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Highlights of the 2019 State of the Cloud Report

It’s that time of year again: RightScale (now Flexera) has published the 2019 version of its annual State of the Cloud report.

In January 2019 Flexera conducted a global survey among IT/Ops, development, cloud architect, and business professionals from a wide range of verticals, including software, financial services, government, and healthcare. Of the 786 respondents, close to 60% are from enterprises with 1,000+ employees. In addition, 63% of the responding organizations have a cloud maturity level of Intermediate (multiple apps deployed in the cloud) and Advanced (heavy use of cloud infrastructure).

In this article we focus on the findings related to the top challenges that the report has pinpointed:  cloud governance and cloud cost management. What do these findings mean and how can NetApp’s Cloud Volumes ONTAP help with them in even the largest enterprise businesses? Let’s find out.

The Findings at a Glance

At the most fundamental level, the state of cloud report shows clearly that public cloud use is pretty close to universal, with 91% of the respondents reporting that they use the public cloud. 84% have adopted a multicloud strategy, leveraging at least 2 public clouds on average and experimenting with 1.8 more. When it comes to implementing a hybrid cloud strategy—using both on-prem and cloud infrastructure—the report shows that 58% of the respondents are pursuing this model, up from 51% in 2018.

Some other key findings:

  • Enterprise cloud spend is growing significantly and quickly, with public cloud spend expected to grow three times faster than private cloud (24% more in 2019 versus 8%).
  • Azure is closing the gap with AWS, with Azure adoption in 2019 reaching 85% of AWS adoption versus 70% in 2018.
  • Container/Kubernetes adoption has jumped to 57% as compared to 49% in the previous year.
  • The usage of PaaS is skyrocketing, led by serverless whose adoption grew by 50% over 2018 (36% in 2019 versus 24% in 2018).

Cloud Report: Wasted Public Cloud Spend

In Figure 1 we can see that just about one-third of the organizations surveyed spent more than $1.2 million on the public cloud last year, with 8% having spent more than $12 million.

Annual Public Cloud Spend


Figure 1: Annual Public Cloud Spend, All Respondents

Enterprises are currently running 79% of their workloads in the cloud (33% public and 46% private). If we segment the public cloud spend figures according to company size (see Figure 2), we see that 50% of enterprises spent more than $1.2 million (versus 22% of SMBs), of which 13% spent more than $12 million (versus 2% of SMBs).

Cloud Spend by Company Size

Figure 2: Public Cloud Spend by Company Size

One of the issues addressed each year in the state of cloud report is how much of this cloud spend is wasted. The respondents themselves estimate that 27% of their public cloud spend is wasted. This is a breathtaking figure in and of itself but Flexera, based on an analysis of its own customer data, estimates an additional 8% of wasted spend. In other words, one out of every three dollars that organizations spend in the public cloud is wasted.

State of Cloud Governance

As shown in Figure 3, managing cloud spend and cloud governance are still the two top cloud challenges for 84% of enterprises, growing from 80% and 77% respectively in 2018.

Enterprise Cloud Challenges, 2019 vs. 2018

Figure 3: Enterprise Cloud Challenges, 2019 vs. 2018

 Interestingly enough, when the cloud challenges are segmented by maturity (see Figure 4), governance becomes the #1 challenge.

Challenges by Cloud Maturity

Figure 4: Challenges by Cloud Maturity

In any case, both top challenges (optimizing cloud spend and improving cloud governance) are closely connected. Without centralized and ongoing governance of cost management policies, IaaS/PaaS/SaaS usage, software licensing costs, and so on, it is more likely that business units will overshoot planned public cloud usage and budgets.

Optimizing Cloud Service Providers’ Costs

We see in Figure 5 that, for the third year in a row, the top cloud initiative planned for 2019 is optimizing existing cloud use and costs. It is also worth noting that 35% of the organizations intend to invest in automating governance policies and processes.

Top Cloud Initiatives Planned for 2019

Figure 5: Top Cloud Initiatives Planned for 2019 

In order to streamline governance as well as lower costs, more and more organizations are setting up central cloud teams. 51% of all respondents (and an even higher percentage of the enterprise respondents: 66%) already have a central cloud team in place. An additional 23% of all respondents (and 21% of enterprises) plan to establish such a team in the near future. In Figure 6 we see the key management and operational functions fulfilled by these teams in order to reduce costs and risk.

Role of Enterprise Central IT in Cloud

Figure 6: Key Roles of Enterprise Central Cloud Teams

 The state of cloud report also highlights that, despite the focus on cloud cost containment, only a minority of companies have implemented the automated processes that are essential for effectively optimizing costs, such as shutting down workloads after hours, rightsizing instances, eliminating inactive storage and more (see Figure 7).

Policies to Optimize Cloud Costs

Figure 7: Automated vs. Manual Cloud Cost Optimization Policies

As we see in Figure 7 above, 73% of the respondents have policies in place to eliminate inactive storage, but only 24% have implemented the automated processes that are critical to effectively enforce those policies. There are third-party tools that can close this optimization gap. For example, NetApp’s Cloud Assessment tools for AWS or for Azure can collect and analyze information from your Amazon EBS volumes, Azure disks, and snapshots, and provide actionable insights into real time cloud storage usage.

Final Note

NetApp’s Cloud Volumes ONTAP is a software-defined data storage management platform that runs as an instance on both the AWS and Azure clouds. Cloud Volumes ONTAP helps manage and reduce cloud cost spend through built-in storage efficiencies such as data compression and deduplication, cost-effective point-in-time snapshots for backups and DR, and best practices such as automated thin provisioning and storage tiering.

The Cloud Volumes ONTAP OnCommand Cloud Manager can help with yet another major cloud challenge: governance. This centralized, single-pane monitoring and management tool helps implement integrated, unified, standard, and repeatable automation and orchestration policies and processes across complex infrastructures and large organizations.

You can download the full state of the cloud report here.

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Yifat Perry, Product Marketing Lead

Product Marketing Lead