AI adoption drives ‘unmanageable’ spike in cloud costs – CIO Dive
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IT and financial executives leverage FinOps to rein in software and infrastructure spending, according to a Tangoe report.
Hyperscalers spurred enterprise adoption of generative AI and IT budgets are feeling the crunch. As companies double down on hybrid cloud to power large language model technologies, they are struggling to keep cloud bills in check.
“The price-per-unit for what you need to run AI is higher,” Ortbals told CIO Dive. “You’re running GPUs and TPUs — it’s not just a typical EC2 unit on AWS.”
More than 9 in 10 respondents reported climbing cloud bills in the last year, due in part to AI applications and automation tools. Roughly the same proportion said their FinOps cloud expense management practices need to include AI and other software services in addition to infrastructure.
The move to bring SaaS under the FinOps umbrella got a boost when the FinOps Foundation broadened the scope of the practice to encompass service-based applications and other cloud-based software solutions in February. IT asset managers joined FinOps efforts at roughly one-third of enterprises to help tame rising software audit costs, according to a midyear Flexera report.
“Our cloud spend is going up because we’ve added automation and AI,” Ortbals said of Tangoe.
“We’re running our own internal GPT, which is a cost we’re incurring in the public cloud on top of our normal spend to power our platforms,” said Orbals. “I think a lot of companies are going through that.”
AI has also upped the ante on shadow IT, a prime target area for FinOps-driven cost optimization.
Software procurements that escape the watchful eye of IT comprise more than one-third of SaaS costs, respondents to Tangoe’s study said. Two-thirds of companies uncovered wasted spend in productivity software, a category vendors like Microsoft have infused with LLM agents, coding assistants and other generative AI tools.
The trend amplifies the budgetary implications of shadow IT.
“Consumption-based billing just makes it easier to have rogue IT,” Ortbals said. “Departments can just put it on their purchasing card and off they go.”
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Businesses need better security, quality and flexibility from their data foundations to meet generative AI goals, a Hitachi Vantara report found.
Chief Data and Analytics Officer Ramnik Bajaj set firm migration deadlines for the company’s move to a centralized Snowflake environment.
Subscribe to CIO Dive for top news, trends & analysis
Get the free daily newsletter read by industry experts
Businesses need better security, quality and flexibility from their data foundations to meet generative AI goals, a Hitachi Vantara report found.
Chief Data and Analytics Officer Ramnik Bajaj set firm migration deadlines for the company’s move to a centralized Snowflake environment.
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This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
IT and financial executives leverage FinOps to rein in software and infrastructure spending, according to a Tangoe report.
Hyperscalers spurred enterprise adoption of generative AI and IT budgets are feeling the crunch. As companies double down on hybrid cloud to power large language model technologies, they are struggling to keep cloud bills in check.
“The price-per-unit for what you need to run AI is higher,” Ortbals told CIO Dive. “You’re running GPUs and TPUs — it’s not just a typical EC2 unit on AWS.”
More than 9 in 10 respondents reported climbing cloud bills in the last year, due in part to AI applications and automation tools. Roughly the same proportion said their FinOps cloud expense management practices need to include AI and other software services in addition to infrastructure.
The move to bring SaaS under the FinOps umbrella got a boost when the FinOps Foundation broadened the scope of the practice to encompass service-based applications and other cloud-based software solutions in February. IT asset managers joined FinOps efforts at roughly one-third of enterprises to help tame rising software audit costs, according to a midyear Flexera report.
“Our cloud spend is going up because we’ve added automation and AI,” Ortbals said of Tangoe.
“We’re running our own internal GPT, which is a cost we’re incurring in the public cloud on top of our normal spend to power our platforms,” said Orbals. “I think a lot of companies are going through that.”
AI has also upped the ante on shadow IT, a prime target area for FinOps-driven cost optimization.
Software procurements that escape the watchful eye of IT comprise more than one-third of SaaS costs, respondents to Tangoe’s study said. Two-thirds of companies uncovered wasted spend in productivity software, a category vendors like Microsoft have infused with LLM agents, coding assistants and other generative AI tools.
The trend amplifies the budgetary implications of shadow IT.
“Consumption-based billing just makes it easier to have rogue IT,” Ortbals said. “Departments can just put it on their purchasing card and off they go.”
Get the free daily newsletter read by industry experts
Businesses need better security, quality and flexibility from their data foundations to meet generative AI goals, a Hitachi Vantara report found.
Chief Data and Analytics Officer Ramnik Bajaj set firm migration deadlines for the company’s move to a centralized Snowflake environment.
Subscribe to CIO Dive for top news, trends & analysis
Get the free daily newsletter read by industry experts
Businesses need better security, quality and flexibility from their data foundations to meet generative AI goals, a Hitachi Vantara report found.
Chief Data and Analytics Officer Ramnik Bajaj set firm migration deadlines for the company’s move to a centralized Snowflake environment.
The free newsletter covering the top industry headlines
source
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
