With macroeconomic conditions worsening in the first quarter, organizations have continued slashing spending across the cloud in Q2. I expected this to happen throughout the year as my organization reported at the end of last year that 81% of IT teams were being directed to reduce or halt cloud spending by their C-Suite. But we perhaps didn’t expect the cloud’s top service providers to engage in a cut-throat pricing war so soon in 2023.

However, as companies pull back on spending, I am concerned that executives are pushing IT teams to minimize the core importance – and value – of business continuity in the cloud. As emerging threats to data continue to target businesses, the resilience of cloud infrastructure is still one of its single most important assets. Yet, we are starting to see examples of companies prioritizing costs over continuity, which is leaving them short-staffed and narrowly focused on cloud ROI versus risk avoidance.

Given the crunch on cloud spending, IT teams are rapidly adopting cloud cost optimization technology, and significant investment is also backing solution providers in the space. Of course, finding ways to optimize spending is crucial as budgets are being cut. But cost cutting cannot be prioritized over continuity. Enterprises would practice better risk aversion to current market conditions if they allocated a portion of the new budget they set aside for cost optimization to cloud continuity.

Downtime incidents shine the spotlight on the need for cloud resilience

The past few years have demonstrated why cloud resilience is so important. Just look at Uber, which saw access to its HackerOne, AWS, and Google Cloud Platform accounts compromised in a cyber breach last year. Meanwhile, this year, a wide-reaching ransomware attack impacted over 2,400 VMWare servers, sending security personnel, including government officials, into a fury.

Indeed, the rise in cybercrime – and specifically the increase in attacks against cloud servers – is a legitimate cause for concern for businesses. Unfortunately, it is not the only threat to cloud continuity. Just as IT leaders have had to pay more attention to security risks these past few years, they have had to be equally as fearful of the rise in extreme weather events and their impact on uptime.

Of course, phenomena like earthquakes and wildfires are more frequent in certain parts of the U.S. like states explicitly along the circum-Pacific seismic belt. But the acceleration of climate change has significantly increased the likelihood of any area being battered by a rare weather event. This means more and more business owners have to overcome severe downtime due to the destruction of crucial equipment and infrastructure like data centers and server rooms.

The risk of these downtime events – whether cybersecurity, weather, or human error related – is being heightened as executives push for cost cuts across servers and cloud services, leaving IT infrastructure unstable. Twitter is a shining example of that. Since Elon Musk announced his plan to cut US$1 billion in costs across these IT areas, the social media platform has seen a rapid increase in outages.

The need to manage uptime in a tumultuous economic climate

While every IT professional wants to avoid the financial impact of downtime incidents, an incident would be particularly crippling in today’s economic landscape – essentially rendering all other cloud cost optimization efforts moot. According to Uptime Institute’s 2022 Outage Analysis, the proportion of outages costing over US$ 100 thousand has soared in recent years. Over 60% of failures resulted in at least this much in total losses last year. Meanwhile, 15% cost upwards of US$1 million.

These numbers are likely skewed toward downtime incidents at larger companies, but smaller businesses can still expect to lose hundreds if not thousands of dollars per minute in an incident. And while larger enterprises could work around their losses, small to medium-sized businesses may not be able to. Reportedly, many are already worried about shutting down operations due to the impact of inflation and the threat of a recession.

Therefore, despite the macro headwinds, businesses must also preserve financial health by investing in business continuity in the cloud. This means implementing a cost-effective disaster recovery strategy that protects their cloud-native applications. It is almost impossible to predict when a disaster might strike. But we know data loss events are becoming more frequent.

Businesses must back up data on-demand and restore it as quickly in today’s fast-paced environment. It is the only way to protect mission-critical data 24/7, preserve productivity, and safeguard an organization from the damaging repercussions of downtime. Chief Technology Officers and IT teams that FinOps are confronting to red line cloud costs must ensure they are still taking these steps to avoid putting their companies in peril.

About the Author

Faiz Khan is the Founder and CEO of Wanclouds, a leading multi-cloud SaaS solution and managed service provider. Wanclouds is an AWS, Google Cloud, and IBM Cloud partner.

Before founding Wanclouds, Faiz was an executive at Cisco and played multiple technology leadership roles. Most notably, he led the global cloud automation and orchestration organization. Before that, he built the worldwide data center and cloud practice and was the GM for emerging markets technology practices. Faiz has an MBA in Computer Information Systems from Colorado State University.