Will cloud optimisation control spiralling costs in the post COVID-19 era?

New research from Rackspace Technology has revealed that three quarters of UK IT leaders have concerns around budget due to the pandemic, with cloud optimisation viewed by most as a key way to control spiralling costs.

A rise in spending

According to the research from Rackspace, 73% of businesses in the UK have had to increase their expenditure on technology during lockdown, with the majority (57%) anticipating further increases in the next 12 months.

However, as spending rises, cost control becomes more important, with 67% of IT leaders saying the pandemic has brought new concerns around budget. Funding planned projects (51%) and innovation (45%) are the most common areas of concern.

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Optimising costs through the cloud

As rising tech costs bring budgetary concerns, there is growing recognition of the importance of optimising costs through the cloud. However, the research found that many IT leaders lack either the understanding or the skills to take full advantage of its cost optimisation potential.

Despite nearly all companies leveraging cost optimisation tools within their cloud infrastructure (93%), a lack of understanding may be limiting their ability to seize their cost-controlling benefits.

As little as half (54%) of IT decision-makers actually understand what cloud cost governance and cloud cost optimisation are and how they differ. This not only signals that there may be significant room for improvement in cost optimisation strategies, but also highlights how many businesses face the risk of cloud sprawl and other unwanted costs at this crucial time.

This is reflected in IT leaders’ confidence in their ability to optimise costs: 39% felt that while they or their teams are empowered to make IT budget decisions, they lack the skills to do so. This is despite a vast majority of companies having a dedicated team or individual in house whose responsibility it is to manage IT budgets and costs.

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The cloud

The cloud has emerged as the central focus of modern business operations, with IT leaders recognising cloud infrastructure as one of their top priorities when budgeting.

The cloud is also viewed as an effective way of cutting costs, with many IT leaders planning to optimise their existing cloud infrastructure and some intending to deploy new cloud infrastructure in order to make savings.

In fact, the research states that of those companies that had started or planned to either move to multi or hybrid cloud (71%) or develop cloud-based solutions (77%) in 2020, more than three quarters have now accelerated these plans (80% and 78% respectively).

“Many businesses have found out the hard way in 2020 that their IT systems, resources and spend tracking weren’t ready for Covid-19,” said Martin Blackburn, managing director, EMEA at Rackspace Technology.

“While it is encouraging to see so many IT leaders recognise the central role cloud can play in controlling costs, intention to follow best practices and the actual knowledge required to do so are different things, and support is often required.”

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Nick Ismail

Nick Ismail is the editor for Information Age. He has a particular interest in smart technologies, AI and cyber security.