- AI adoption continues to rise and companies are expanding the cloud to adapt
- Cloud waste has increased for the first time in five years
- Unified teams can be more focused, resulting in less waste
According to Flexera, 85% of companies still consider cloud spend management to be a major challenge, except that artificial intelligence is causing them to spend more than ever on cloud services.
Four-fifths (81%) now use AI, up from 47% in 2024, and at the same time it is generating waste. In fact, cloud waste has increased to 29%, marking the first increase in five years, and Flexera blames AI.
Cloud waste can be caused by a variety of factors, including unused virtual machines and databases, extra computer, storage or memory, old backups, and more.
Article continues below.
AI and cloud bills are rising
At this point, three-quarters (76%) of large enterprises are spending more than $5 million on the cloud each month, while 73% operate multi-cloud environments, so they pay for the cloud and the hardware needed to power their on-premises environments.
“We have gone beyond treating the cloud as a cost-cutting exercise and now see it as the essential foundation for growth and the engine that allows us to turn ideas into global products,” wrote CTO Brian Shannon.
The report’s data also quantifies the dominance of US hyperscalers, with AWS (83%) and Azure (79%) leading Google Cloud, which itself is a few steps ahead of others.
However, things could be about to change for the better, as 71% now operate a Cloud Center of Excellence (CCOE) that increases collaboration between FinOps, business units, and software evaluation management (SAM) teams.
With a CCOE in place, companies can benefit from central governance, consistent standards and better cost control, leading to a more unified approach to AI and cloud, reducing costs and eliminating waste.
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