Tuesday, January 31, 2023

6+ Cloud Cost Optimization Challenges You MUST Know in 2023

By Nisha Sharma - August 12, 2022 4 Mins Read

The cost of maintaining the cloud can seem challenging as the budget lines grow in the business account.

Having a cloud does not always mean less spending as it is a complex structure that can lead to a lot of unplanned expenditure on add-on tools for various requirements. Due to this, enterprises are often called upon to work on hard lines to optimize costs for cloud adoption and maintenance.

As resources develop in the business account, the financial cost of maintaining the company’s cloud can appear intense. This can result in cloud sprawl and other instances of excessive cloud spending. McKinsey Digital’s report on Unlocking value: Four lessons in cloud sourcing and consumption revealed that approximately 80% of enterprises face challenges in cloud cost optimization. 

Also Read: Cloud Migration Challenges Faced by Enterprises

Inability to track cloud spending

Cloud sprawl is a constant problem that many enterprises encounter. It occurs when a company is unable to thoroughly track and evaluate its cloud computing resources. It refers to the unchecked proliferation of cloud instances, cloud services, or even cloud providers.

How can business reliably manage their cloud costs without the right tools? Making decisions about costs becomes challenging when there is no accurate measurement of billing data or cloud spending data over time. Direct financial implications result from this inability to track cloud spending.

Making decisions based on reservations

Since reservations and savings options offer significant reductions over on-demand pricing, businesses frequently choose them.

Even while this appears like a great deal for business cloud spending up front, businesses might have to agree to the reductions for a few more years. The plans to lower cloud costs are hampered by this.

Conflicting cloud-savings strategies across teams

Enterprises shouldn’t only concentrate on one aspect of cloud cost optimization. In other words, managing cloud resources and cloud costs shouldn’t be handled differently by each team or department inside the firm.

Although DevOps and engineering teams typically take the lead in developing new services for an organization, they occasionally overlook cloud cost optimization since they depend on that cost flexibility to provide their best work. Not every company has a dedicated team in charge of cloud strategy to supervise operations.

To effectively manage cloud costs, it makes sense for managers of finance, business, and IT to collaborate and have policies that are aligned with budget costs. After all, budget approval is based solely on cloud-based predictions of consumer spending.

Also Read: Ways to Achieve Efficient Multi-Cloud Connectivity


Acquiring more resources than enterprises require, to support the workloads of the organization- better known as over-provisioning, results in wasteful use of cloud resources and unforeseen and sometimes unnecessary costs.

Spending less on cloud services, bespoke monitoring, cost control tools, and rightsizing can help to lessen reliance on over-provisioned resources.

Billing complexity and cloud cost breakdowns

Cloud bills are frequently unintelligible for the finance team, due to their complexity and technical jargon. Utilizing several cloud providers or implementing a hybrid cloud architecture makes it even more complex and presents the additional challenge of reporting cloud expenses. This makes the path to cloud cost optimization much more perplexing and prone to oversight.

Furthermore, the majority of cloud service providers can change their billing procedures at any time. This implies that the company’s cloud invoices can vary significantly from month to month, necessitating the review of a brand-new batch of cloud bills- on a regular basis.

Less Cloud Optimization options

To right-size containers and instances, cloud cost optimization comprises several features inspired by native cloud platforms and other cloud management tools like automation and auto-scaling. Enterprises can reduce cloud expenses significantly in the interim; this process of cloud cost optimization is ongoing.

The cloud cost optimization tools track imbalances over time and warn teams when they occur wherever non-essential spending increases. An easy-to-use dashboard that highlights business cloud cost drivers can also quickly suggest cost-saving action strategies.

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Nisha Sharma

Nisha Sharma is working with OnDot Media as a Tech Journalist. She has done Post graduation in Journalism & Mass Communication. Her prior experience was in B2B as a Content Writer. This is her first stint with a technology publication and she is on the high curve of learning about the IT sector, it's challenges, and the trends that move it forward.

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