Almost $13 Billion in Cloud Waste Predicted for 2018

Wake up and smell the wasted cloud spend. The cloud shift is not exactly a shift anymore, it’s an evident transition. It’s less of a “disruption” to the IT market and more of an expectation. And with enterprises following a visible path headed towards the cloud, it’s clear that their IT spend is going in the same direction: up.

Enterprises have a unique advantage as their cloud usage continues to grow and evolve. The ability to see where IT spend is going is a great opportunity to optimize resources and minimize wasted cloud spend, and one of the best ways to do that is by identifying and preventing cloud waste.

So, how much cloud waste is out there and how big is the problem? What difference does this make to the enterprises adopting cloud services at an ever-growing rate? Let’s take a look.

The State of the Cloud Market in 2018

The numbers don’t lie. For a real sense of how much wasted cloud spend there is, the first step is to look at how much money enterprises are spending in this space at an aggregate level.

Gartner’s latest IT spending forecast predicts that worldwide IT spending will reach $3.7 trillion in 2018, up 4.5 percent from 2017. Of that number, the portion spent in the public cloud market is expected to reach $305.8 billion in 2018, up $45.6 billion from 2017.

The last time I examined the numbers back in 2016, the global public cloud market was sitting at around $200 billion and Gartner had predicted that the cloud shift would affect $1 trillion in IT spending by 2020. Well, with an updated forecast and over $100 billion dollars later, growth could very well exceed predictions.

The global cloud market and the portion attributed to public cloud spend are what give us the ‘big picture’ of the cloud shift, and it just keeps growing, and growing, and growing. You get the idea. To start understanding wasted cloud spend at an organizational level, let’s break this down further by looking at an area that Gartner says is driving a lot of this growth: infrastructure as a service (IaaS).

Wasted Cloud Spend in IaaS

As enterprises increasingly turn to cloud service providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) to provide compute resources for hosting components of their infrastructures, IaaS plays a significant role in both cloud spend and cloud waste.

Of the forecasted $305.8 billion-dollar public cloud market for 2018, $45.8 billion of that will be spent on IaaS, ? of which goes directly to compute resources. This is where we get into the waste part:

• 44% of compute resources are used for non-production purposes (i.e. development, staging, testing, QA)
• Most servers used for these functions only need to run during the typical 40-hour work week (Monday through Friday, 9 to 5) and do not need to run 24/7
• Cloud service providers are still charging you by the hour (or minute, or even by the second) for providing compute resources

The bottom line: for the other 128 hours of the week (or 7,680 minutes, or 460,800 seconds) – you’re getting charged for resources you’re not even using. And there’s a large percent of your waste!

So, what can you do to prevent wasted cloud spend?

Turn off your cloud resources.

The easiest and fastest way to save money on your idle cloud resources is by simply by not using them. In other words, turn them off. When you think of the cloud as a utility like electricity, it’s as simple as turning off the lights every night and when you’re not at home. You can even automatically schedule your cloud resources to turn off when you don’t need them, like nights and weekends, and eliminate 65% or more on your monthly bill with AWS, Azure, and Google.

You already know that you don’t need your servers to be on during nights and weekends, so you shut them off. That’s great, but what if you could save even more with valuable insight and information about your exact usage over time? There’s a lot of cloud waste out there, but there’s also something you can do about it.

About the Author: Jay Chapel is CEO of ParkMyCloud.  After spending several years in the cloud management space, Jay saw that there was no simple solution to the problem of wasted cloud spend - which led him to start ParkMyCloud in 2015. Before that, he spent 10+ years with Micromuse and IBM Tivoli, a provider of business infrastructure management software.

Edited by Mandi Nowitz