Surging energy consumption and rising cloud costs have IT leaders sweating

Rising cloud costs and energy consumption are driving IT leaders away from cloud-only solutions, marking a big change in enterprise data analytics and management strategies, according to new research.

Analysis from Ocient found only a quarter of IT leaders are prioritizing cloud-only data analytics solutions over the next 12 to 18 months, a significant 10% drop from the 2023 figure.

Similarly, two-thirds said that ‘surprising’ cloud costs are the main reason they struggle to predict spending accurately. Meanwhile, more than half highlighting energy consumption as a top concern, with three-in-ten citing reducing energy consumption as a reason to switch or upgrade data warehouse or database solutions.

“Ocient’s survey indicates a growing recognition among IT leaders that current cloud costs and energy consumption are unsustainable,” commented Brad Shimmin, chief analyst, AI and data analytics, at Omdia Research.

“Enterprises are pivoting to more energy-efficient solutions as they prepare for an increase in data volume and complexity over the next one to three years.”

AI, of course, is a significant factor, with more than nine-in-ten IT and data leaders saying they plan to make AI investments in the next 12 to 18 months.

However, two-thirds noted the scalability of their existing data infrastructure could create challenges while 63% revealed a lack of staffing to support their increasing AI/ML workloads. Six-in-ten cited data movement and pipelines as one of their biggest AI/ML related challenges.

“As data volumes continue to explode, enterprises are facing a dual challenge: rising costs and growing energy consumption. To harness the full potential of data while mitigating these risks, leaders must fundamentally rethink their data analytics strategies,” said Chris Gladwin, CEO of Ocient.

“The latest Beyond Big Data report confirms this shift and highlights the critical significance of sustainable, energy-efficient data analytics and management solutions.”

The report echoes research earlier this summer from Civo, which found that six-in-ten organizations have seen their cloud bills rise over the last year. More than a third concluded that the cloud hasn’t turned out to be as cost-effective as promised.

As a result, 37% of organizations said they were considering a move to alternative infrastructures, with another 7% saying they’d already started transitioning away from dominant cloud providers.

Establishing true costs can be challenging, however, with a survey from CloudZero last month finding that organizations are struggling to calculate overall cloud cost efficiency.

Three-quarters said that cloud service provider costs represented at least 20% of their total cost of goods sold (COGS), with 28% saying the figure was more than half.

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