Flexera report shows 84% of organizations struggle with cloud spend

The 14th annual State of the Cloud reveals evolving strategies for managing cloud costs and efficiency

Flexera has published its 2025 State of the Cloud Report, gathering insights from over 750 technical professionals and executive leaders involved in cloud utilization. The report indicates that 84% of respondents view managing cloud spending as the primary challenge facing organizations today. With cloud expenses projected to rise by 28% in the upcoming year, many organizations are reassessing their cloud cost management strategies.

As investments in Artificial Intelligence (AI) continue to grow, nearly one-third of organizations are reportedly spending more than $12 million annually on public cloud services. Presently, cloud budgets are already exceeding targets by 17%, prompting organizations to seek assistance from managed service providers (60%) and expand their FinOps teams (59%) to gain better control over expenditures. The use of FinOps teams has seen an eight percentage point increase year over year among respondents.

“AI is in its prime with no indication of losing momentum,” said Jay Litkey, Senior Vice President of Cloud and FinOps at Flexera and Governing Board Member at the FinOps Foundation. “To stay on budget and accurately forecast for future needs, organizations need to fine-tune how to track and manage their cloud spending and use with FinOps now—or risk wasted investments.”

Although the amount of wasted cloud spending is decreasing, the use of AI-related public cloud services is growing. The report shows a notable increase in organizations using data warehouse services (76%) to support AI model development, with 72% of respondents leveraging generative AI (genAI) services to varying degrees, up from 47% in 2024.

“FinOps is taking center stage as many enterprises prepare for AI services that can impact their cloud resources and budgets,” said Becky Trevino, Chief Product Officer at Flexera. “The increase in FinOps adoption corresponds with a downward trend in estimated wasted cloud expenditure, highlighting the effectiveness of FinOps practices for organizations.”

Additional findings from the report include:

• Cloud repatriation is beginning to take place. Analysts report that some organizations are shifting workloads back to on-premise data center or co-located environments. However, only 21% of cloud workloads have been moved back so far, with ongoing migrations to the cloud continuing to outpace repatriation.
• Cloud sustainability initiatives are increasingly prioritized. Over half (57%) of respondents indicated they have or plan to implement a defined sustainability initiative within a year, including carbon footprint tracking of cloud use. Despite this focus, 57% stated cost optimization takes precedence over sustainability efforts.
• Cost efficiency remains the key metric. A majority (87%) of respondents reported that cost efficiency is the top measure for tracking progress against cloud objectives, marking a 22-point increase over the past year. There is also a significant focus on workload migration numbers and cost avoidance, which increased from 28% in 2024 to 64% in 2025.
• Involvement in managing cloud costs is expanding. A growing percentage (79%) of respondents are now involved in cloud software decisions, with 69% managing the use and costs of Software-as-a-Service (SaaS) applications and 64% overseeing cloud software licensing costs.
• AWS and Microsoft Azure remain leading competitors. The survey indicates that AWS retains the lead in public cloud adoption among small and medium-sized businesses (53% use AWS versus 29% for Azure). Google Cloud Platform ranks third, with 46% of organizations utilizing it for workloads.

Organizations can access further findings in the Flexera 2025 State of the Cloud report.