‘Cloudflation’ Forces a Re-Think

There was a clear surge in cloud uptake during the pandemic. However, current geopolitical and economic pressures could drive a re-think in 2023 when it comes to cloud.

“In terms of cloud we’ve started to see companies suffer from increased professional services costs, and increased software licensing fees as well. These were in line with contract renewal cycles, where companies were facing increases, largely due to skills costs. What we’re seeing now are those energy costs trickling down, we’re seeing rising public cloud infrastructure costs.” – Penny Madsen, senior research director, IDC Cloud Pulse

And while cloud is still one-third of IT budgets, said Madsen, those budgets are decreasing in line as a proportion of revenue. So now companies are trying to do more with a lot less. That means they’re going to be a lot more strategic about how they consume IT, and what they consume.

“There is a cloud re-think happening. According to Aptum’s Cloud Impact Study, almost half (47%) of respondents anticipate an increase in their organisation’s use of traditional infrastructure over the next 18-24 months. [This is] up from just under a quarter (23%) in 2021. In the past, cloud migrations were used as a capex delay, in the future, cloud costs are seen as rising so need to optimize / reduce exposure.” – Michael O’Hara, MD of distributor DataSolutions