Global Cloud Budget Survey Reveals Complexity of IT Spend Management

Rackspace has published the findings from its Global Cloud Budget Survey, revealing some of the key challenges companies have managing their IT and cloud spending.

The survey, Technology Budgets: Managing Shifting Priorities, explored the proliferation of IT budget management across organizations. With many groups within an organization being given part of the IT budget it has become difficult for organizations to have visibility into how the It budget is being spent, making it difficult to control costs.

This is especially true of cloud costs. The survey revealed cloud environments were not subject to appropriate governance and optimization, resulting in considerable waste and excessive spending.

50% of IT decision makers who took part in the survey lacked a basic understanding of cloud cost governance and cloud cost optimization. As a result, the companies are at risk of cloud sprawl – excess machines and workloads running in the cloud, oftentimes without the knowledge of the company. All companies that fail to monitor and manage their cloud environment face a high risk of cloud sprawl occurring, resulting in excessive spending.

The value in investing, tracking, and managing IT spending is understood by IT decision makers, but in practice it can be a major challenge. Virtually all (99%) IT decision makers that took part in the survey said they have a documented IT budget and they have allocated resources to manage spending on IT. However, almost half of those IT decision makers said the staff allocated to the task lack the necessary skills to be effective.

IT cost control is difficult at the best of times, so it is no surprise that it has been especially challenging in 2020 due to the COVID-19 pandemic. 78% of respondents said they had new concerns about budgets and costs in the past three months, and 43% expressed concern about IT budgets being squeezed due to measures that have had to be introduced to keep the business operational during the pandemic.

Business have reported a 59% increase in spending due to COVID-19, with funding for technologies to support remote working during the pandemic coming from planned projects that have now had to be delayed. Video conferencing solutions, VPNs, and virtual desktop infrastructure being some of the main areas of unplanned spending.

“With a 59% increase spend on IT tools, businesses have been forced to adapt quickly to a changing environment which is why we designed the Cloud Optimization solution, to provide customers with an end-to-end solution to help them optimize their cloud workloads for cost and performance,” said Jeff DeVerter, Chief Technology Officer – Solutions at Rackspace Technology.

Through cost and performance optimization, companies are able to prevent cloud sprawl and save on their cloud spending while improving performance, something that is especially important in such a challenging year.

Author: Steve Alder has many years of experience as a journalist, and comes from a background in market research. He is a specialist on legal and regulatory affairs, and has several years of experience writing about HIPAA. Steve holds a B.Sc. from the University of Liverpool.