Which cloud provider is winning in 2026?
What the data really tells us

Source: Flexera 2026 State of the Cloud Report (N=753). Figures represent combined usage across significant workloads, some workloads, experimentation and planned adoption.

Hybrid cloud complexity: the problem nobody planned for

Seventy-three percent of organisations are now operating hybrid cloud environments. That number has increased three percentage points year-on-year, and what strikes me every time I see it is the reason why it’s happening.

It isn’t always strategy. The Flexera report is candid about this: many organisations end up with hybrid and multi-cloud environments through mergers and acquisitions, legacy infrastructure decisions, or siloed application choices — not because someone sat down and designed it that way. One business runs AWS. They acquire a division built on GCP. Overnight they’re multi-cloud. An on-premises private cloud isn’t retired when new public cloud services are onboarded. The complexity compounds.

What concerns me most is that this unplanned complexity is directly correlated with wasted spend. After five consecutive years of decline, wasted cloud spend on IaaS and PaaS has ticked back up to 29% this year. The report links this explicitly to AI-driven cost complexity and new service proliferation. When you are running multiple clouds without unified visibility and governance, waste is almost inevitable.

This is exactly the conversation I’m having with clients right now. The question isn’t ‘which cloud do we use?’ — it’s ‘do we actually have the governance and cost management capability to run what we’ve already committed to?’

GenAI is reshaping the cloud provider decision

Perhaps the most significant finding in this year’s report is the GenAI adoption data. In 2024, 14% of organisations said they were not using GenAI services through public cloud at all. In 2026, that figure is zero. Every single organisation surveyed is now using GenAI in some capacity, and 45% say they use it extensively — up from 36% the previous year.

This matters enormously for cloud provider strategy, and I don’t think enough organisations are thinking through the implications. GenAI workloads don’t sit neutrally across providers. Azure’s deep integration with OpenAI pulls Microsoft-centric organisations in one direction. AWS Bedrock and SageMaker pull in another. Google Cloud’s Gemini and Vertex AI are aggressively positioning for AI-native workloads. The provider you choose for your AI infrastructure today may determine where your data, your models, and your operational dependencies sit for the next five years.

The cost picture is also far from settled. The top challenge in managing AI workload costs is unpredictable and bursty usage patterns — cited by 27% of respondents. Unoptimised GPU and CPU utilisation follows at 23%. These are not problems that resolve themselves. They require active FinOps capability applied specifically to AI spend, and most organisations are still building that muscle.

Governance is no longer optional

One trend I find genuinely encouraging in this year’s data is the continued growth of formal cloud governance structures. CCOE adoption has risen to 71% globally, and FinOps team prevalence is now at 63% — up from 51% just two years ago. In Europe, FinOps adoption has jumped nine percentage points in a single year to 65%.

But I want to be direct about what this data also shows: even with 63% of organisations running FinOps teams, 29% of cloud spend is still being wasted. Governance structures are necessary but not sufficient. The organisations that are genuinely extracting value from cloud in 2026 are the ones shifting their measurement frameworks away from cost-cutting metrics and toward business outcomes. The Flexera data shows a 12 percentage point increase year-on-year in ‘value delivered to business units’ as a cloud success metric. That shift in mindset is the real differentiator.

My conclusion: The provider decision is secondary to the governance decision

After reviewing this year’s Flexera data in detail, my view is this: the public cloud provider wars are, in many respects, a distraction from the more important conversation.

AWS and Azure are separated by fractions of a percentage point on almost every metric that matters. Google Cloud is building a credible AI position. Most organisations are already multi-cloud whether they intended to be or not. The question of ‘which provider should we use’ is increasingly less important than ‘how do we govern, optimise and extract genuine business value from the cloud estate we already have’.

With 29% of IaaS and PaaS spend wasted, GenAI costs increasingly unpredictable, and hybrid complexity growing year-on-year, the organisations I see succeeding are not the ones who picked the right hyperscaler. They are the ones who invested in centralised governance, built FinOps capability with genuine teeth, and shifted their cloud metrics from cost avoidance to business value.

That’s the conversation I’d encourage any IT or commercial leader to be having in 2026. And it’s the conversation I’m always happy to have with you.

If you’d like to discuss cloud governance, hybrid cloud strategy, or how Northdoor can help your organisation take control of its cloud estate, get in touch with the team at Northdoor.

Data sourced from the Flexera 2026 State of the Cloud Report, based on a survey of 753 technical professionals and executive leaders conducted in winter 2025. Published under Creative Commons Attribution 4.0 International Licence.