Paris: As industries accelerate digital transformation, organizations are rapidly embracing On-Demand Tech solutions such as public cloud, Software-as-a-Service (SaaS), and Generative AI (Gen AI) to drive innovation and agility.
However, a new report from the Capgemini Research Institute, titled “The On-Demand Tech Paradox: Balancing Speed and Spend”, reveals that escalating costs, complexity, and governance gaps are threatening expected returns.
On-Demand Tech Adoption Surges, But Costs Spiral
Nearly eight in ten organizations recognize On-Demand Tech as critical for growth. Public cloud, SaaS, and Gen AI are seen as key enablers of scalability, performance, and competitiveness. Yet, the same proportion of enterprises report difficulty managing costs effectively.
The report highlights that 76% of organizations exceeded public cloud budgets by an average of 10%. Similarly, 68% overspent on Gen AI and 52% on SaaS. Underutilized resources, lack of cost visibility, and decentralized procurement practices were identified as major drivers of budget overruns.
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Financial and Operational Challenges in On-Demand Tech
The study outlines key barriers organizations face in leveraging On-Demand Tech:
- Soaring costs and complexity: 82% of executives report significant increases in cloud, SaaS, and Gen AI costs.
- Budget overruns: Public cloud (76%), Gen AI (68%), and SaaS (52%) exceeded planned spending.
- Shadow IT risks: 59% of Gen AI and 48% of SaaS spending is driven by business units outside IT governance, creating inefficiencies and vulnerabilities.
- Limited ROI: Only 29% achieved expected SaaS cost savings, 33% realized desired cloud service quality, and 38% gained faster innovation through Gen AI.
FinOps: A Key Lever to Optimize On-Demand Tech Value
While 60% of organizations use cloud cost management tools, only 37% act on insights. The report finds that 76% have or plan to establish FinOps teams, but most remain limited in scope. Only 2% of organizations have a holistic FinOps function spanning cloud, SaaS, and Gen AI.
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Sustainability also emerges as a concern, with 53% acknowledging that inefficient On-Demand Tech usage increases energy consumption and emissions. Yet, just 36% have integrated sustainability strategies into FinOps practices.
Karine Brunet, CEO of Cloud Infrastructure Services at Capgemini and Group Executive Committee member, emphasized: “On-Demand technology spend is expected to double in the next three to four years. To maximize value, organizations must align cloud strategies with business goals while leveraging scalable, modular, and frugal cloud-native architectures supported by FinOps and AI-driven automation.”
Global Study Scope
The Capgemini Research Institute survey covered 1,000 executives from organizations with revenues above $1 billion, spanning 12 sectors and 14 countries across North America, Europe, and Asia-Pacific. Conducted in May 2025, the study included in-depth interviews with 10 global executives to validate findings.
