The Problem of Cloud Waste: How to Put an End to Unnecessary Resource Overprovisioning in 2023

Worldwide end-user spending on public cloud services is forecast to grow 21.7% to total $597.3 billion USD in 2023

With the ever-increasing adoption of public cloud services, companies are projected to spend a staggering $50 billion on Infrastructure as a Service (IaaS) in 2023 from leading providers like AWS, Azure, and Google.

As organizations migrate their applications to the cloud or develop new ones, they often overlook the costs associated with their cloud usage. All they really want is peace of mind, even if it means overprovisioning resources. Let's delve deeper into how the tech industry is tackling the issue of cloud waste and explore the valuable lessons we can all learn from it.

The Growth of Cloud Computing in 2023

The more cloud resources you utilize, the higher the possibility of misprovisioning them. It becomes even more complex when you employ multiple instance types across multiple cloud providers. This concern will only become increasingly critical as companies worldwide transition to the cloud or expand their cloud-based operations. According to Gartner, the public cloud services market is set to grow by over 21.7% in 2023, encompassing Software as a Service (SaaS), IaaS, BPaaS, and other services.

SaaS represents the largest segment in public cloud spending, projected to reach $195 billion in 2023. However, it is IaaS that boasts the fastest growth, with estimated spending surging from $91 billion in 2021 to $150 billion in 2023 (an astonishing 65% increase!).

Notably, Its estimated that approximately two-thirds of enterprise IaaS costs are derived from memory and compute resources. This implies that enterprises are expected to spend around $100 billion on compute resources from major cloud providers in 2023.

While the adoption of cloud services enables businesses to innovate and expand faster, it also brings cost management and waste challenges. According to G2s 160+ Fascinating Cloud Computing Statistics for 2023 report, A concerning 32% of cloud expenditure is reportedly lost to cloud waste. While 54% of companies say that they are confident they lack visibility into cloud usage and efficiency.

These two statistics combined suggest there is a clear need for more financial oversight of cloud operations globally.

The Rise of Kubernetes Cloud Waste

After Google donated Kubernetes to the Cloud Native Computing Foundation (CNCF), there has been a notable enterprise shift towards adopting it as the container technology of choice. Many companies rely on their cloud providers to manage their Kubernetes infrastructure, leveraging managed services like Amazon EKS, Azure AKS, and Google GKE. However, larger operators of Kubernetes often prefer to host the service themselves, like Atlassian.

Optimizing cloud resources for Kubernetes is indeed a challenging task, but one that shouldn't be underestimated. One major hurdle that enterprises face is the significant number of manual processes involved in the optimization efforts. Moreover, the complexity of understanding where costs come from often adds to the challenge.

For teams running Kubernetes, cloud costs can sometimes feel like a black box. With so many different open-source options available to manage their infrastructure, the process of consolidating all the cost data becomes tedious and time-consuming.

Another contributing factor to overprovisioning is how Kubernetes works. As a fair system, it provisions resources equally across all clusters and underlying virtual machines, leading to potential waste.

Here's an interesting finding: over 40% of cloud spend is used for non-production resources. These resources are only needed during the 40-hour workweek, leaving them idle for the remaining 128 hours (76%) of the week. But that's not all. Another study revealed that 40% of instances are actually one size larger than what is needed. By simply reducing an instance by one size, companies can slash costs by 50%. And if they downsize by two sizes, savings can reach up to 70%.

Luckily, there are smart ways to reduce cloud waste. One approach is rightsizing cloud resources or scaling them down when they're not needed. In the past, this process was time-consuming and required constant monitoring of cloud infrastructure. However, with automation tools like Morfless, teams can focus on higher priorities and reclaim a healthy portion of their cloud bill. This also allows teams to regain their most valuable asset: time!

Curious about how much budget you could save with automated cloud capacity management? Give Morfless a try by running a free savings report here or explore the Morfles platform by booking a demo. It's time to take the first step to reduce cloud waste and optimize your cloud resources!