Change is a constant in cloud computing and in 2025, that change is accelerating. From emerging technologies to shifting economic pressures, strategic priorities are being recalibrated at a rapid pace. As CIOs navigate these dynamics, they must keep up with trends and understand the evolving cloud landscape.
The Flexera 2025 State of the Cloud Report explores these driving factors, leveraging insight from over 750 global cloud decision-makers. For fourteen years and counting, the report highlights the anticipated trends for the year ahead – and in turn, helps leaders shape and pivot their IT strategy. This year, the data unveils a shift toward repatriation, along with an increasing organizational focus on sustainability initiatives and cloud cost management.
Cloud Repatriation Slowly Unfolds, Even as Spending Grows
After more than twenty years of trial-and-error, the cloud has arrived at its steady state. Many organizations have seemingly settled on the cloud mix best suited to their business needs, embracing a hybrid strategy that utilizes at least one public and one private cloud.
This new cloud status quo comes as public cloud spend continues to accelerate. According to Flexera’s report, 33% of organizations are set to spend over $12 million annually just on public cloud, marking a 29% increase from last year. For larger enterprises, that figure jumps up to 40%.
While some cloud decision makers are upping their cloud spend, others are instead turning their focus toward cloud repatriation: the process of moving key workloads from the cloud back to on-premises data centers. The report found this shift is unfolding slowly, with 21% of cloud workloads having been repatriated so far, which is vastly outweighed by net-new cloud projects.
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Sustainability Initiatives Gain Momentum
Sustainability is quickly moving from aspiration to expectation for businesses. Over half (57%) of organizations either already have or plan to have a robust sustainability program within the next 12 months, including carbon footprint tracking of cloud use.
Cost savings still takes the top spot for a majority of organizations, but notably, 31% now report equal prioritization between cost optimization and sustainability. The increased attention on sustainability comes as the internal and external regulatory pressures mount for technology firms to meet environmental requirements. There is also the reputational cost at play – scrutiny over sustainability efforts is on the rise from customers and employees alike.
Cost Management and Efficiency Remain the Gold Standard
For the ninth year in a row, optimizing existing use of the cloud and cost savings earned the top spot among IT teams’ priorities. The more workloads moved to the cloud, the greater the associated cost and the subsequent need to optimize those costs.
An impressive 87% of respondents cite “cost efficiency/savings” as their top metric for validating team success against cloud goals, further validating this narrative. This year’s report also showed a stark rise in measuring “cost avoidance,” which can be achieved with proper license management, having increased from 28% to 64%.
As organizations maintain a laser focus on cost management, FinOps has emerged as a viable solution for combating cost management challenges. A comprehensive FinOps infrastructure is a game-changer when it comes to an organization’s ability to wrangle overspending and maximize business value. Additionally, FinOps helps businesses activate on timely, data-driven insights, improving forecasting and encouraging cross-functional financial accountability.
This year’s report found that the bulk of organizations (86%) currently have a dedicated FinOps team responsible for some or all of their cloud cost optimization tasks or are planning to implement one within the next 12 months. FinOps is only expected to mature in the years ahead, evolving from an unproven framework to a cultural practice and crucial financial management discipline.
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What’s Next in Cloud Computing?
IT strategy for the remainder of 2025 will hinge on the complex balancing act between managing cloud usage and its associated costs, while accelerating digital transformation to adopt emerging technologies like AI and stay competitive in a fast-moving market. The movement toward repatriation and increasing focus on sustainability will also play an important role in determining how technology leaders approach the future of the cloud.
