IT teams are under C-suite orders to increase their cloud spending in 2024, representing a drastic shift from the cloud budget constraints of recent years, according to a new report from Wanclouds.

The managed services provider (MSP) surveyed 500 IT decision makers in the U.S. and found 53% have been given executive orders to increase the amount of money spent in the cloud this calendar year. In fact, 17% of that group plans to “dramatically” increase their cloud spending.

The last time Wanclouds completed its Cloud Outlook survey in 2022, only 17% of respondents planned to increase their cloud spending at all. And, in fact, 40% of respondents had executive orders to decrease their cloud spending – a substantial contrast from today.

Leadership decisions to ramp up cloud investments reflect the indispensability of the cloud, “even as ongoing recession fears and economic conditions spook C-suites and are causing them to pull back budgets in other areas,” the report reads.

This cloud spending rebound also implies that executive leadership feels confident in the size of their cloud footprint, cloud costs are under control and it’s time to start scaling again. The desire to scale is driven in part by generative artificial intelligence (AI) initiatives, which demand hefty cloud budgets and resources and could drive up cloud costs.

The report also found that while leadership is willing to spend more money, they are closely watching the efficiency of those dollars. Organizations are assessing their total cloud spend much more frequently than in 2022. Almost 24% of respondents had completed an assessment within the last few days, and 23% had assessed their spending within the last few weeks.

This finding also represents a major shift from 2022, when 48% of organizations had not assessed their cloud spending in the last six months to a year.

Unexpected cloud costs are the main factor driving the frequency of cost assessments. More than two-thirds of respondents reported negative impacts from unanticipated cloud costs in the last six months to a year. In 2022, 53% of respondents experienced surprise cloud costs.

This is “a worrying statistic that shows the sticker shock of unplanned costs is getting worse despite closely monitoring spending,” the report reads.

However, 68% of respondents claim they have improved their cloud cost optimization over the past year or two. “This paradox raises questions about the efficacy of current strategies and the need for continuous improvement.”

The Wanclouds 2024 Cloud Outlook report also found that hybrid and multicloud computing environments continue to gain traction.

A majority of respondents in the cloud (84%) say their organization is using a hybrid or multicloud framework, representing the ability of diverse cloud infrastructure environments to meet changing organizational needs.

In addition, 72% or organizations are planning to migrate more applications to hybrid cloud environments in 2024. “There is significant momentum behind the adoption of hybrid cloud strategies,” the report reads.

In contrast, only 7% of respondents are running their applications on a single public cloud, and 9% are using a single private cloud.

It’s not surprising that hybrid cloud environments are gaining popularity. They provide a flexible infrastructure that can scale resources up or down for optimal performance and help IT teams optimize costs. IT teams can also easily shift workloads or automate the multicloud migration of containers across cloud environments – a must for supporting AI workloads.

“As businesses navigate this evolving landscape, the ability to balance hybrid environments, ensure business continuity and optimize spending will determine their competitive edge,” the report concludes.