Gilad David Maayan, CEO and Founder of Agile SEO. We work with brands like IBM, Intel and Imperva on enterprise SEO and content projects.
Picture this: Your SaaS company is booming. New users are signing up daily. Then, the dreaded cloud bill arrives—doubled in just six months. Your finance team scratches their heads over invoices from Amazon Web Services (AWS) that might as well be hieroglyphics, while engineers happily push out more features, oblivious that they’re funding a cloud provider’s next corporate retreat.
I find that cloud costs are increasingly emerging as a quiet threat to enterprise profitability. Without clear accountability, expenses can spiral out of control faster than office donuts disappear on Friday mornings. So, where’s all that money going? And how can you avoid getting blindsided by it?
Cloud Waste: A Growing Problem
Nearly a third of companies’ cloud spend is pure waste. This problem is growing at 35% year-over-year, with some organizations seeing costs surge by an eye-watering 500%.
It’s no wonder 42% of CIOs consider cloud waste their number one challenge. A staggering 70% of companies lack visibility into their cloud spending, with only 30% knowing where their budget actually goes—like handing someone your credit card and saying, “Surprise me!”
The causes are varied: forgotten test servers humming away without anyone noticing, over-provisioned systems and backup requirements seemingly designed by someone with severe trust issues. Maintaining unused cloud instances is about as practical as that treadmill-turned-coat-rack silently judging you from the corner of your bedroom.
Let’s look at three problems you may not be aware of, which can be a serious threat to your company’s IT budget.
1. Unoptimized Resources
Developers often request more resources than needed, wanting to ensure optimal performance during peak periods. But they forget to scale down afterward or accidentally leave test environments running 24/7 because there’s no automated system to shut them off on weekends. The solution? Automation and accountability:
• Implement automatic shutdowns during off-hours.
• Tag resources for easy identification of temporary instances.
• Generate clear reports showing cost savings over time.
To illustrate the potential savings, I was involved in a project carried out by a cloud backup and disaster recovery vendor, where one company saved $100,000 annually just by stopping large elastic compute cloud (EC2) instances at nights and weekends. They also eliminated unnecessary snapshots and properly tagged resources to identify what could be terminated.
Cloud cost management is complex. Other sources go more deeply into how to optimize cloud resources when it comes to cost management on AWS and Azure.
2. Hidden Storage Fees
Storage costs represent nearly half of all cloud billing expenses, yet I find that many teams don’t understand the cost structure. Cloud providers have pricing models that can seem more complex than quantum physics, with unpredictable costs and tiering systems based on virtual machine (VM) size.
The fine print often reveals you’re paying for full backups rather than just incremental changes. These complexities make forecasting nearly impossible, with management discovering too late that storage costs have blown past budgets.
To avoid surprises, it’s crucial for teams to understand how their data is stored and managed. Here are some key questions they should be asking:
• Do they know how their tool is storing full or incremental backups for the long term? Full or incremental?
• Are they utilizing efficient cold storage tiers for long-term data? If so, are they optimizing their storage tiers? Do they know how long it would take to recover their systems?
Excessive Capacity For Cyber Protection
As cyber threats escalate, I also find that organizations tend to overspend on protection. Security teams create multiple copies of large production systems hoping this ensures continuity.
If downtime occurs, cloud providers charge substantial data access fees without guaranteeing quick recovery. Teams need to understand they can maintain optimal recovery points with frequent backups without breaking the bank. Native cloud providers often charge for full backups when incremental backups would often suffice.
Breaking Free From Cloud Budget Chains
Relying on a single cloud vendor can lead to lock-in, restricted flexibility and higher costs. Because of this, companies worldwide are shifting their cloud strategies. While deeply reliant on AWS, Azure or Google Cloud, I’m seeing increasing multi-cloud implementations and even returns to hybrid approaches.
Ask yourself these two questions:
• Is your IT team looking into the logistics of having a multi-cloud environment?
• Have they explored tools that allow them to seamlessly replicate and store data to an off-site, affordable storage repository and recover quickly from another cloud?
Your cloud bill doesn’t have to be a horror story. With proper visibility, automation and strategic planning, it can become just another predictable business expense—leaving the surprises for your product launches, not your financial statements.
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