Cloud trends 2023: Cost management surpasses security as top priority

As cloud usage grew over the past decade, one trend among cloud users remained constant: Security held steady as the top challenge for users. That focus is shifting.

For the first time, since Flexera began its annual survey of cloud decision-makers, security was not the top challenge reported by respondents. As revealed in the Flexera 2023 State of the Cloud Report, released on March 8, 2023, 82% of respondents from across all organizations indicated that their top cloud challenge is managing cloud spend, edging out security at 79%.

These shifting challenges may be the result of organizations becoming increasingly comfortable with cloud security, while needing to manage the greater spend associated with their increased reliance on cloud services. Lack of resources or expertise was reported as a top cloud challenge by 78% of respondents, making it the third major cloud challenge for today’s businesses.

flexera 2023 01 Flexera

With nearly half (45%) of respondents indicating that their expected cloud usage and spend is somewhat or significantly higher than planned due to economic uncertainty, the focus on cloud cost management is, perhaps, no surprise. Today’s economic volatility means that, while cloud adoption and spending continue to be strong, businesses are increasingly aware of the associated expenses.

Yet organizations continue to pursue innovative programs and increased revenue. How does this impact their reliance on cloud? This year’s report—Flexera’s 12th annual exploration into the experiences and insights of users of cloud users (public, private, and multicloud)—draws on responses from 750 IT professionals and executive leaders worldwide, representing a broad cross-section of industries and use cases, to illustrate trends in today’s cloud usage experiences.

Here is a look at some of the top cloud trends of 2023, revealing how cost-conscious organizations can help strengthen their digital transformation initiatives.

Reliance on cloud continues to grow

As cloud adoption becomes increasingly mainstream, more than half of all workloads and data are now in the public cloud. Nearly two thirds (65%) of respondents indicate that their company’s usage level of public cloud is heavy, up from 63% in the 2022 report. Slightly more than one in 10 (11%) report usage of a single public cloud. The majority of respondents (86%) use multicloud (comprised of 12% using multiple public clouds and 72% using hybrid cloud). This reliance on multicloud reflects a small decrease since last year’s findings.

Among respondents using multiple clouds, the top two multicloud implementations are apps siloed on different clouds (reported by 44%) and disaster recovery (DR) or failover between clouds (reported by 42%). Across all organizations, the most-used multicloud tools are security tools (reported by 30%), followed closely by cost optimization (finops) tools (29%). Among enterprises (organizations with 1,000 or more employees), reliance on these tools jumps significantly, with 68% using cost optimization tools and 63% using security tools.

Spending on public cloud exceeds $12 million per year for approximately a quarter (24%) of respondents. Nearly one in five (18%) of respondents reported that their current cloud spend is over their original budget. Cloud spend is also anticipated to continue to grow, with 30% of respondents expecting cloud spend to increase in the next 12 months.

The battle for cloud dominance continues

Amazon Web Services (AWS) and Microsoft Azure remain the leaders of the pack of cloud providers. They’ve maintained a close competition as market leaders, while widening their lead ahead of other competitors. 

In the 2022 report, Azure surpassed AWS in adoption rates. In 2023, AWS again has the lead: 46% of enterprise respondents running significant workloads in AWS, while 41% are running significant workloads in Azure. Public cloud provider adoption, based on each organization’s cloud usage level, indicates that as organizations mature, they gravitate toward market leaders. AWS continues to be used more frequently by organizations that have been using the cloud over a longer period and that are heavy users of cloud.

When it comes to the public cloud providers seeing the greatest amount of expected growth, as measured by the number of respondents that are currently experimenting with it or planning to use it, Google Cloud Platform and Oracle Cloud Infrastructure are tied at 28% each.

flexera 2023 02 Flexera

Controlling cloud costs remains a challenge

Self-estimated wasted cloud spend is 28%, down slightly from 32%, as reported in 2022. But the need to optimize costs and minimize waste continues. Migrating workloads to public cloud continues to present challenges that ultimately can drive costs up.

The top cloud migration challenges include understanding app dependencies (reported by 49%), assessing the technical feasibility (reported by 46%), and right-sizing or selecting the best instance (reported by 42%). Post-migration challenges, such as managing apps and optimizing costs, also indicate the importance of understanding all stages in the migration process in order to best optimize cloud costs.

flexera 2023 03 Flexera

Cloud cost management responsibilities are often spread across teams within an organization. Year over year, vendor management and finance or accounting teams have less responsibility for cloud expenses. Instead, initiatives are shifting to finops teams.   

Finops, the practice of cloud cost management, is a growing priority. Nearly three quarters of respondents (72%) have a dedicated finops team while an additional 14% are planning one in the coming twelve months.

Areas for improved cloud cost optimization include provider discounts, which currently are going unused by approximately two thirds of respondents. Unit economics, a key metric used in finops to measure the efficiency of cloud spend, can be challenging to implement, but 39% of organizations have already implemented a unit economics model for cloud cost analysis. This number is likely to increase in the coming years.

Brian Adler is senior director of cloud market strategy at Flexera. He was previously a senior director analyst at Gartner.

New Tech Forum provides a venue to explore and discuss emerging enterprise technology in unprecedented depth and breadth. The selection is subjective, based on our pick of the technologies we believe to be important and of greatest interest to InfoWorld readers. InfoWorld does not accept marketing collateral for publication and reserves the right to edit all contributed content. Send all inquiries to

Copyright © 2023 IDG Communications, Inc.


This website uses cookies. By continuing to use this site, you accept our use of cookies.