered anticipated benefits, and only 48% say IaaS investments have fully delivered anticipated benefits.   

Getting Cloud Optimization Right 

Capitalizing on the promises of cloud innovation involves gaining visibility into cloud environments so companies can compare costs and evaluate how effectively they’re using each service. The CIO findings identified the three most important cloud management capabilities as: 

  • Measuring cloud utilization 
  • Measuring and tracking total cloud spend 
  • Cloud optimization and right-sizing 

Most importantly, companies should confront all their cloud assets collectively, addressing optimization with one solution from one partner. Data shows 98% of respondents want cloud management in one platform for SaaS, UCaaS, and IaaS. 

Download the CIO research study and infographic