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How are we doing with that cloud spend?

So are we not seeing the value of some cloud investments?   Per McKinsey, nearly two-thirds of industrial companies use cloud computing.   74% fail to yield expected savings or business value.    Half found it more costly than they anticipated, and 40% exceeded their cloud budgets.   

And remember, companies waste about 35% of their cloud budget, per a number of surveys.  

From the CIO Dive piece:  “Our research indicates that the cloud’s value in IT amounts to only about 5% of the cloud’s potential value,” McKinsey said, adding “around 95% of the cloud’s $600 billion value potential lies in business-related functions” such as manufacturing, procurement and supply chain.

Meanwhile, Bessemer Venture has their State of the Cloud 2021 data to compare against.    Highlights – Infrastructure as a Service growth for Microsoft, to over 20% of market share.   Plus, a huge rise in public cloud valuation.  

Here’s your big predictions – 80% of sales interactions will happen through digital channels by 2025.   The VC is also big on the SMB – with SaaS.  

Why do we care?

Let’s assemble the story – companies are investing in cloud computing, wasting some of the spending, and not getting enough value out yet.  Sounds about right – but the answer won’t be not to do cloud.

It will be about getting it right.    Because there is so much potential to unlock – that 95% of the value.     Because the trend is clear.  80% of sales interactions through digital channels?  Sounds about right to me, and what my instincts were saying when I present ecommerce.  

Source: CIO Dive

Source: BVP