Organizations Will Finally, and for The Long Term, Control Cloud Spending

By Kelly Teal

Cloud computing in 2023 will be defined by a single trend: organizations actively controlling costs and optimizing their environments.

The free-for-all that was executives’ approaches to cloud computing spending since COVID-19 has come to an end. Indeed, 2023 will mark the year that the organizations channel partners serve will actively seek to make the most of their cloud infrastructure and services. Yes, financial executives will push for cuts in expenses. But leaders involved in cloud computing will rely on informed guidance and metrics to not just rein in that spending, but to optimize it. After all, cutting to the bone rarely brings about desired improvements in employee productivity, efficiency or loyalty — all critical components of a global workforce impacted by the Great Resignation and ongoing Quiet Quit.

This trend, forced by seemingly endless, negative economic factors, will give the channel a boon. Managed service providers, system integrators, consultants, agents and other finance-savvy channel partners will find themselves integral to helping customers make the most of their cloud environments in 2023 and beyond.

How Did We Get Here?

In 2022, a recession loomed and more than 143,000 layoffs had swept the tech industry by the beginning of December — all prompted by COVID-19 and ensuing pandemic fallout. As inflation remained at historic highs and supply chain shortages continued, hurting businesses and consumers across the board, CFOs, CIOs, heads of procurement and line-of-business leaders all began to understand something important: that their unfettered outlay on cloud infrastructure and services had gone from helpful to burdensome. Too many resources lay unused or underused, yet the cloud-consumption meter still ticked away. Too many employees had engaged in shadow IT, purchasing unauthorized cloud applications to help them do their jobs. As a result, executives have realized they have been footing the bill for duplicate cloud applications and products.

Recall that the pandemic spurred sudden migrations to cloud so organizations could support employees working from home or other remote locations amid global lockdowns. Cloud computing was essential to keeping business afloat. However, mass, often unmonitored deployments, led to overspending and overprovisioning. This has represented a critical development. Cloud costs a lot more than the industry, keen to jump-start recurring revenue as the tech sector moved from hardware to software, originally led people to believe.

Many channel experts saw that writing on the wall and started stepping in to help customers reel in cloud expenses. Those efforts, though, likely will take time to show in terms of lower costs because many cloud providers put clients on contracts, typically lasting three years. A number of cloud deals signed in 2020 will reach expiration in 2023. This will give cloud managed service providers, consultants, integrators and other channel partners a chance to really shine. They have the opportunity to step in and help organizations stem the cloud computing tide. Cloud will remain indispensable. But it doesn’t have to cost a fortune.

How Channel Partners Will Win

As such, cloud channel experts may recommend customers rely on one of the many cloud expense and optimization management platforms available. These act far more effectively than manual spreadsheet tracking, especially when multiple SaaS and UCaaS apps, and test and storage buckets, are in play. Often, there are dozens or hundreds of these assets within an organization; maintaining and tracking them requires insights and capabilities Excel and Google Sheets do not have.

On top of that, organizations lose internal experts and institutional knowledge when they shed staff. As such, more businesses will turn to their channel partners to oversee their cloud costs and optimization. Knowledgable MSPs, consultants and other partners will work alongside the heads of clients’ IT, finance and procurement to figure out where cloud cuts make sense and where beefing up cloud resources makes even more sense. The trend toward thoughtful cloud computing outlay will take serious root in 2023 and continue into the foreseeable future.