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Enterprises Re-evaluate Cloud Strategies Amidst Pricing Complexity and Wasted Spend

The intricacy of public cloud pricing is driving a 'cloud reset'. Enterprises are optimizing their cloud mix and considering private cloud for better cost control and security.

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In this image we can see the information board, buildings, shed, trees, electric cables and sky with clouds.

Enterprises Re-evaluate Cloud Strategies Amidst Pricing Complexity and Wasted Spend

Enterprises are re-evaluating their cloud strategies due to the complexity of public cloud pricing and increasing awareness of wasted spend. A 'cloud reset' is underway, with companies optimizing their cloud mix and considering private cloud as a key component.

The intricacy of public cloud pricing, with hidden fees and data egress charges, is making it challenging for CFOs to predict and manage costs. Enterprises believe that 94% of their public cloud spend is wasted, with nearly half thinking more than a quarter is unnecessary. This has led to a 'cloud reset', with companies optimizing their cloud mix based on workload characteristics, risk profiles, and cost control, rather than adopting a public cloud-first approach.

The shift in cloud usage is driven by various factors. In the USA, increased adoption of SaaS solutions is occurring due to the need for agility, scalability, and cost efficiency in IT infrastructure. This is fueled by venture capital investments in AI-powered SaaS, automation, and data analytics. Meanwhile, regional demands for resilience and mobility in Asia-Pacific countries like China, Japan, and India are also causing changes in cloud usage.

The 'cloud reset' serves as a warning for CEOs, CFOs, CIOs, and boards to adopt more disciplined cloud strategies and workload governance. Private cloud is no longer just a backup plan but a key component of a smarter, more strategic cloud approach. The unpredictability of public cloud costs clashes with the rising demand for financial transparency, especially for generative AI workloads. Modern private cloud platforms now offer automation, self-service, and agility, challenging the advantages once exclusive to public cloud environments. Security concerns, particularly data governance and compliance, are also driving enterprises to repatriate workloads from public cloud to private infrastructure.

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