APAC firms struggling with rampant cloud spending – report

An new Forrester study released this week indicates that most companies in the Asia Pacific region are grappling with unchecked and excessive cloud spending. The findings reveal that in the past two years, 87% of organisations in the region overshot their allotted budgets for cloud usage. The scenario is equally alarming on a global scale, with 72% companies worldwide facing similar issues.

The current stakes for improving cloud cost management and optimisation (CCMO) strategies are high, given the projected cloud spending to exceed $1 trillion by 2026. However, the study, commissioned by global integration leader Boomi, observes that the CCMO measures taken by companies around the world are being executed too late or without a comprehensive view of the situation.

Only a small fraction of businesses in the Asia Pacific region, merely 5%, have proactive CCMO policies in place. Moreover, only 35% of all organisations have visibility over their cloud expenditure, struggling majorly with identifying and addressing the central issue of their wasteful cloud spending.

Yet, there is a glimmer of hope as 63% of all APAC companies recognise that the effectiveness of their CCMO strategies will depend on the accuracy of their company's data. Highlighting this aspect, Ed Macosky, Chief Product & Technology Officer at Boomi, commented, "the findings are a clear example of integration being left out of the cloud cost equation. When systems are disconnected and data is siloed, companies are only seeing part of their organisations' cloud cost picture, and this lack of visibility impacts tracking and decision making."

A deeper look into the independent study reveals that while 65% of global business leaders prioritise CCMO tactics at earlier stages in the cloud development process, most companies lack proactive strategies at the architecture level. The study also found that just 6% of decision-makers considered their CCMO initiatives as being optimally proactive. Additionally, only 40% of them managed to contain costs at the solution architecture level.

Though most organisations understand the potential of optimising cloud costs at the solution architecture level, fewer than half of the companies actually have a strategy in place to deal with persistent problems, such as excessive storage, lack of integration strategy, and overconsumption of bandwidth.

Macosky further explained, "When systems are disconnected and data is siloed, companies are only seeing part of their organisations' cloud cost picture, and this lack of visibility impacts tracking and decision making." He also added, "More than half (56%) believe their CCMO recommendations are only as good as the data their company can provide. Yet 40% are struggling to fix the root problem of their wasteful cloud spend. The problem is integration is being viewed as a separate entity, when it actually has significant potential to act as a control layer in the reckoning of cloud costs."

On a concluding note, the study foresees an increased complexity in cloud workloads and costs over the upcoming years. It indicates that applications in IT operations, hybrid work, software creation platforms and tools, and digital experiences will have the fastest rise in costs. The study also discovered that 67% of the respondents agree that an integration platform that connects applications, data, and people acts as a game-changer for cloud efficiency and reducing the overall cloud spending from the solution architecture stage.