Public Cloud Spend and Usage Trends: How 2020 Changed the Way We Use the Cloud – VMware Cloud Community

Posted on by Admin
Public Cloud Spend and Usage Trends: How 2020 Changed the Way We Use the Cloud – VMware Cloud Community

Related Post


2020 was a year like no other. The COVID-19 pandemic and subsequent government-imposed restrictions introduced new realities for everyone. For some businesses, the economic pressure of these restrictions made cost-cutting measures the top priority, while others turned to the public cloud to quickly scale infrastructure and meet sudden spikes in demand.

To dive deeper into how the social and economic disruptions of 2020 changed the way we use the cloud, we conducted an analysis of public cloud spend and usage trends among nearly 500 CloudHealth customers globally from January through September 2020.

In this article, we’ll provide a high-level overview of the insights we gathered, including key trends and fluctuations based on specific cloud services and what this all means for business in 2021 and beyond.

More of a visual learner? See our infographic! Here’s a preview…

Key takeaways: Public cloud spend and usage

1. Total cloud spend increased at the onset of the pandemic and, despite fluctuations on a month-to-month basis, remained higher than pre-COVID levels. By September, total cloud spend among the organizations evaluated was 19.3% higher than in April, the first full month of pandemic-related restrictions.

2. Compute spending—or the percentage of monthly cloud budget devoted to compute services—was 4.5% lower in September than in January. After relatively flat spend levels through the early months of the pandemic, compute usage dropped 3.5% in May and continued to decline on a month-to-month basis. A number of factors likely contributed to this trend, including the impact of cost optimization measures to eliminate unnecessary expenses, an influx of purchases of instances via committed use discount pricing programs, and increased adoption of containerized and serverless workloads.

3. In May, spending on cloud service providers’ committed use discount pricing programs (e.g., Reserved Instances and AWS Savings Plans) increased more than 180% among the enterprise organizations evaluated. These programs offer a reduced rate to on-demand prices for instances in exchange for long-term commitments on usage. This indicates that, as the long-term uncertainty of the pandemic came into focus, the financial implications of cloud usage took on new importance.

You can compare cloud costs and discount programs between AWS, Azure, and GCP in our in-depth guide: Comparing Services for the Big Three Cloud Providers.

4. Even as compute usage declined in the wake of COVID-19, investment in the next two most commonly used services after compute—database and storage services—grew slightly. Database services spend was relatively flat when comparing September to January, while storage spend was 5.6% higher. This reflects varied usage by vertical. Dramatic increases in database spend among Technology businesses and those in the Healthcare & Life Sciences sector, for example, were offset by steep declines in the Retail & Consumer Goods and Telecommunications & Utility sectors. https://www.cloudhealthtech.com/blog/cloud-management-challenges-retail

5. Public cloud infrastructure proved valuable for organizations that needed to support new types of large-scale workloads on short notice. For example, those in the Retail & Consumer Goods segment increased compute spend 19.3% in April as customers were forced to shop almost entirely online.

For additional retail industry insights, see this article: The Biggest Cloud Management Challenges for Retailers (and How to Solve Them)

6. Container adoption was 38.7% higher in September than in January, while serverless usage was 13.5% higher. These trends, especially in the context of a decrease in compute usage, indicate that many organizations are increasingly embracing new modern application approaches when deploying workloads in the cloud.

What this means for businesses in 2021 and beyond

1. Cloud financial management is critical for organizations of all kinds, whether to maximize efficiency while scaling infrastructure or to cut costs amid financial pressure. Beyond leveraging discount pricing options and other cloud cost optimization measures, cloud financial management entails creating KPIs in line with profitability and other business performance metrics, implementing policies to achieve those KPIs, and incorporating automation to ensure adherence to those policies. Do you know if you’re tracking the right KPIs? Learn more in our article: How to Set Effective Cloud Cost Management KPIs

2. Rising container usage can introduce a number of unique cloud financial management challenges, such as establishing standards for consistent labeling, identifying unnecessary cost drivers, and allocating usage to the appropriate cost centers. Even those with mature cloud financial management processes may need to account for the nuances of containerized workloads. Get a jumpstart with our five best practices for optimizing your Kubernetes cloud costs.

3. We’re not the only ones keeping track of how public cloud usage is growing. Attackers are increasingly looking for configuration errors to exploit as usage becomes distributed
and more critical workloads move to the cloud. In fact, cloud misconfigurations were identified as one of the two leading causes of malicious data breaches analyzed by The Ponemon Institute for IBM Security’s 2020 Cost of a Data Breach report. As a starting point, make sure you avoid these common misconfigurations that can lead to cloud security data breaches.

4. Organizations that ramped cloud usage unexpectedly in 2020 will need to ensure their operational processes and governance policies adapt accordingly. The decentralized nature and rapid scale of cloud-based infrastructure often render policies for on-premises workloads obsolete. Without visibility into how cloud resources are being used, many of these organizations will struggle to establish configuration standards, improve developer productivity, and maintain compliance with regulatory standards. Assess the effectiveness of your cloud governance strategy against our framework for cloud management maturity: Building a Successful Cloud Operations and Governance Practice

Closing thoughts

The social and economic factors influencing cloud usage in 2020 will have wide-reaching implications in 2021 and beyond.

Those forced to scale down their cloud environments amid reduced demand will undoubtedly incorporate the cost optimization lessons of 2020 into their plans for the future, enabling them to scale efficiently as they rebound following the pandemic. Meanwhile, those that increased usage in response to new trends following the pandemic will need to understand the implications for their business as a whole, including security and compliance risks, developer productivity, and the ultimate impact of their cloud costs on profitability.

In our work helping more than 10,000 organizations worldwide scale cloud usage efficiently, we’ve found that success in the cloud is a direct result of the ability to account for these implications.

To learn more about the operational best practices that have helped the CloudHealth community succeed in the cloud, read our whitepaper, Benchmark Your Cloud Maturity: A Framework for Best Practices.



Source link