Industry executives and experts share their predictions for 2025. Read them in this 17th annual VMblog.com series exclusive.
By Bill Buckley, senior vice president of engineering, CloudZero
Across the globe, the cloud computing market has skyrocketed. AI has driven much of that accelerated spending and will continue to do so throughout the foreseeable future. Goldman Sachs foresees a $2 trillion global cloud bill by 2030, with AI representing as much as 15%.
This surge in cost signals a rise in innovation that will introduce unprecedented challenges and opportunities for the most ambitious cloud spenders. As always, the winners will combine quality and efficiency, building profitable businesses on top of novel technologies – without either, none can thrive. Read on to look at seven predictions for the rapidly changing cloud-native landscape in 2025 – and how you can maximize your cloud efficiency amid them.
1. Emerging technologies like AI and containerization will increasingly drive cloud cost management strategies
As more organizations adopt technologies like AI and containerization, decision-making will depend more on robust cloud cost visibility. In the early experimental stages, organizations can comfortably write off AI costs as R&D. But these costs – especially those associated with successful products and features – will eventually hit companies’ COGS and, consequently, their gross margins.
Companies will inevitably have to manage their AI costs. They’ll need systems to connect every penny they spend on AI to business outcomes so that they can optimize costs, refine pricing and packaging models, and embark upon (or terminate) the most promising AI projects.
2. Fragmentation in the cloud
Many third-party platforms that help companies bring AI and AI-powered solutions to market have cropped up in 2024 and will continue in 2025. Additionally, as good data is the lifeblood of AI, companies have increased their investment in data platforms that feed their AI applications. As companies leverage more third-party platforms, they will see increased fragmentation in their cloud environments, leading to increased difficulty in normalizing and managing associated costs.
Increasingly, companies are looking to use tooling to assist with this data problem. Through either build or buy strategies, companies will need to deploy more software to help them get timely visibility into this increased vendor sprawl.
3. Higher demand for real-time insights
Many teams are still struggling to predict cloud costs, with many lacking the right tools or knowledge to make early estimates. That could be a wake-up call for leaders with a false sense of how prepared their teams are to manage cloud costs. The good news is that we expect to see continued advancements in monitoring tools in the coming year, which should improve real-time insights. The best tools will continue to offer easy-to-leverage ETL and normalization to allow a single pane of glass across all costs. As AI spending increases, these tools will make bringing in non-cost data – like revenue and user activity – easier. This shift will lead to a better understanding of unit economics.
4. The FinOps role will need redefining
The expectations for FinOps professionals are growing unsustainably broad, which will prompt a need to redefine these roles. For instance, many job descriptions ask FinOps professionals to have DevOps, architecture, and accounting skills – essentially, wearing all hats simultaneously. This could spark debates within the community about whether the role needs more specialization or whether companies are setting themselves up for failure by demanding too much from too few people. This could be one reason why the market doesn’t seem to have caught up in hiring for FinOps roles. In 2025, organizations must reevaluate FinOps roles and redefine their desired talent.
5. More companies will turn to cloud unit economics to understand their cloud spend
Global cloud spending is poised to reach at least $824 billion in 2025. Cloud spending is reliably a top two or three areas of overall expenditure for SaaS companies, and AI is driving up cloud costs faster than expected. 50% of SaaS companies spend 30% or more of their revenue on cloud costs. Organizations need to find a way to change the status quo. As a result, they will increasingly turn to cloud unit economics to create more profitable pricing and packaging – including using dynamic pricing to change prices based on current market demands. To do this effectively, organizations must understand how efficient their cloud cost spending is and how much revenue is spent on cloud costs.
6. FinOps adoption will face an uphill battle
FinOps talks a big game, but have FinOps practices really shifted left, or are they still centralized at most companies? While integrating FinOps early in the process sounds great, many organizations still need help to make this shift. Even FinOps practitioners admit to not having widespread buy-in yet, suggesting that it’s more of an aspiration than a reality for many.
7. GreenOps will grab a greater foothold
Statistics show that the public cloud has a larger carbon footprint than the airline industry, and a single public data center uses as much electricity as 50,000 homes. Amid new regulations, particularly in Europe, coupled with consumer pressure, we predict more interest in the concept of GreenOps. Put simply, GreenOps is the practice of minimizing a cloud environment’s carbon footprint by efficiently using cloud resources. This can only be done with visibility into an organization’s true cloud spend and a deeper understanding of how resources are allocated. Optimizing cloud use to reduce waste will be a key part of this puzzle, leading organizations and individuals to take a closer look at their data usage.
Winning in the cloud
The cloud has become a business necessity, and every cloud engineering decision is a buying decision. Companies will gain a competitive edge next year as they develop better strategies to monitor and manage cloud costs, minimize their energy use, and refine their understanding of FinOps.
##
ABOUT THE AUTHOR
Bill Buckley is a seasoned technology executive with a rich background in software engineering and product management. With a career spanning prominent companies such as EMC, Unidesk, Citrix, and now CloudZero, Bill brings a wealth of experience and expertise to his role as senior vice president of engineering.
