The Flexera 2025 State of the Cloud Report has shed light on the evolving landscape of cloud computing, revealing significant shifts in cloud adoption, sustainability, and artificial intelligence (AI) usage. The report, which surveyed 759 cloud decision-makers and users globally, provides a comprehensive snapshot of the cloud industry, highlighting both opportunities and challenges.

One of the key findings of the report is the growing trend of repatriation, with 21% of workloads and data being moved back from cloud to data centers. While this may seem counterintuitive, experts suggest that this shift is largely driven by the need to refactor applications for cloud, highlighting the importance of cloud-native strategies. Despite this trend, net-new cloud workloads continue to grow, indicating that cloud adoption remains on an upward trajectory.

Sustainability has emerged as a top priority for cloud users, with 57% of respondents either having or planning to have a defined sustainability initiative in place within the next 12 months. This focus on sustainability is likely driven by the growing awareness of the environmental impact of cloud computing, and the need for organizations to reduce their carbon footprint. European respondents, in particular, are leading the charge, with 43% already tracking their cloud carbon footprint.

Generative AI has become mainstream, with 72% of organizations already using it either sparingly or extensively. The report also highlights the surge in adoption of AI-related public cloud services, with almost half of respondents using artificial intelligence/machine learning (AI/ML) platform-as-a-service (PaaS) services. This trend is likely to continue, with AI becoming an increasingly critical component of cloud strategies.

Cloud spend and security remain top challenges for organizations, with 84% of respondents citing managing cloud spend as their top cloud challenge. Security, always a top concern, follows closely, with 77% of respondents identifying it as a major challenge. The report highlights the need for organizations to adopt robust cost optimization strategies and security tools to mitigate these risks.

Public cloud adoption continues to accelerate, with a third of respondents spending more than $12 million a year. Enterprises, in particular, are driving this growth, with 40% spending more than $12 million a year. While SaaS expenses remain consistent, the report notes that organizations remain cautious about moving sensitive data to the cloud, highlighting the need for robust security measures.

Centralized initiatives are gaining traction, with 69% of respondents having a cloud center of excellence (CCOE) or central cloud team. FinOps teams, in particular, are becoming increasingly important, with 59% of respondents using them for cloud cost optimization strategies. This shift towards centralized governance is likely driven by the need for organizations to optimize cloud spend and reduce waste.

The report also highlights the ongoing competition between top cloud providers, with Amazon Web Services (AWS) and Microsoft Azure leading the pack. While there has been little change among the leaders, the report notes that organizations are increasingly embracing hybrid cloud strategies, with 70% of respondents using at least one public and one private cloud.

Looking ahead, the report suggests that growing cloud usage, initiatives to optimize costs, competition between top cloud providers, and the ongoing use of AI will be hallmarks of cloud programs in 2025. The new emphases on repatriation and sustainability will modulate how cloud initiatives are managed, and organizations will need to adapt to these changing trends to remain competitive.