Foundry’s latest cloud computing study looks at the top cloud growth areas and where tech buyers need assistance from vendors to advance their cloud strategy

Foundry, the media, data, and martech division of IDG, Inc., today released its 2023 Cloud Computing Survey. In its 10th year, the research was conducted to measure cloud computing trends among technology decision-makers, including adoption plans, spending, business drivers, challenges, and top cloud growth areas, such as AI.

“While cloud adoption continues at a steady pace, the frenzied acceleration due to the pandemic period is easing,” said Stacey Raap, Marketing & Research Manager, Foundry. “This latest Cloud Computing Survey finds that there is significant budget to be spent on cloud computing initiatives, however migration is calming down after organizations raced to the cloud over the past three years.”

Objectives driving cloud spending

According to Foundry’s report – which surveyed ITDMs in North America, EMEA, and APAC – more than half (52%) of organizations’ current IT environment is in the cloud. This is expected to increase to 63% over the next 18 months. When asked what is driving cloud investments today, respondents said enabling disaster recovery and business continuity (40%), replacing on-premise legacy technology (40%), lower total cost of ownership (34%), improving employee productivity (32%), and greater flexibility to react to changing market conditions (32%).

In order to achieve these objectives, tech buyers anticipate that their cloud spending will grow. Currently, 31% of an organization’s overall IT budget is allocated to cloud computing, and 66% expect their cloud spending to increase over the next 12 months. This increases to 70% for enterprise organizations (1,000+ employees) and is 62% for SMBs (<1,000 employees). Only 6% expect their spending to decrease while 28% think that it will remain the same.

“While cloud capabilities are used throughout all organizational departments, our research tells us that a large portion of spending decisions are controlled by IT,” added Raap. “It’s important to listen to the challenges these teams face when it comes to advancing their cloud computing adoption and help provide them with the assistance they need to move forward, such as cost management and security expertise.”

Challenges stalling cloud adoption

Almost two-thirds (65%) of IT decision-makers agree that their organization is defaulting to cloud-based services when upgrading or purchasing new technical capabilities. However, there are a handful of obstacles getting in the way. The top five challenges to cloud adoption are: controlling cloud costs (35%), data privacy and security challenges (31%), lack of cloud security skills/expertise (24%), integrating cloud resources with on-premises systems (23%), governance/compliance (23%), and a lack of cloud management skills/expertise (23%). Specifically addressing managing cloud costs, organizations are setting up budgets and alerts, implementing cost optimization strategies such as shutting off unused resources, and leveraging automation to monitor and allocate resources based on demand. It’s important to stay on top of these hurdles as 70% of ITDMs say their organization has brought certain cloud applications or services back to an on-premises model.

AI and cloud computing

As AI grows in popularity due to its ability to automate complex tasks, technology vendors are adding AI capabilities to their existing and new tools. The majority (53%) of ITDMs plan to use or adopt AI/machine learning cloud capabilities over the next 12 months, but they need assistance from their current providers in order to know what their options are. Only 44% of ITDMs say they understand their cloud provider’s roadmap for integrating AI tools into their platforms – this increases to 57% for enterprises and is only 37% for SMBs. If cloud providers want to keep their customers from switching vendors due to AI cloud capabilities, they need to ensure their plan is clear.

About the 2023 Cloud Computing Study

Foundry’s 2023 Cloud Computing Survey is the 10th year of this research and was conducted to measure cloud computing trends among technology decision-makers including: adoption plans, spending, business drivers, challenges, and top cloud growth areas, such as AI. The study was fielded throughout August 2023 and is based on the responses of 893 global IT decision-makers that are involved in the purchase process for cloud computing and their organization has, or plans to have, at least one application, or a portion of their infrastructure, in the cloud.