Summary - State of Cloud 2024

Over the years, I've avidly followed several cloud and cyber-related publications, including the State of Cloud Report 2024 by FINOPs and Flexera, the State of DevOps by Puppet, the Internet Crime Report by the FBI, and the DBIR Report by Verizon. The latest edition of the State of Cloud Report is now available, presenting intriguing observations that prompt some lingering questions.

A prominent finding in this year's survey is the identification of discovering app dependencies during modernization as a significant barrier, affecting over 50% of cases. After enduring persistent cloud waste exceeding 30% in recent years, the discipline of FinOPs has stabilized and become mainstream across many enterprises. This stabilization is reflected in the reduction of cloud waste, which has now dipped below 30%. Notably, while most cloud organizations currently exceed their budgets by 15%, they anticipate a 30% budget increase next year, signaling the continued rapid growth of cloud adoption.

Sustainability is emerging as a critical concern, influencing consumer behavior on a broader scale. Nevertheless, without tangible financial incentives or penalties, sustainability may not significantly impact overall cloud economics. The carbon footprint commitments made by hyper-scaler CSPs (Cloud Service Providers) may exert a growing influence in the coming years, warranting close attention.

Artificial Intelligence (AI) is poised to be a major growth driver in the forthcoming years. AI experimentation is underway and showing promising cost benefits. However, despite this progress, the survey indicates that tangible production business impacts from AI implementations are yet to materialize. Consequently, it may be premature to gauge the return on investment for enterprise AI initiatives such as Gen AI and LLM. Additionally, there seems to be a lack of cost optimization in this area, which could lead to significant cost sprawl issues next year, potentially offsetting gains made in other infrastructure sectors like compute, network, and storage. This is a space to monitor closely for future impacts.

Despite the ongoing surge in cloud adoption, there's a noticeable preference among enterprises for Azure, while SMBs lean towards AWS, with GCP following closely behind. Notably, Azure Stack leads VMWare in this survey, indicating the evolving landscape of private cloud solutions. Hybrid cloud and multi-cloud strategies have matured and are experiencing steady growth. However, the survey does not explore the potential impact of AWS and GCP's removal of egress data transfer fees on multi-cloud architectures.

In summary, the cloud continues to expand at a significant compound annual growth rate (CAGR), with AI and sustainability poised to play substantial roles in its future trajectory. The mainstreaming of the FINOPS discipline is stabilizing cloud cost sprawl, while the cloud economy remains a primary driver of digital transformation across industries.