Research Suggests Enterprises Over Spend on Cloud Services

Couchbase Inc., a provider of a modern database for enterprise applications, released research today showing inflexible pricing plans, management tools that don’t give the level of control users need and data not being stored where it needs to be, are adding more than 35 percent to enterprise cloud costs. With enterprises spending more than $33 million a year on cloud services, this represents more than $8.75 million that could be saved or spent elsewhere if enterprises and cloud service providers can solve these challenges.

The survey of 650 senior IT decision makers found:

  • Cloud services are not meeting expectations and are adding to complication and cost – More than one third (36 percent) of enterprises said cloud services adopted in the last three years hadn’t met expectations, while 56 percent said past cloud decisions had made digital transformation projects more difficult in 2021, and 48 percent more expensive.
  • Contributors to over-spending – The factors adding to costs included not having enough insight into spend or ways to optimize costs; the need to improve security and compliance functionality; inflexible pricing plans that don’t give enterprises what they need in a single package; management tools that don’t give the control needed; data not being stored where needed to meet regulatory or performance requirements; and vendor lock-in, meaning enterprises cannot use the specific cloud infrastructure they want.
  • Enterprises are struggling against service limitations – Sixty-one percent of enterprises have had to restrict their digital transformation ambitions because of challenges with cloud services; while 58 percent have chosen cloud services that did not give the ability to scale the business to meet demand.
  • Cloud momentum is unstoppable – Ninety-five percent of enterprises say the increased movement of infrastructure to the cloud is “inevitable.”

“There’s no denying the impact of the cloud, from giving large enterprises increased scalability and agility, to giving smaller enterprises access to services and applications they could never implement in-house,” said Ravi Mayuram, chief technology officer of Couchbase. “Businesses believe they are getting what they need, or else we wouldn’t be seeing this seemingly unstoppable momentum. The question is whether they could be getting even more. $8.75 million is too much to just be a cost of doing business. If enterprises raise their expectations and service providers address inefficiencies, they could open up new opportunities for digital transformation – or simply reduce their costs.”

Despite the costs and challenges they face, enterprises are optimistic about the cloud. Almost every respondent is confident their cloud services are giving them the levels of security, availability, performance, cost-effectiveness, control, scalability and compliance they need.

This is matched by growing cloud spending. By 2025, enterprises want 58 percent of their IT spend to be in the public cloud and say they are more than halfway (56 percent) towards meeting that goal.

Asked specifically about databases-as-a-service (DBaaS), enterprises say cloud services can offer better uptime SLAs than their in-house team, and they can budget more accurately if they switch to consumption-based pricing. This would allow them to reallocate resources currently used managing their database infrastructure that could be better spent elsewhere.

Asked to identify their top concerns around new cloud infrastructure, security of data was identified by 43 percent, followed by managing data in the cloud (33 percent) and futureproofing to meet future digital needs (31 percent), while 30 percent are concerned about keeping costs under control in the future.

“If costs and concerns keep mounting, we will see more organizations struggling to meet their cloud ambitions,” Mayuram said. “The key to a lot of these concerns, and the additional costs enterprises are facing, is control. The more ownership that cloud customers have over their data, and where it’s stored; and the more they can manage their data and applications in the way they want, at the scale they need, the more confident they will be that their data is secure, that their services are future-proofed, and that they have costs under control. We know there’s no putting the cloud genie back in the bottle, and nor should enterprises want to. Instead, we need to ensure it lives up to every expectation.”

For more information, visit www.couchbase.com