45% of organizations consider costs when selecting cloud service provider

As cloud computing has evolved, so too has its definition. It now encompasses a broad spectrum of services, from hosted IT services to specific functions like data storage, application management, platform as a service (PaaS), and software as a service (SaaS). In 2024, the current economic uncertainty will significantly influence business decisions, particularly regarding IT and cloud investments, recruitment, and technological expansion.

Recent research from the Cloud Industry Forum (CIF) highlights the value of cloud computing, showing that 100% of surveyed organizations are using cloud-based services, up from 95% in 2023. This data, presented in CIF’s white paper “Tough Times, But Innovation Springs Internal,” indicates the essential role of cloud services despite the challenging business environment.

Key Findings from CIF’s Research

AWS is the most popular cloud service – The survey highlights that Amazon Web Services (AWS) is used by 57% of organizations, Microsoft Azure by 51%, and IBM Cloud also by 51%. Google Cloud Platform (39%) remains a significant player, though the growth of IBM and Oracle reflects a diversifying market.
Cost is the main driver for cloud adoption – Cost efficiency is a primary motivation for adopting cloud services. 33% of respondents cited greater flexibility in IT spending as a key benefit, while 30% emphasized significant overall savings. The need for agility, scalability, and flexibility also drives cloud adoption, making it a strategic choice for many businesses.
Cloud cost control is a major concern – 41% of respondents whose cloud strategies fell short cited uncontrolled or high costs as the primary issue, highlighting the need for better cost visibility and control in cloud services. 94% of organizations reported cost savings from cloud usage, with 47% noting significant savings.
Innovation and AI are a priority of organizations – Businesses continue to prioritize innovation, leveraging new technologies to navigate current challenges and prepare for the future. Artificial intelligence (AI) and machine learning (ML) are particularly significant, with 67% and 68% of respondents, respectively, deeming them critical or very important. Blockchain and the metaverse are seen as less critical but remain areas of interest for future development.
AI is a key priority – AI is a top priority for 42% of organizations, surpassing other key areas such as security, cloud migration, and IT sustainability. This focus on AI highlights its perceived potential to drive significant business advancements.
Cloud infrastructure is important – The survey also indicates a robust position for cloud technology. All respondents acknowledged the continued importance of cloud infrastructure over the next five years, with 82% considering it critical or very important. Cloud SaaS toolsets (74%) and cloud-native applications (68%) are similarly valued.
Environmental, Social, and Governance (ESG) initiatives – The survey indicates that 79% of respondents are measuring the carbon footprint of their cloud data storage infrastructure, with 47% having done so for over a year. Only 7% have no plans to measure this in the future. 34% are measuring the environmental impact of their on-premises storage infrastructure.
Cost is the criteria for selecting service providers – Cost remains the primary consideration when selecting cloud service suppliers, with 45% of respondents prioritizing price. Other factors include the breadth of service offerings (41%), trustworthiness (39%), and the ability to scale (38%). Sustainability credentials also influence decisions for 28% of organizations.
Cloud is a catalyst for business success – Despite the economic headwinds, cloud computing is seen as a catalyst for innovation and resilience. 81% of respondents believe that cloud services enhance their organization’s security. 88% reported that cloud solutions have improved revenue generation, with 43% noting a significant impact. Nearly all respondents (98%) view cloud services as crucial for improving business effectiveness, and 99% see them as vital for driving digital transformation.
There is still room for growth – Half of the respondents indicated that their cloud strategies did not fully meet expectations. They cited challenges including complexity of cloud migration (50%) and unmet expectations regarding generative AI (27%). 27% felt their cloud providers underperformed, and 23% pointed to a lack of in-house skills as a limitation.

Conclusion

In an era of economic uncertainty, businesses are adapting by leveraging the benefits of cloud and AI technologies. Cloud services are now ubiquitous, shifting the focus to maximizing their potential. Business leaders should collaborate closely with service providers to ensure optimal outcomes, while providers must refine and adapt their offerings to support customers in the age of AI.

Source: Cloud Industry Forum