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Cloud for Organisational Growth, Transformation Three Times More Important than cloud for cost optimisation

An Infosys Research found that while 67 per cent of companies increased cloud spending this year, a staggering 80 per cent forecast higher spend next year

Cloud for Organisational Growth, Transformation Three Times More Important than cloud for cost optimisation

Outlook Start-Up Desk

POSTED ON September 07, 2023 7:30 PM

An important finding in the annual Infosys Cloud Radar 2023 research highlights how the cloud, used for growth and transformation, is three times more important to companies than the cloud used to cut costs. 

The research comprehensively highlights the shift of cloud utilisation from beyond storage and cutting costs to utilising the cloud to gain access to new technology and capabilities, enable new revenue streams and replace or update current systems. It also indicates that while companies will continue to invest in the cloud, less than half of the committed spend is actually being utilised. 

While this does not indicate a near-term problem, companies that fail to meet their cloud contracts face higher costs as cloud providers renegotiate contracts.

The Cloud Radar 2023, by the Infosys Knowledge Institute (IKI), a research arm of Infosys, surveyed over 2,500 respondents from companies across the US, UK, France, Germany, Australia, New Zealand, and the Nordic countries. Based on interviews with subject matter experts and global business leaders, the report highlights the new sophistication and complexity of the cloud and the subsequent management challenges.

One of the challenges that it identified was cloud spending optimisation. 67 per cent of companies increased cloud spending this year, and 80 per cent intend to raise their spending next year. However, only 47 per cent of current cloud commitments are utilised; over $300 billion in corporate cloud commitments remain untapped.

Secondly, about 50 per cent of companies need help managing their cloud costs. They cannot control cloud deployments and 43 per cent report having unclear policies regarding the department or function head authorised to deploy cloud resources. 

Nearly two-thirds of respondents (65 per cent) use three or four cloud vendors, a 75 per cent increase over those who used three or four providers in 2021. Over the past two years, the proportion of companies using a single cloud provider has decreased from 21 per cent in 2021 to 7 per cent in 2023.

For nearly half (45 per cent), either the IT department or business leaders alone decide which cloud technology to deploy or how to manage cloud compliance. Overall, the cloud still matters. Seventy-three per cent agree that cloud migration achieves objectives, which drives further cloud interest and investment.

The key insights from the Cloud Radar 2023 include three strategies for success. The first is master monitoring and prediction. This means establishing guardrails for governance and costs is paramount as the complexity of the cloud grows with the addition of technologies such as generative AI, IoT, etc. 

Next is embedding the business case into the cloud. This calls for forging a transparent, agile, collaborative relationship between IT and business, which can help drive accountability and improve RoI.

Companies can also consider adopting a value-centric cloud operating model. An updated operating model will enable teams to track value flow, create alignment, and encourage engagement around measurable goals.

Anant Adya, EVP of Infosys Cobalt, said that as the cloud continues to evolve, organisations must integrate it as a strategic enabler for their growth and transformation. Leveraging multiple cloud providers allows organisations to optimise resources, improve resilience, and access specialised capabilities, which leads to improved efficiency and accelerated growth. 

“Infosys’ annual Cloud Radar surveys continue to shed light on the ever-changing cloud services landscape and explain cloud adoption dynamics and investments. The report highlights the growing need for enterprises to address the evolving complexity of the cloud landscape and craft the right strategy to better utilise and manage cloud,” he added. 

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