Companies will likely boost their cloud computing budgets by more than 20% in 2023 even as they waste as much as 32% of their spending, according to recent surveys and analysts’ estimates.
Headwinds to economic growth will intensify scrutiny of spending on cloud programs in coming months and trigger efforts to identify waste, McKinsey predicted in a new report.
Many companies in recent years have increased their annual spending on the cloud by as much as 30%, the report finds. A detailed review of the cloud programs that follows five cost-cutting principles can often lead to spending reductions ranging from 15% to 25%.
Financial executives can trim unnecessary spending on cloud programs by stopping “unhealthy growth,” making simple fixes, focusing on cloud “elasticity,” reviewing vendor agreements and sustaining cloud migration. To cut waste in their company's cloud spending, financial executives may want to consider these five steps.