Flexera 2026 State of the Cloud Report: The convergence of cloud and value
Flexera 2026 State of the Cloud Report: The convergence of cloud and value
The latest iteration of Flexera's annual report shows FinOps maturing as AI adoption accelerates cost, risk and governance demands.
Published on 19th March 2026
Flexera’s 2026 State of the Cloud Report marks a pivotal moment in cloud maturity. Now in its fifteenth year, the report shows cloud entering the value era—where organisations tie cloud decisions to measurable business outcomes, accelerate GenAI adoption and lean on centralised governance to manage rising complexity.
Those looking to get a handle on cloud spend and cloud governance must pay attention to these trends and to the goals that can help drive the most value possible, or risk getting left behind in reactive states.
Cloud success is increasingly measured by value, not just savings
For the first time, organisations are measuring cloud success less by cost efficiency and more by the value technology delivers. Sixty‑four percent of organisations now rely on value delivered to business units as their top metric for cloud progress, up twelve percentage points from last year. Cost efficiency dropped six points, reflecting a broader shift toward prioritising impact over savings.
- Value delivered to business units rose 12 percentage points year over year
- Use of unit economics increased from 40% to 49%
- Cost efficiency dropped 6 percentage points
Nearly half of organisations (49%) now leverage unit economics to measure cost per service and link cloud consumption to business outcomes, up from 40% last year. This shift reflects a more proactive and mature approach, as FinOps teams move from simply explaining past spend to shaping architectural and investment decisions early in the process. Cloud is increasingly recognised not just as infrastructure, but as a strategic driver of growth, innovation and competitive advantage.
FinOps has expanded from a cloud cost discipline into a strategic capability focused on technology value. Teams aren’t just looking at what cloud costs add up to, but they’re also looking at what cloud delivers, and they’re shaping decisions long before workloads hit the cloud.
AI is everywhere, and making cloud waste worse
Despite the increase in FinOps maturity placing focus on value, this year’s report shows cloud-based AI workloads are surging causing an increase in wasted cloud spend (29%) for the first time in five years. AI is permeating every area of tech, but Generative AI (GenAI) specifically has moved rapidly from experimentation to everyday use. In 2026, GenAI surged to the third most widely used public cloud service, rising to 58% from 50%. AI is now one of the most widely adopted public cloud services, reshaping both cloud economics and risk profiles.
- Security and compliance risks
- Data quality concerns
- Difficulty forecasting unpredictable usage patterns
Security and compliance are now the top concern for cloud-based AI initiatives, followed closely by data quality and the difficulty of forecasting unpredictable usage patterns. AI workloads behave differently than traditional cloud services, making visibility, governance and financial controls harder—but more essential—than ever.
AI is no longer experimental. As organisations integrate GenAI into everyday workflows, strong governance ensures they can innovate with confidence while keeping cost, risk and performance in balance.
Organisations are responding by formalising oversight. A significant majority of large enterprises now have a dedicated AI leader or governance team, signalling that AI is no longer a side project; it’s a core business capability that demands discipline and accountability.
Hybrid cloud and centralised governance remain essential
Seventy-three percent of respondents are using hybrid cloud, an increase from last year. Multi‑cloud adoption also continues to rise, but often unintentionally. This trend could stem from mergers, siloed application teams or inherited architectures rather than deliberate strategy.
Organisations with higher monthly cloud spend are more likely to run hybrid estates, suggesting greater sophistication and a stronger need for workload placement flexibility. SMBs and enterprises alike continue using hybrid environments to balance cost, performance and governance.
Cloud spend continues to climb—along with waste
Cloud spending is trending upward, with large enterprises leading the way: 76% of large enterprises now spend more than $5 million monthly on public cloud. The increase in monthly spend paired with reversal in wasted spend underscore why centralised governance and FinOps discipline are becoming essential, not optional.
Centralisation and governance gain momentum
As cloud environments grow more complex, organisations are doubling down on centralised oversight. Seventy‑one percent have a cloud center of excellence (CCOE) or equivalent, and 63% rely on a FinOps team. Business units and software asset management teams are also becoming more involved, reflecting a broader organisational commitment to governance and accountability.
MSPs continue to play a role, but their focus is shifting. Nearly half plan to expand into AI consulting or SaaS management, while enterprises increasingly rely on them for specialised support. SMB use of MSPs dipped this year, potentially due to budget constraints or improved internal capabilities.
Cloud migration strategies evolve with a shift‑left mindset
Organisations are investing earlier in architectural and cost planning. Cost optimisation after migration dropped from the third- to the fifth-ranked challenge, while selecting the best instance and assessing cloud vs. on‑premises costs increased in importance. This shift‑left approach reflects a growing understanding that planning early prevents expensive inefficiencies later.
Europe sees parallel trends with subtle distinctions
European organisations largely mirror global trends, including increased use of FinOps teams (up nine points) and a strong preference for Azure for significant workloads. Sustainability initiatives saw a modest increase as regulations shift, with 47% of European respondents reporting defined programs.
Cloud success hinges on governance, value and AI oversight
The 2026 findings point to a cloud landscape that is more complex, more strategic and more value-focused than ever. Organisations are maturing their FinOps practices, accelerating AI adoption and strengthening governance structures to manage scale and risk. IT, finance and operations teams are collaborating more closely, building the unified visibility and accountability needed to support innovation while maintaining control.
Looking ahead at 2026 and beyond, organisations that excel at effective oversight and managing complexity will stand out in the pack. They’ll unlock new opportunities for growth and build resilience as they innovate.
Read the full report at: https://info.flexera.com/CM-REPORT-State-of-the-Cloud