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2021

COVID-19 accelerates cloud

plans and spend as more

organizations adopt

multi-cloud strategies

STATE OF THE

CLOUD REPORT

Flexera ™ 2 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

© 2021 Flexera. All rights reserved. This work by Flexera is licensed

under a Creative Commons Attribution 4.0 International License.

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the Flexera 2021 State of the Cloud Report as stipulated in the terms of the license. © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Contents

Executive summary ........................................................................\

................................. 9

The highlights ........................................................................\

........................................ 10

Methodology ........................................................................\

......................................... 12

Respondent demographics ........................................................................\

.................... 12

Enterprises embrace multi-cloud ........................................................................\

........... 16

Enterprises combine multiple public and private clouds .................................................. 17

Applications often are siloed on different clouds ............................................................... 18

Almost all organizations are using at least one cloud ....................................................... 20

Organizations use multiple clouds ........................................................................\

.............. 21

Public cloud adoption continues to accelerate ................................................................ 22

36 percent of enterprises spend more than $1 million monthly ........................................ 23

SMB spend is less than enterprise spend ........................................................................\

.... 24

Half of workloads and data are in a public cloud ............................................................... 25

Nearly half of enterprise workloads and data are in a public cloud .................................. 26

Nearly two-thirds of SMB workloads will be in cloud ......................................................... 26

Most believe COVID-19 will increase their cloud usage ...................................................... 27

Organizations are open to moving sensitive data to the cloud ......................................... 28

Dependency mapping is top cloud migration challenge ................................................... 29

Migration challenges are greater for enterprises ................................................................ 30 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Understanding cloud initiatives and metrics .................................................................. 31

Optimizing spend is top cloud initiative for the fifth year running .................................... 31

Organizations measure cloud progress by savings, agility and value ............................... 33

Organizations are taking a centralized approach to cloud ............................................... 34

Enterprises lean heavily on central teams ........................................................................\

.. 35

Enterprise central teams optimize cloud costs and govern use ........................................ 36

SAM and vendor management can lend expertise ............................................................. 37

MSPs help with cloud work ........................................................................\

.......................... 38

Top challenges are security, spend, governance and expertise ........................................ 39

Enterprises and SMBs diverged in their ranking of the top challenges ............................. 39

Enterprise challenges decline, except for security ............................................................. 40

Cost, governance and security remain challenges ............................................................. 41

Managing software costs is challenging in the cloud ......................................................... 43

Organizations struggle to handle growing cloud spend ................................................... 44

Organizations waste significant cloud spend ..................................................................... 45

Cloud provider discounts offer savings opportunities ....................................................... 46

Organizations use automation to optimize costs ............................................................... 47

Containers are now mainstream ........................................................................\

............. 48

Lack of expertise is the top challenge for container use .................................................... 50

Adoption of cloud configuration tools is shifting ............................................................. 51 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Public cloud adoption is evolving ........................................................................\

........... 53

Major public cloud provider use shifting among enterprises ............................................ 54

Choice of public cloud provider changing for SMBs ........................................................... 56

Maturity affects public cloud provider choice .................................................................... 58

Enterprises are growing their public cloud footprint ......................................................... 59

Use of public cloud PaaS services is increasing ............................................................... 61

Most heavily used PaaS services have shifted .................................................................... 61

Enterprises use more PaaS services ........................................................................\

............ 62

PaaS services use increases with maturity ........................................................................\

. 63

Private cloud plays important role ........................................................................\

......... 64

SMBs use private clouds less than enterprises ................................................................... 65

Summary ........................................................................\

............................................... 67

Europe spotlight: introduction ........................................................................\

............... 68

Europe spotlight: highlights ........................................................................\

................... 68

European respondent demographics ........................................................................\

..... 69

European cloud usage accelerates faster due to COVID-19 .............................................. 73

Seven in ten European respondents have cloud teams or centers of excellence ............... 74

Assessing technical feasibility is top cloud migration challenge ....................................... 75

Managing software costs is challenging in the cloud ......................................................... 76

Migrating to cloud is top initiative ........................................................................\

.......... 77

Enterprises embrace multi-cloud ........................................................................\

........... 78

About Flexera ........................................................................\

......................................... 79 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Table of Figures

Figure 1. Respondents by organization size ......... 12

Figure 2. Respondents by industry ........................ 13

Figure 3. Respondents by geography .................... 14

Figure 4. Respondents by level and by role .......... 15

Figure 5. Cloud maturity levels

for all organizations ................................................ 15

Figure 6. Enterprises have a multi-cloud

strategy ................................................................... 16

Figure 7. Enterprise hybrid cloud strategies ......... 17

Figure 8. Use of multi-cloud architectures by

all organizations ..................................................... 18

Figure 9. Use of multi-cloud management tools

for all organizations ................................................ 19

Figure 10. Breakdown of cloud types used

for all organizations ................................................ 20

Figure 11. Average number of public and

private clouds used for all organizations ............... 21

Figure 12. Public cloud spend

for all organizations ................................................ 22

Figure 13. Annual public cloud spend

for enterprises ........................................................ 23

Figure 14. Comparison of enterprise and

SMB cloud spend .................................................... 24

Figure 15. Workloads and data in a public cloud

for all organizations ................................................ 25

Figure 16. Enterprise workloads and

data in a public cloud ............................................. 26

Figure 17. SMB workloads and

data in a public cloud ............................................. 26

Figure 18. COVID-19 impact on planned

cloud usage for all organizations ........................... 27

Figure 19. Type of data that will move to public

clouds for all organizations .................................... 28

Figure 20. Cloud migration challenges

for all organizations ................................................ 29

Figure 21. Comparison of cloud challenges

for enterprises and SMBs ....................................... 30

Figure 22. Ranking of 2021 cloud initiatives

for all organizations ................................................ 31

Figure 23. Top cloud initiatives by cloud

maturity for all organizations ................................. 32

Figure 24. Top metrics for assessing progress

against cloud goals for all organizations ............... 33

Figure 25. Adoption of central cloud team/CoE

for all organizations ................................................ 34

Figure 26. Central cloud team/CoE by

organization size ..................................................... 35

Figure 27. Central IT responsibilities

in enterprises .......................................................... 36

Figure 28. Cloud cost management responsibilities

by IT team for all organizations .............................. 37 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 29. Leveraging MSPs to manage public

cloud resources for all organizations ..................... 38

Figure 30. MSP usage by enterprises

versus SMBs ............................................................ 38

Figure 31. Top cloud challenges

for all organizations ................................................ 39

Figure 32. Comparison of top challenges

for enterprises versus SMBs ................................... 39

Figure 33. YoY comparison of top cloud

challenges for enterprises ...................................... 40

Figure 34. Cloud maturity doesn’t lessen the

severity of every challenge for all organizations ... 41

Figure 35. The ranking of cloud challenges by

maturity level for all organizations ........................ 42

Figure 36. Top software challenges

for all organizations ................................................ 43

Figure 37. Overspending on public cloud

for all organizations ................................................ 44

Figure 38. Respondent self-estimates of wasted

cloud spend for all organizations .......................... 45

Figure 39. Discount types organizations

are leveraging ......................................................... 46

Figure 40. Types of policies to optimize

cloud costs .............................................................. 47

Figure 41. Current and planned container use

for all organizations ................................................ 48

Figure 42. Enterprise use of container tools ......... 49

Figure 43. SMB use of container tools ................... 49

Figure 44. Top container-related challenges for

all organizations ..................................................... 50

Figure 45. Current and planned configuration

tools for all organizations ....................................... 51

Figure 46. Enterprise container tool usage ........... 52

Figure 47. SMB container tool usage ..................... 52

Figure 48. Public cloud provider adoption rates

for current use/experimenting/planned for all

organizations .......................................................... 53

Figure 49. YoY public cloud provider adoption

rates for all organizations ....................................... 54

Figure 50. Enterprise public cloud adoption

rates for current use/experimenting/planned ...... 54

Figure 51. YoY enterprise adoption rates .............. 55

Figure 52. SMB public cloud adoption rates for

current use/experimenting/planned ..................... 56

Figure 53. YoY SMB adoption rates ........................ 57

Figure 54. Public cloud provider adoption based

on cloud maturity level for all organizations ......... 58

Figure 55. Enterprise spend for top three

cloud providers ....................................................... 59

Figure 56. Number of VMs enterprises use by

cloud provider ........................................................ 60 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 57. Public cloud services organizations

are using, experimenting with or plan to use ........ 61

Figure 58. Public cloud services enterprises

are using or plan to use .......................................... 62

Figure 59. Services used based on cloud

maturity for all organizations ................................. 63

Figure 60. Private cloud technologies

organizations are using, experimenting

with or plan to use .................................................. 64

Figure 61. Private cloud providers enterprises

are currently using, experimenting with or

planning to use ....................................................... 65

Figure 62. Private cloud providers SMBs are

currently using, experimenting with or planning

to use ....................................................................... 66

Figure 63. European respondents by

organization size ..................................................... 69

Figure 64. European respondents by industry ...... 70

Figure 65. European respondents by region ......... 71

Figure 66. European respondents by level and

by role ..................................................................... 71

Figure 67. European respondents by cloud

maturity level .......................................................... 72

Figure 68. European respondents compared to

Americas respondents by maturity level ............... 72

Figure 69. Accelerating cloud plans in Europe

due to COVID-19 ...................................................... 73

Figure 70. Adoption of central cloud team/CoE

for European organizations .................................... 74

Figure 71. Cloud migration challenges

for European organizations .................................... 75

Figure 72. Top software challenges

for European organizations .................................... 76

Figure 73. Cloud initiatives

for European organizations .................................... 77

Figure 74. European enterprises with a

multi-cloud strategy ............................................... 78 9 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Executive summary

Cloud adoption was expanding rapidly even before COVID-19. After the pandemic

took hold, cloud plans and adoption increased even faster. Cloud trends

can guide an organization’s digital business decision processes, vendor and

technology selection, and investment strategies. This tenth annual Flexera 2021

State of the Cloud Report (previously known as the RightScale State of the Cloud

Report ) delves into the details of what respondents had to say to reveal what’s

happening with all things cloud—from spend allocation to cost management to

strategies. Leveraging this data can help IT professionals plan the next steps of

their cloud journey.

The report explores the thinking of 750 global cloud decision-makers and users

about the public, private and multi-cloud market. It shares their current and

future cloud strategies, often showing year-over-year (YoY) changes to help

identify trends. And it offers perspective on how some trends have changed

over the years. The survey was conducted in October and November of 2020.

Cloud spend is rising as organizations adopt multi-cloud

strategies and put more workloads and data in the cloud

FLEXERA ™ 2021 STATE OF THE CLOUD REPORT

Terminology used throughout the report:

Enterprises are public- or private-sector organizations with 1,000 or more employees

SMBs are small-to-midsized businesses with fewer than 1,000 employees

Organizations refers to the combination of enterprises and SMBs participating in the survey 10 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Enterprises embrace multi-cloud

• 92 percent of enterprises have a multi-cloud

strategy; 80 percent have a hybrid cloud strategy

• 49 percent silo workloads by cloud, with

45 percent integrating data between clouds

• Only 42 percent of all participating organizations

use multi-cloud management tools

• Respondents use an average of

2.6 public and 2.7 private clouds

Public cloud adoption continues to accelerate

• 36 percent of enterprises spend more than

$12 million per year on public clouds

• 55 percent of enterprise workloads are expected

to be in a public cloud within twelve months

• 90 percent of respondents who answered a

question about COVID-19 expect cloud use

to exceed plans due to the pandemic

• The top challenge in cloud migration is

understanding application dependencies

Understanding cloud initiatives and metrics

• 61 percent of organizations plan to optimize

cloud costs in 2021, making it the top

initiative for the fifth year in a row

• 59 percent of organizations plan to

focus on cloud migration

• 76 percent of organizations use cost efficiency

and savings to measure cloud progress

Organizations are taking a centralized

approach to cloud

• 77 percent of enterprises have a central cloud

team or cloud center of excellence (CoE)

• 54 percent of cloud teams are responsible for

governing infrastructure-as-a-service (IaaS)/

platform-as-a-service (PaaS) usage and costs

• 63 percent of enterprises reported

using cloud managed service providers

(MSPs) to manage public cloud use

The highlights

The Flexera 2021 State of the Cloud Report survey captured insights into how organizations are progressing in

their journey to cloud. This information includes their mix of public and private clouds, the volume of workloads

and data in the cloud, top challenges and initiatives, cost management concerns, and the cloud providers,

technologies and tools they’re using. The following are some of the responses we found the most interesting: 11 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Top challenges are security, spend,

governance and expertise

• Overall, 81 percent indicate that security is a

challenge, followed by 79 percent for managing

cloud spend and 75 percent each for governance,

lack of resources/expertise and compliance

• 55 percent overall report that understanding

cost implications of software licenses is a top

cloud challenge

Organizations struggle to handle

growing cloud spend

• Respondents estimate 30 percent

of cloud spend is wasted

• Organizations are not taking advantage

of all cloud provider discounting

options, but adoption is growing

• Users are leveraging automated policies to

shut down workloads after hours (49 percent)

and rightsize instances (48 percent)

Adoption of cloud configuration tools is shifting

• Terraform (36 percent) and Ansible (31 percent) now

show highest adoption of cloud configuration tools

• Terraform leads among both enterprises

and smaller organizations

Public cloud adoption is evolving

• AWS, Azure and Google Cloud remain the top

three public cloud providers

• Azure continues to narrow the gap with AWS

for enterprise users

Use of public cloud PaaS services is increasing

• Data warehouse has the highest adoption,

used by 54 percent of organizations

• 28 percent of enterprises are experimenting

with machine learning/AI, which is more

than any other PaaS services

Private cloud adoption plays important role

• VMware vSphere continues to lead in private

cloud (36 percent currently use). Microsoft

Azure Stack usage is at 35 percent; AWS Outpost

and OpenStack each have 28 percent

• Private cloud adoption by SMBs is lower overall

than for enterprises 12 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Methodology

A total of 750 technical professionals from around the globe and across a broad cross-

section of organizations participated in the Flexera 2021 State of the Cloud Report survey.

The participants provided insights into their adoption of cloud infrastructure. The

independent panel is rigorously maintained and comprises vetted respondents with

detailed profiles.

Most respondents are cloud decision-makers and users from organizations ranging from

100 employees to more than 10,000 employees. Their answers provide a comprehensive

perspective on the state of the cloud today

Respondent demographics

Organizations of all sizes are using the cloud to help manage IT workloads. However, this

survey skews toward larger organizations. As Figure 1 shows, 85 percent of participating

organizations are enterprises that employ at least 1,000 people. The top challenges that

these larger enterprises face are security, managing cloud spend and governance; SMBs

often struggle with security, managing cloud spend and lack of resources/expertise.

Terminology used throughout the report:

• All respondents = 750

• Enterprise respondents (at least 1,000 employees) = 637

• SMB respondents (less than 1,000 employees) = 113

Figure 1. Respondents by organization size 13 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Businesses in almost all industries leverage cloud computing. As Figure 2 indicates, the

report covers a broad range of industries. The Other category includes those industries

that represent less than three percent of respondents.

Figure 2. Respondents by industry 14 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 3. Respondents by geography

Figure 3 shows the locations of participating organizations around the world:

• The Americas include respondents from the United States,

Canada, Mexico and Brazil

• Europe includes respondents from a broad set of countries

• The Asia-Pacific region comprises respondents from Australia,

India, Japan, Singapore and South Korea

• Rest of world includes respondents not included in

countries above, including African countries 15 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Cloud has now become mainstream. As Figure 5 shows, more than half of respondents use cloud

heavily and have reached the advanced cloud maturity level. Twenty-one percent of organizations

are at the intermediate maturity level, and 19 percent are beginners.

Figure 5. Cloud maturity levels for all organizations

Figure 4 indicates the breakdown of respondents by level within the organization and by

business role.

Figure 4. Respondents by level and by role 16 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Enterprises embrace multi-cloud

Enterprises have almost entirely embraced multi-cloud. As Figure 6 indicates, 92 percent of

respondents reported having a multi-cloud strategy. Eighty-two percent are taking a hybrid

approach, combining the use of both public and private clouds.

Figure 6. Enterprises have a multi-cloud strategy 17 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Enterprises combine multiple public and private clouds

This year’s survey delved into the various cloud combinations used by enterprises with a hybrid

strategy, as Figure 7 shows. Of those enterprises, 76 percent said they’re incorporating multiple

public clouds, while 56 percent report using more than one private cloud. The most common

combination is a mix of various public and private clouds, with 43 percent taking this approach.

Figure 7. Enterprise hybrid cloud strategies 18 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Applications often are siloed on different clouds

While organizations are using multiple clouds, this doesn’t necessarily mean individual

applications are spanning clouds. As Figure 8 shows, apps siloed on different clouds is the most

common multi-cloud implementation, with 49 percent of respondents saying they use it. Data

integration is the most common type of architecture that spans clouds. However, more than

one-third of respondents are using more advanced architectures, such as workload mobility

between clouds and individual apps that span public and private clouds .

Figure 8. Use of multi-cloud architectures by all organizations 19 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Use of multi-cloud cost management tools grew by nine percent

Multi-cloud architectures are more complex and, therefore, more challenging to manage.

Multi-cloud tooling is essential for managing cloud resources cost-effectively and ensuring

strong governance and security. Forty-two percent of organizations are taking advantage of

multi-cloud management tools , as Figure 9 indicates. This is a nine percent increase over last

year’s findings.

Figure 9. Use of multi-cloud management tools for all organizations 20 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Almost all organizations are using at least one cloud

As Figure 10 indicates, 99 percent of respondents are using at least one public or private cloud.

Ninety-seven percent of respondents utilize at least one public cloud, while 80 percent have at

least one private cloud. Seventy-eight percent of respondents are using hybrid cloud.

Figure 10. Breakdown of cloud types used for all organizations 21 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 11. Average number of public and private clouds used for all organizations

Organizations use multiple clouds

As Figure 11 shows, organizations currently use an average of 2.6 public and 2.7 private clouds.

They’re also experimenting with an additional 1.1 public clouds and 2.2 private clouds. 22 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Public cloud adoption continues to accelerate

The increasing use of public cloud is driving up cloud spend for organizations of all sizes. Public cloud

spend is now a significant line item in IT budgets, especially among larger organizations.

As Figure 12 indicates, 31 percent of respondents (nearly double last year’s 16 percent) reported annual

spend of at least $12 million ($1 million per month) on public cloud, while 76 percent spend $1.2

million or more per year ($100,000 per month).

Figure 12. Public cloud spend for all organizations 23 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 13. Annual public cloud spend for enterprises

36 percent of enterprises spend more than $1 million monthly

As Figure 13 shows, 36 percent of enterprises said their annual spend exceeded $12 million and

83 percent reported that cloud spend exceeds $1.2 million per year. These figures represent an

increase over last year, when 20 percent of enterprises reported an annual spend of more than

$12 million and 74 percent reported yearly spend of more than $1.2 million. 24 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 14. Comparison of enterprise and SMB cloud spend

SMB spend is less than enterprise spend

SMBs generally have substantially lower cloud bills because they run fewer workloads in the

cloud than enterprises. As Figure 14 indicates, 37 percent of SMBs are spending less than

$600,000 annually, compared with only six percent of enterprises. However, 38 percent of

SMBs spend more than $1.2 million—up from 32 percent reported last year. 25 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 15. Workloads and data in a public cloud for all organizations

Half of workloads and data are in a public cloud

Figure 15 shows that respondents are running 50 percent of their workloads in public cloud

and they expect to increase that number to 57 percent in the next 12 months. With respect to

data, 46 percent of organizations’ data is in public cloud today and respondents expect to add

another eight percent over the next 12 months. 26 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Nearly two-thirds of SMB workloads will be in cloud

SMBs are moving quickly to the public cloud. As Figure 17 indicates, 69 percent of SMB

workloads and 67 percent of data will reside in a public cloud within the next 12 months.

Figure 17. SMB workloads and data in a public cloud

Figure 16. Enterprise workloads and data in a public cloud

Nearly half of enterprise workloads and data are in a public cloud

As Figure 16 indicates, enterprises are running 47 percent of workloads and storing 44 percent

of data in a public cloud. Enterprise respondents plan to increase workloads and data in public

cloud over the next 12 months by eight percent and seven percent, respectively. 27 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Most believe COVID-19 increased their cloud usage

The emergence of COVID-19 prompted Flexera to add a question to the survey in 2020 that gauges

how the pandemic might impact cloud strategy. Cloud plans and adoption have clearly shifted as a

result of the pandemic.

Responses to the present survey indicate how organizations expect COVID-19 to affect their cloud

plans. As Figure 18 indicates, 90 percent said cloud usage is higher than initially planned. Some of

the increase is a result of the extra capacity needed for current cloud-based applications to meet

increased demand as online usage grows. Other organizations may accelerate migration from data

centers to cloud in response to reduced headcount, difficulties in accessing data center facilities

and delays in hardware supply chains.

As the pandemic runs its course, some organizations may also find that public cloud providers offer

a more reliable option for business continuity.

Figure 18. COVID-19 impact on planned cloud usage for all organizations 28 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Organizations are open to moving sensitive data to the cloud

In the past, some organizations hesitated to put certain types of data in public clouds. This

year’s survey found many respondents are reconsidering. As Figure 19 shows, more than

half of respondents said they’ll consider moving at least some of their sensitive consumer

data or corporate financial data to the cloud, which reflects increasing confidence in the

security practices of cloud providers.

Figure 19. Type of data that will move to public clouds for all organizations 29 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Dependency mapping is top cloud migration challenge

Mapping all the relationships across apps, hardware and networking devices for each IT-delivered

service is notoriously difficult to do, especially in a rapidly evolving environment. It’s therefore no

surprise that 51 percent of respondents reported understanding app dependencies as the top cloud

migration challenge, as Figure 20 indicates.

Other critical challenges include assessing the technical feasibility (of migrating on-premises apps),

assessing on-prem versus cloud costs and rightsizing/selecting the best instance . Organizations need

to address these challenges so they can make informed decisions as to which apps to migrate and

optimize the cost of running on-premises apps that were in the cloud.

Figure 20. Cloud migration challenges for all organizations 30 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Migration challenges are greater for enterprises

While enterprises are improving their understanding of app dependencies (66% cited it as a

challenge last year, down to 51% this year in Figure 21 ), their ability to assess technical feasibility

is still a weak point (48% last year going up to 49% this year), as is the ability to assess on-premises

vs cloud costs (44% last year, 45% this year).

As Figure 21 indicates, both enterprises and SMBs rank understanding app dependencies and

assessing technical feasibility as their top challenges. However, these obstacles are tougher for

larger organizations, which have more on-premises applications and more complex environments.

Enterprises also face significantly larger challenges than SMBs in assessing the cost implications

of cloud migrations.

Figure 21. Comparison of cloud challenges for enterprises and SMBs 31 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Understanding cloud initiatives and metrics

Optimizing spend is top cloud initiative for the fifth year running

For the fifth year in a row, optimizing the existing use of cloud (cost savings) is the top initiative for

the year ahead, followed by migrating more workloads to cloud and better financial reporting on

cloud costs . Figure 22 shows the rankings for this year.

Optimizing usage is a cost-control measure. Migrating workloads can save money and drive

agility. As organizations move more workloads to the cloud, they can retire the technical debt

associated with maintaining and operating traditional data centers. Better financial reporting on

cloud costs gives more stakeholders within an organization actionable insight into cloud usage.

Figure 22. Ranking of 2021 cloud initiatives for all organizations 32 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 23 divides the respondents by cloud maturity: beginner, intermediate and advanced.

Beginners, intermediate and advanced users rank optimizing existing use of cloud as their

top initiative, and each followed with migrating more workloads to cloud . This cost savings

initiative was named by 61 percent of beginner organizations, 71 percent of intermediate-level

organizations and 69 percent of advanced organizations.

Figure 23. Top cloud initiatives by cloud maturity for all organizations 33 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Organizations measure cloud progress by savings, agility and value

Figure 24 lists the ranking of metrics that organizations are using to measure cloud progress.

The top three are cost efficiency/savings, delivery speed of product/services and cost avoidance .

To achieve cost benefits, organizations must optimize as they migrate by rightsizing and using

automation to monitor and optimize spend continually.

Figure 24. Top metrics for assessing progress against cloud goals for all organizations 34 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 25. Adoption of central cloud team/CoE for all organizations

Organizations are taking a centralized approach to cloud

As organizations adopt cloud-first strategies, many are creating a central cloud team or a cloud

center of excellence (CoE) tasked with providing centralized controls, tools and best practices.

The purpose of these teams is to accelerate cloud adoption by centralizing expertise while

reducing costs and risk. As Figure 25 shows, 75 percent of organizations have a central cloud

team or cloud CoE. 35 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Enterprises lean heavily on central teams

Enterprises have a greater need for centralization than SMBs. Spend, governance and

security within larger organizations are much more complex, and teams overseeing those

areas must coordinate across multiple business units and functional areas. As Figure 26

indicates, 77 percent of enterprises already have a central cloud team or cloud CoE,

compared with 55 percent of SMBs. Only eight percent of enterprises and 23 percent

of SMBs have no plans for a central cloud team.

Figure 26. Central cloud team/CoE by organization size 36 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 27. Central IT responsibilities in enterprises

Enterprise central teams optimize cloud costs and govern use

Figure 27 shows the role enterprise central IT teams play in providing guardrails for cloud use.

These cloud teams shoulder most of the responsibility for cloud cost optimization, migration

planning and governance. They also serve in an advisory capacity to help stakeholders make

informed decisions and ensure the apps selected comply with the enterprise governance

framework and security policies. 37 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

SAM and vendor management can lend expertise

As Figure 28 indicates, the cloud team and infrastructure and operations team are actively

involved in enterprise cloud cost management. Their top responsibilities include governing

IaaS and PaaS usage and costs, optimizing cloud spend and report/analyze cloud costs .

These are responsibilities that software asset management (SAM) and vendor management

teams have traditionally handled for on-premises software. Consequently, SAM and vendor

management professionals have extensive experience in optimizing license consumption.

This expertise ensures compliance with contract terms, negotiating and managing favorable

contracts, reclaiming unused licenses, optimizing renewals, and automating license

management for on-premises and enterprise SaaS agreements. Organizations could benefit

significantly from increased involvement by these teams in cloud cost management.

Figure 28. Cloud cost management responsibilities by IT team for all organizations 38 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

MSPs help with cloud work

As Figure 29 shows, 61 percent are outsourcing at least some cloud work, with 29 percent

engaging cloud managed service providers (MSPs) for most of their public cloud use.

Figure 30 indicates that enterprises are more likely to use MSPs than are SMBs.

Figure 29. Leveraging MSPs to manage public cloud resources for all organizations

Figure 30. MSP usage by enterprises versus SMBs 39 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Top challenges are security, spend, governance and expertise

The top cloud challenges in 2021 are all quite close in how often respondents cite them. As Figure 31 shows,

the top five are security, managing cloud spend, governance, lack of resources/expertise and compliance .

Enterprises and SMBs diverged in their ranking of the top challenges

Figure 32 indicates enterprises followed the overall trend with security and managing cloud spend at

the top. But SMBs ranked lack of resources/expertise as their third challenge, followed by governance .

Figure 31. Top cloud challenges for all organizations

Figure 32. Comparison of top challenges for enterprises versus SMBs 40 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Enterprise challenges decline, except for security

Enterprises are gaining experience with cloud, which has led to slight decreases in perceived

cloud challenges. However, due to the growing number of workloads in the cloud and the

development of hybrid and multi-cloud strategies, enterprises still face severe challenges

around security, managing cloud spend and governance . Figure 33 shows the top enterprise

cloud challenges for 2021 compared with 2020.

Figure 33. YoY comparison of top cloud challenges for enterprises 41 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Cost, governance and security remain challenges

Some types of challenges, such as managing multi-cloud environments, become more

manageable as the organization matures and gains experience. But others remain

significant, even in organizations at the advanced cloud maturity level. As Figure 34

indicate, these include security, managing cloud spend, governance and compliance .

One possible reason for this phenomenon is that the factors driving these challenges

present moving targets. Hackers continue to increase their sophistication, necessitating

constant attention to cloud security. Also, new legislation and regulations continue to

emerge, particularly in industries such as financial services and healthcare, as legislators

attempt to catch up with technology.

Figure 34. Cloud maturity doesn’t lessen the severity of every challenge for all organizations 42 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

As Figure 35 indicates, governance is the top challenge for beginners but diminishes for

intermediate and advanced cloud users. The top challenge for intermediate users is lack

of resources/expertise . For advanced users, managing cloud spend and security are the top

challenges.

Figure 35. The ranking of cloud challenges by maturity level for all organizations 43 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Managing software costs is challenging in the cloud

As Figure 36 shows, the top software-related challenge in the cloud is understanding cost

implications of software licenses , followed by challenges related to license compliance.

As stated earlier, software asset management and vendor management teams have

considerable expertise in these areas. Organizations would be well advised to leverage

their skills to address software challenges in the cloud.

Figure 36. Top software challenges for all organizations 44 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Organizations struggle to handle growing cloud spend

Organizations are continuing to rapidly increase their cloud spend. In so doing, they struggle to

accurately forecast their fast-growing cloud costs. As Figure 37 indicates, respondents reported

their public cloud spend was over budget by an average of 24 percent. Moreover, respondents

expect their cloud spend to further increase by 39 percent in the next twelve months. This trend

means it’s more critical than ever to get a handle on forecasting and cost optimization.

Figure 37. Overspending on public cloud for all organizations 45 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Organizations waste significant cloud spend

Wasted cloud spend is a major issue and becomes more critical as cloud costs continue

to rise. As Figure 38 shows, respondents self-estimate that their organizations waste

30 percent of cloud spend. However, spend is likely less efficient as many organizations

tend to underestimate the amount of waste. In working with customers to identify waste,

Flexera has found that, on average, actual waste is 35 percent or even higher.

Figure 38. Respondent self-estimates of wasted cloud spend for all organizations 46 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Cloud provider discounts offer savings opportunities

Cloud provider pricing structures are complex and tricky to decipher. However, taking a close

look at provider discounts could uncover opportunities to reduce costs. Figure 39 indicates that

organizations aren’t taking advantage of all the available discounts. Just over half (52 percent) of

AWS users leverage reserved instances and only 46 percent of Azure users do so. But organizations

seem to be moving quickly to adopt the AWS Savings Plan (44 percent in 2021 vs 30 percent in

2020), a new offering in 2020 that simplifies discounting.

Figure 39. Discount types organizations are leveraging 47 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 40. Types of policies to optimize cloud costs

Organizations use automation to optimize costs

Figure 40 indicates that policies are being leveraged by organizations to optimize costs.

Automated cloud cost optimization policies can save time while ensuring that organizations

monitor their environments consistently to eliminate waste. 48 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Containers are now mainstream

The use of Docker and Kubernetes continues to be considerable. As Figure 41 indicates,

53 percent of organizations use Docker and 21 percent plan to use it. Forty-eight percent

use Kubernetes, a container orchestration tool that leverages Docker, and another

25 percent plan to use it.

Many organizations are also choosing container-as-a-service offerings from public cloud

providers. The AWS container service (ECS/EKS) experienced substantial adoption, with

51 percent using it and another 23 percent planning to use it. Azure Container Service

adoption reached 43 percent, and Google Kubernetes Engine (GKE) reached 31 percent.

Figure 41. Current and planned container use for all organizations 49 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 42. Enterprise use of container tools

Figure 43. SMB use of container tools

As Figure 42 and Figure 43 illustrate, Docker is used about the same between enterprises

(54 percent) and SMBs (48 percent). AWS ECS/EKS is now the most popular container tool

by SMBs (52 percent) and the second most popular with enterprises (51 percent). Enterprises

use Kubernetes more frequently (50 percent) than SMBs (37 percent). (Note: Respondents

could select all container tools that apply to them; there is obvious overlap between some

of the answers.) 50 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Lack of expertise is the top challenge for container use

Organizations face challenges using containers. As Figure 46 indicates, the top container

challenges are the lack of internal resources with expertise, ensuring security and migrating

traditional applications to containers . These resource challenges can be attributed to the

relatively recent adoption of container technology. Migrating traditional applications to

containers is problematic because containers are optimized for microservices, while

traditional apps aren’t.

Figure 44. Top container-related challenges for all organizations 51 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Adoption of cloud configuration tools is shifting

Cloud use often goes hand in hand with adopting DevOps processes. Organizations will

frequently choose to implement configuration management tools that allow them to

standardize and automate deployment and configuration of servers and applications.

As Figure 45 shows, Terraform, used by 36 percent of respondents, leads among all

configuration tools. Ansible is close behind with 31 percent. Chef and Puppet are in a

virtual tie at 29 percent and 27 percent, respectively. (Note: Many organizations use more

than one tool, so the individual percentages add up to more than 100 percent.)

Figure 45. Current and planned configuration tools for all organizations 52 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 46 shows the configuration tools used by enterprises, and Figure 47 indicates the tools

used by SMBs. Overall, the use of configuration tools is higher among enterprises. Terraform

leads for enterprises, with Ansible second at 33 percent and Chef third at 32 percent.

Figure 46. Enterprise container tool usage

Figure 47. SMB container tool usage 53 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Public cloud adoption is evolving

The survey delved into the private and public clouds that organizations are using. For each

public cloud provider, respondents specified whether they’re running applications in that

cloud, experimenting with it, planning to use it or had no plans to use it. Most respondents are

using more than one cloud, so individual percentages sometimes total more than 100 percent.

It’s important to note that adoption—meaning an organization is using a cloud provider—

is only one factor influencing revenue growth for the provider. The survey also explores

other factors, including the number of VMs running and PaaS cloud services used. This year

respondents were also asked about their level of cloud spend per cloud provider.

In 2021, as in previous years, AWS, Microsoft Azure and Google Cloud are the top three public

cloud providers. Figure 48 shows how the major providers stack up for adoption across all

respondents in 2020. Figure 49 compares the rankings for 2020 and 2021.

Figure 48. Public cloud provider adoption rates for current use/experimenting/planned

for all organizations 54 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Major public cloud provider use shifting among enterprises

Among enterprises, Azure is tied with AWS for breadth of adoption, as Figure 50 indicates.

Google Cloud, Oracle and VMware Cloud on AWS round out the top five. Among the top three,

Google (49 percent running workloads) exhibited the most growth over 2020. The highest

percentages for experimentation are with VMware Cloud on AWS and Oracle, which could drive

more adoption in future years.

Figure 50. Enterprise public cloud adoption rates for current use/experimenting/planned

Figure 49. YoY public cloud provider adoption rates for all organizations 55 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 51 shows that AWS and Azure adoption rates rose somewhat among enterprises over the

previous year. Azure is now at 96 percent of AWS adoption among enterprises. Google adoption

rates rose by 44 percent.

Figure 51. YoY enterprise adoption rates 56 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Choice of public cloud provider changing for SMBs

Among SMBs, AWS continues to show a clear lead. As Figure 52 indicates, vendors that

have traditionally appealed to enterprises (VMware, IBM and Oracle) have 10 percent or less

penetration in this market in terms of planning to use. Alibaba Cloud is used widely in China,

but much less so globally. Thirty-six percent of SMBs are experimenting with Azure and

19 percent are trying Google.

SMB respondents with future projects—indicated by the combination of the clouds they’re

experimenting with and planning to use—demonstrated the most interest in Google Cloud

(31 percent), followed closely by VMware Cloud on AWS (22 percent) and Azure (20 percent).

Figure 52. SMB public cloud adoption rates for current use/experimenting/planned 57 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

SMB adoption rates for both Azure and Google Cloud are increasing faster than the rates for

AWS, as Figure 53 indicates. Adoption of VMware Cloud on AWS, IBM Public Cloud, Oracle

Infrastructure Cloud and Alibaba Cloud rose year over year. However, only a small percentage

of SMBs still chose each one.

Figure 53. YoY SMB adoption rates 58 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Maturity affects public cloud provider choice

Cloud maturity correlates to the length of time an organization has been using the cloud. That

correlation is due to the time it takes to build cloud expertise and create processes and best

practices across the organization. Figure 54 indicates public cloud provider adoption based

on the organization’s cloud maturity level.

As the first large-scale cloud provider, AWS is used more frequently by organizations that have

been using the cloud over a longer period—those at the advanced cloud maturity level. Across

all respondents, 82 percent of advanced organizations use AWS compared with 74 percent

using Azure. In the intermediate cloud maturity category, Azure has a slight lead.

Azure enjoys higher adoption for cloud beginners for the second time, holding a sizable lead

over AWS and Google Cloud.

Google remains in third place at all three maturity levels. But its popularity is significantly

higher, at 50 percent, within advanced maturity organizations.

Figure 54. Public cloud provider adoption based on cloud maturity level for all organizations 59 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Enterprises are growing their public cloud footprint

Cloud-first policies and cloud migration are top of mind for senior IT leaders, particularly in

enterprise environments. As a result, enterprises are rapidly increasing public cloud spend

and workload volumes.

Cloud spend is a good indicator of how much an enterprise is using a public cloud provider.

As Figure 55 indicates, 53 percent of enterprises spend $1.2 million or more annually on AWS.

By comparison, 48 percent spend $1.2 million or more annually on Azure, indicating Azure’s

footprint is approaching that of AWS. Thirty-two percent of enterprises reported spending

$1.2 million or more annually on Google.

Figure 55. Enterprise spend for top three cloud providers 60 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

The number of VMs or instances currently running in each cloud provides additional insight into

the size of organizations’ footprints within each cloud. For example, Figure 56 indicates that

Azure is now close to AWS among the larger footprint sizes. Fourteen percent of respondents

run more than 1,000 VMs in AWS compared to 12 percent in Azure.

Figure 56. Number of VMs enterprises use by cloud provider 61 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Use of public cloud PaaS services is increasing

The number of public cloud users leveraging services beyond basic compute, storage and

network services continues to grow.

Most heavily used PaaS services have shifted

Organizations are increasingly leveraging the many PaaS services offered by cloud providers.

Figure 57 ranks the services that organizations are currently using, experimenting with or

plan to use. The top three are data warehouse, relational database as a service (DBaaS) and

container-as-a-service . Organizations are driving this shift due to their growing interest in

leveraging containers to speed deployment, scale operations and increase the efficiency

of workloads running in the cloud.

A look at the respondents experimenting with or planning to use a PaaS service sheds light

on their strategies. Almost half are experimenting with or plan to use machine learning/AI

(46 percent), disaster-recovery-as-a-service (DRaaS) (45 percent), edge services (43 percent),

I oT (41 percent) and stream processing (42 percent).

Figure 57. Public cloud services organizations are using, experimenting with or plan to use 62 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Enterprises use more PaaS services

Enterprises use more PaaS services overall than SMBs. Figure 58 lists the rankings for

enterprise respondents. These respondents place relational database as a service (DBaaS),

container-as-a-service and data warehouse in the top three. While the current use of disaster

recovery-as-a-service (DRaaS) is lower on the list, it has the highest percentage of respondents

experimenting or planning to use the service. Machine learning/AI has the highest level of

experimenting.

Figure 58. Public cloud services enterprises are using or plan to use 63 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

PaaS services use increases with maturity

Organizations increase their use of PaaS services as they mature, as Figure 59 indicates.

For example, advanced organizations use DBaaS (relational), container-as-a-service and

data warehouse significantly more than cloud beginners.

Figure 59. Services used based on cloud maturity for all organizations 64 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Private cloud plays important role

Most organizations are taking a multi-cloud, hybrid approach in which private cloud plays an

important role. As mentioned earlier in this report, about 80 percent of survey respondents

are running at least one private cloud (see Figure 10 ).

As in previous years, respondents reported on the technologies their organizations are

using to run private clouds. Figure 60 lists the technologies organizations are currently

using, experimenting with or planning to use. Respondents could choose more than one,

as there can be overlap with some of these technologies.

Figure 60. Private cloud technologies organizations are using, experimenting with or plan to use 65 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

SMBs use private clouds less than enterprises

Figure 61 shows the ranking of the private cloud technologies enterprise respondents are

currently using, experimenting with or plan to use.

Figure 61. Private cloud providers enterprises are currently using, experimenting with or planning to use 66 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Private cloud adoption by SMBs is lower overall than for enterprises. Figure 62 shows SMB

rankings for the technologies they’re currently using, experimenting with or plan to use.

Microsoft Azure Stack is the top choice, with 27 percent of SMB respondents currently using it.

VMware vSphere is in second place, cited by 20 percent of SMB respondents.

Figure 62. Private cloud providers SMBs are currently using, experimenting with or planning to use 67 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Summary

The 2021 Flexera State of the Cloud Report reveals that COVID-19 had a significant impact on

cloud adoption in 2020. Multi-cloud continues to be the dominant strategy, adopted by nearly

all surveyed enterprises. The most common multi-cloud approach among enterprises is a mix

of multiple public and multiple private clouds. The report also indicates that organizations are

becoming increasingly comfortable with putting even sensitive data in the cloud.

Due to its complexity and dynamic nature, the multi-cloud environment brings many

challenges, such as assessing the suitability of on-premises apps for migrating to the cloud.

The use of public clouds continues to grow dramatically in all organizations. This growth has

driven a significant increase in public cloud spend, and the COVID-19 outbreak may have

driven that spend even higher. As a result of continually increasing cloud spend, optimizing the

existing use of cloud (cost savings) continues to be the top cloud initiative for all organizations

for the fifth year in a row. Organizations are leveraging automated policies to continually scan

and optimize their cloud costs.

The quest to reduce cost and the increasing adoption of DevOps are driving up the use of

containers. Docker and Kubernetes use remains strong, and many users are also adopting

container-as-a-service offerings from AWS, Azure and Google.

The growing migration to the cloud continues to affect organizational structure. Organizations

are increasingly establishing central cloud teams and centers of excellence to best leverage

in-house expertise, especially in managing and optimizing cloud costs.

Organizations are moving to the cloud because of its scalability, economy and reach, and

are using a variety of metrics to measure the resulting business value of cloud. The many

advantages delivered by the cloud have proven to be especially valuable as organizations

adapted over the past year to meet the rapidly evolving needs presented by the COVID-19

pandemic’s impact on business. 68 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Europe spotlight: introduction

The 155 European participants in the Flexera 2021 State of the Cloud Report survey represent about one-fifth of

the total survey audience. They’re executives and high-level managers in IT with significant knowledge of their

organizations’ overall IT budgets. This Europe spotlight provides insight into their perspectives on the technology

and spend issues they face as they develop tech strategies and make technology choices. It includes comparisons

between European organizations and their counterparts in other parts of the world.

Europe spotlight: highlights

• European companies are moving toward the cloud significantly more aggressively due to COVID-19

than companies in the Americas. Eighty-nine percent of European respondents have increased

cloud usage due to COVID-19 compared to 61 percent of respondents from the Americas

• European respondents of the Flexera 2021 State of the Cloud Report survey were slightly more

advanced in their cloud maturity than respondents from the Americas. Sixty-two percent of

European respondents were advanced, compared to 58 percent of those from Americas

• Top cloud migration challenges for European respondents are assessing technical feasibility (52 percent),

understanding app dependencies (49 percent) and rightsizing/selecting best instance (41 percent)

• Top challenges of software in the cloud for European respondents were understanding

cost implications of software licenses (57 percent), ensuring we don’t use too many

licenses (49 percent) and complexity of license rules in public cloud (46 percent)

• Top European cloud initiatives are migrating more workloads to the cloud (70 percent), optimizing

existing use of cloud (cost savings) (59 percent) and progressing on a cloud-first strategy (50 percent)

• Ninety-five percent of European respondents use multi-cloud

Despite a few differences, European organizations face similar challenges

and cite the same tech initiative priorities as their global counterparts.

FLEXERA ™ 2021 STATE OF THE CLOUD REPORT:

Europe Spotlight 69 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

European respondent demographics

As Figure 63 shows, 56 percent of European participants work in organizations with 5,000 or more

employees, compared with 50 percent globally. Representation by European organizations with

1,001 to 5,000 employees is 28 percent, compared to 35 percent globally.

Figure 63. European respondents by organization size 70 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 64 summarizes participation by industry. While the survey encompasses a cross section

of industries, three have double-digit representation: financial services, technology services and

software. The Other category represents a variety of industries, with each representing less than

three percent of respondents.

Figure 64. European respondents by industry 71 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Figure 65 summarizes European respondents by region. More than half (51 percent) are from the

UK, 17 percent are from Germany and 13 percent are from France.

Figure 66 indicates the breakdown of European respondents by level within the organization and

by business role.

Figure 65. European respondents by region

Figure 66. European respondents by level and by role 72 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Cloud has now become mainstream. As Figure 67 shows, more than half (62 percent) of

European respondents use cloud heavily and have reached the advanced cloud maturity level,

compared to 59 percent globally; four percent are beginners. Figure 68 provides a comparison

of organizational cloud maturity in Europe and in America.

Figure 67. European respondents by cloud maturity level

Figure 68. European respondents compared to Americas respondents by maturity level 73 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

European cloud usage accelerates faster due to COVID-19

As Figure 69 shows, slightly higher than normal cloud usage in Europe due to COVID-19 is more

prevalent (by 24 percentage points) than it is in the Americas; the highest level of acceleration

in Europe is four percentage points higher than in the Americas.

Figure 69. Accelerating cloud plans in Europe due to COVID-19 74 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Seven in ten European respondents have cloud teams

or centers of excellence

European organizations allocate a lower percentage of revenue to IT spend than their

counterparts worldwide. In addition, as Figure 70 indicates, 70 percent of European

organizations have a central cloud team or a cloud center of excellence (CoE), compared

to 75 percent globally.

Figure 70. Adoption of central cloud team/CoE for European organizations 75 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Assessing technical feasibility is top cloud migration challenge

Without the best tools, assessing technical feasibility of migrating on-premises apps is difficult.

More than half (52 percent) of respondents reported assessing technical feasibility as the top

cloud migration challenge in Europe, as Figure 71 indicates.

Other critical challenges include understanding app dependencies, rightsizing/selecting the best

instance and prioritizing apps to migrate.

Figure 71. Cloud migration challenges for European organizations 76 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Managing software costs is challenging in the cloud

As Figure 72 shows, the top software-related challenge in the cloud is understanding the cost

implications of software licenses . As stated earlier, software asset management and vendor

management teams have considerable expertise in these areas; organizations would be well

advised to leverage their skills to address software challenges in the cloud.

Figure 72. Top software challenges for European organizations 77 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Migrating to cloud is top initiative

Migrating more workloads to cloud is the top European cloud initiative for 2021 (see Figure 73 ),

followed by optimize existing use of cloud (cost savings) and progressing on a cloud-first strategy .

Figure 73. Cloud initiatives for European organizations 78 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

Enterprises embrace multi-cloud

European enterprises have almost entirely embraced multi-cloud. As Figure 74 indicates,

95 percent of respondents reported having a multi-cloud strategy. Eighty-four percent are

taking a hybrid approach, combining the use of both public and private clouds.

Figure 74. European enterprises with a multi-cloud strategy 79 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .

About Flexera

Flexera delivers IT management solutions that enable enterprises to accelerate the

return on their technology investments. We help organizations inform their IT with total

visibility into complex hybrid ecosystems, so they can transform their IT by rightsizing

across all platforms, reallocating spend, reducing risk and charting the most effective

path to the cloud. Our technology value optimization solutions are delivered by 1,300+

team members helping more than 50,000 customers achieve their business outcomes.

To learn more, visit flexera.com

Contact us for more information or a demo:

+1 800.809.5659 | +44 870.871.1111

[email protected]

flexera.com 80 © 2021 Flexera. All rights reserved. This work by Flexera is licensed under a Creative Commons Attribution 4.0 International License .