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Gone are the days of local servers. The growth of Cloud computing has rapidly transformed the way we consume and store digital information. As businesses and individuals increasingly rely on Cloud-based services, demand for robust, scalable, cost-effective and sustainable infrastructure to support these services has reached unprecedented levels.

John Lacey, Co-Founder and Managing Partner at Ubertas Consulting
John Lacey, Co-Founder and Managing Partner at Ubertas Consulting Ubertas Consulting

Businesses realise that having them no longer makes economic sense. Maintenance is costly, and the benefits limited. Rooms filled with local services also take up costly space that could be used more efficiently, and effectively.

Research shows that Cloud services now represent a global market worth about $598 billion, from individual use to Fortune 500 companies. According to a Gartner report, this market will continue to grow, and the forecast for 2024 is 20.4% to $678 billion.

Other research reveals that small and medium-sized businesses (SMBs) are also increasingly cozying up to Cloud services. Last year, approximately 44% of them started using the Cloud, which will increase to 63% this year.

About 98% of companies use Cloud services globally, compared to 87% of Fortune 500 firms. An Amazon report says 100% of Fortune 100 companies use AWS.

Spending more on the Cloud

For now, the explosive growth of cloud computing shows no sign of slowing down. Businesses globally are spending between $220 billion and $600 billion, depending on who you ask. About 30% of CTOs and IT heads say the companies they work for have plans to increase spending on the Cloud.

Why is it growing so exponentially, you ask? Easy. Cloud computing is usually more efficient and less costly than private servers. It also offers greater flexibility and speed in meeting the transformational requirements firms operating in fast-paced environments demand.

Organisations that integrate Cloud services correctly will lower infrastructure costs by about 40%, increase productivity by 50%, and speed up go-to-market by 60%, ensuring long-term business success.

But here is the catch. Inversely, those who get it wrong will experience financial losses, expose their businesses and clients' data to security breaches, and ruin their reputations so severely that they will potentially put their businesses at risk of collapsing.

A recent Everest Group report noted that the biggest problem companies might face this year is the waste of their cloud services. It surveyed over 450 companies and found that 82% of global firms struggle with over 10% of their cloud spending getting wasted. Out of them, 68% said they lost 20% of their Cloud budget. And 38% dealt with losses of more than 30% of their cloud spend. Lastly, research has found that 72% of international businesses exceeded their set cloud services budgets in 2023.

Waste is frequently caused by overprovisioning, inefficient resource use, and a lack of cost optimization measures. Given the sheer magnitude and accelerated use of Cloud services, waste could become businesses' most significant issue this year and beyond.

Cloud cost should be included as one of the non-functional requirements, and companies or products can fail if they do not consider it early. Costs must also be aligned with the business model, which requires identifying the key dimensions for generating revenues and profits. Building Cloud services is a series of trade-offs, and companies need to find the right balance between technical and business needs and look to maximise value rather than overly focus on minimising costs.

Exceeding the budgets

With global public Cloud spending expected to reach up to $700 billion this year, the stakes are high for improving Cloud cost management and optimization (CCMO) strategies.

Although research shows that about 65% of business leaders prioritise CCMO early in their Cloud integration phase, most firms must implement initiative-taking strategies at the earlier architecture level.

Very few decision-makers, about 6%, report that their Cloud cost remediation strategies are as proactive as possible, and about 40% say they limit costs at the solution architecture stage.

Most companies know they can optimise Cloud costs at the solution architecture level. However, fewer than 50% of them have plans to resolve ongoing issues, including 52% who plan for excessive storage, 44% who lack integration strategy, and 42% who incur overconsumption of bandwidth.

Meanwhile, 35% of business leaders globally lack a Cloud architecture that supports cost containment at the integration level, preventing them from progressing with their financial operation cost control initiatives.

The Importance of a Well-Architected Framework

A Well-Architected Framework (WAF) allows businesses to maximise the value of Cloud services and minimise the risks. It also enables them to enhance the quality and efficiency of their Cloud-based solutions, optimise their use of Cloud resources, and achieve better business outcomes.

WAF increases efficiency by enabling companies to identify and mitigate the issues and risks associated with Cloud-based solutions. It helps them minimise the threat of security breaches, system downtime, and other risks that could impact business operations.

WAF enables scalability and flexibility by allowing them to design solutions for that purpose. It helps them to adapt to evolving needs and handle increased workloads without compromising performance.

A Well-Architected framework helps to optimise resource utilisation. This results in lower costs, unnecessary spending, improved efficiency, and a better return on investment.

WAF is indispensable for building applications and workloads that are universally available, fault-tolerant, and perform optimally. It helps ensure accessibility and responsiveness, even when unexpected events occur.

Final considerations

Cloud computing has become very convenient, but it's essential to understand that it is not without its issues. For example, poorly planning cybersecurity for Cloud applications, such as allowing users to rely on simple passwords, failing to use multi-factor authentication, or not applying patches and updates, can leave businesses and their customers vulnerable to attacks.

Before Cloud computing, cybersecurity was already a daunting challenge for many businesses and organisations. With the Cloud, those challenges are even more significant because they widen the threat surface and complexity.

Firms globally lost billions of dollars to ransomware and hacked servers, and the cybercriminals who attacked them also compromised their user or customer data, ruining their reputation and losing trust. These incidents are costly economically and because of the time needed to bounce back from them.

The bottom line is that you should not leave the door open to hackers by configuring your cloud correctly and implementing the most well-architected framework, which will give your business the long-term success it deserves.