The State of Cloud Optimization 2024: Comprehensive Insights

In today's rapidly evolving cloud landscape, reducing cloud costs while enhancing application performance has become a critical priority for both established enterprises and fast-growing digital native businesses.

The “State of Cloud Optimization 2024” report from Granulate, an Intel Company, is a crucial resource in today's cloud-centric IT environment. This comprehensive document provides an in-depth analysis of current practices, challenges, and trends in cloud optimization, offering valuable insights for businesses navigating the complex landscape of cloud computing.

Key Findings

• Prioritization of Cost Cutting: For 2024, the top objective for enterprises has been identified as “Cutting cloud costs.” This highlights the ongoing emphasis on cost-efficiency in cloud operations.
• Demand for Autonomous Tools: The report shows a high average importance rating of 7.29/10 for autonomous optimization tools, revealing a strong market demand for automation in cloud optimization efforts.
• Lack of Optimization Efforts: Alarmingly, 1 in 10 respondents claim their cloud optimization efforts are nearly non-existent, and 40% believe there is significant room for improvement.
• SMBs' Optimization Review Frequency: Over 50% of Small and Medium-sized Businesses (SMBs) review and adjust their cloud expenditure quarterly or less often, suggesting a potential lag in responding to the dynamic cloud environment.
• Correlation Between Costliness and Optimization Difficulty: A notable finding is the strong correlation between the perceived costliness of workloads and the difficulty of optimization. Kubernetes environments, in particular, rank highest in both costliness and optimization difficulty.
• Lack of Dedicated Teams: More than half of the respondents reported the absence of a team dedicated to optimization, indicating a potential gap in focused efforts towards cloud efficiency.
• Rise of AI-Driven Optimization: AI-driven cloud optimization emerged as the most exciting trend for 2024, with 33.7% of respondents affirming this. It reflects the growing interest in leveraging AI for more efficient and effective cloud optimization strategies.

Tool Adoption in the Optimization Tech Stack

The report delves into how organizations are addressing the challenge of cloud optimization through their choice of tools and methodologies. The survey asked participants about the types of optimization tools currently in their tech stacks, offering a range of tools, solutions, and practices as selectable options. The listed options were as following:

1. APM/Monitoring/Observability: These tools, aimed at providing real-time insights into application performance, system health, and user experiences through metrics, logs, and traces, were chosen more frequently than other types. This indicates a strong focus on visibility and organization of cloud resources among organizations.
2. CSP Optimization Tools: Custom solutions designed to enhance efficiency, cost-effectiveness, and performance, provided by Cloud Service Providers and tailored to their services, are critical for specific cloud environments optimization.
3. FinOps Methodologies: These practices, combining financial, operational, and business metrics, are crucial in driving cost-effective cloud usage and maximizing value. This approach reflects a strategic alignment of cloud operations with financial goals.
4. Code Profilers: Tools that analyze program code to identify performance bottlenecks, resource usage, and efficiency opportunities. These are essential for fine-tuning the performance and resource allocation of cloud applications.
5. Log Management and Analysis: Systems focusing on collecting, storing, and analyzing log data play a pivotal role in uncovering trends, diagnosing issues, and enhancing system performance.
6. 3rd Party Troubleshooting Tools: External solutions specializing in areas like network diagnostics or application debugging assist significantly in resolving cloud environment issues.
7. Storage Optimization: Techniques and tools aimed at improving data storage efficiency, accessibility, and cost-effectiveness are increasingly vital in cloud optimization strategies.
8. Rightsizing: This practice of precisely matching cloud resources to workload demands to ensure optimal performance without overprovisioning is becoming more prevalent, though only 23% of businesses reported using it.
9. Runtime Optimization: Focused on enhancing the execution environment of applications, this area is crucial for optimizing performance and resource utilization during operation, but only one in four organizations are using runtime optimization.

The survey results reveal that log management, analysis, and APM/monitoring/observability tools were chosen more often, yet no single type of optimization tool was selected by the majority of respondents​​​​. This suggests a diverse approach to cloud optimization across organizations, with many prioritizing visibility and organization of cloud resources. However, the relatively low usage of rightsizing and runtime optimization indicates that there is likely a significant amount of cloud resources going unutilized.

The findings from the report emphasize the importance of a comprehensive and tailored approach to cloud optimization. It highlights the necessity for businesses to carefully select the right mix of tools and practices to effectively manage and optimize their cloud environments.

The Role of Automation in Cloud Optimization Planning

The report provides critical insights into the role of automation in cloud optimization, particularly in the context of the challenges faced by businesses in managing cloud costs and performance.

Limited Dedicated Teams for Optimization Contrary to expectations, less than half of the surveyed organizations reported having a full-time team responsible for code optimization. Specifically, only 46.2% of respondents affirmed having a dedicated team for this purpose. This trend was consistent across company sizes, with Small and Medium-sized Businesses (SMBs) even less likely to have such teams (affirmative responses under 40%) compared to enterprises (46%).

Turning to Automation In situations where manual efforts in optimization are limited or non-existent, automation becomes a crucial factor. This is underscored by the survey findings, where 60% of respondents considered the autonomous nature of optimization tools to be very to extremely important. The emphasis on automation is further highlighted by the average importance rating of 7.29 out of 10 for autonomous tools, indicating a general high regard for these tools among the survey participants.

Implications for Cloud Optimization The findings from the report suggest a significant reliance on automation to compensate for the lack of dedicated optimization teams. This reliance is driven by the need to manage cloud costs effectively and improve performance, which are key objectives tied closely to cloud optimization. The emphasis on automation reflects a broader industry trend towards more efficient, self-managing cloud environments.

The report's insights into the role of automation in cloud optimization planning offer a clear directive for businesses. To effectively manage cloud resources and achieve optimization goals, organizations must increasingly look towards integrating autonomous tools into their tech stacks. This shift towards automation is critical in addressing the complex challenges of cloud cost management and performance optimization in the absence of dedicated optimization teams​​.

Summary

The “State of Cloud Optimization 2024” report serves as a vital guide for businesses seeking to enhance their cloud infrastructure's efficiency and cost-effectiveness. It provides a clear view of the challenges and opportunities in the realm of cloud optimization, backed by data and trends that will shape strategies in 2024 and beyond.