Overspending Worries as Gen AI Drives Cloud Investments

As AI and cloud technologies remain hugely important for businesses worldwide, there has been a race to see which initiative would prevail first. However, it appears as though both are now being prioritised in tandem with each other to drive competitive enterprise transformations.

Gen AI has become the main driving force of cloud investment over the last six months, despite many organisations struggling to manage rising costs. A recent report by Wipro suggests that, as businesses are striving to find real value in AI, there is a risk of overspending for IT leaders.

The Pulse of Cloud report, presented by Wipro FullStride Cloud, highlights the shifting dynamics of cloud and AI adoption across multiple industries. It reveals the true impact of AI, citing that 54% of surveyed organisations state AI is the main driver of cloud investments. 

Shifting towards the cloud

Cloud computing has revolutionised business operations such as data storage and processing, whilst enabling a high level of scalability and flexibility. Similarly, AI continues to unlock unparalleled opportunities for businesses seeking to boost their automation, insights and decision-making capabilities. 

Research has recently shown that organisations are eager to prioritise cloud over AI to digitally transform in a more robust, and therefore more strategic, way. As a result, they will be able to leverage AI more successfully in their future investments.

As organisations prepare for a future driven by AI, they are increasing their cloud investments both in hybrid (54%) and public (56%) cloud. Wipro suggests this is as a result of the continued growth of technologies like generative AI (Gen AI), with surveyed organisations citing the growing importance of AI technologies in shaping business strategy.

Wipro also finds that hybrid cloud is dominant, with 60% of organisations saying they have used it. This ultimately reflects a need for greater flexible solutions that balance on-premises and public cloud services.

With continued AI transformation, there is a real enterprise need for robust cloud infrastructure to support digital advancements, as Jo Debecker, Managing Partner and Global Head of Wipro FullStride Cloud, explains. 

“As enterprises rethink their infrastructure to reap the benefits of AI, they are also seeing increased value in adopting a cloud economics approach.,” he says. “Our survey shows that as data migration and the adoption of AI-related applications increasingly drive cloud investment, unified cost management strategies are also growing in importance.”

Coordinating a cloud and AI-based approach

While the majority of respondents (55%) tell Wipro their cloud adoption is currently outstripping AI adoption, more than one third (35%) say they are advancing in tandem with both technologies. 

The report also reveals a growing focus on cloud cost management, with 54% of organisations leveraging utilisation analysis and automation tools for cost management. In addition, 59% now use a unified cloud management strategy.  

However, 43% of organisations in the UK specifically admit within the report they do not have a coordinated or centralised approach to manage cloud costs. This is a much higher figure than European counterparts (24% for Germany and 25% for France). 

“Our survey findings further confirm that cloud continues to be the primary transformational platform for the enterprise, empowering organisations to innovate and stay competitive,” Jo adds. 

“The importance of an effective cloud strategy is only amplified with the increasing focus on AI. The cloud’s scalability and processing power are critical in holding and managing the huge volumes of reference data required by AI. As such, cloud investment decisions are increasingly being driven by the need to support AI.” 

Wipro is an example of a company currently committed to powering ahead in its AI and cloud advancements. The organisation’s recent partnership expansion with Google Cloud aims to accelerate its adoption of Google Cloud’s advanced AI technologies such as its Gemini large language models.

This integration forms part of Wipro's ai360 initiative and aims to develop best practices, tools and frameworks that combine Wipro’s AI ecosystem with Google Cloud’s Gen AI offerings.

“Through this expanded relationship with Google Cloud, we are able to significantly accelerate our clients’ digital transformation journeys and empower them to maximise their cloud-run businesses,” Jo comments.

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