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Reining in the Cloud: Strategies to Manage Rising Cloud Costs

Publisher IDC
Published Jan 29, 2026
Length 9 Pages
SKU # IDC20818919

Description

Public cloud adoption has become nearly universal, yet many enterprises are confronting a difficult reality: While cloud enables agility and speed, it does not always deliver the cost efficiencies the business expects. CIOs and CFOs alike are grappling with cloud bills that continue to rise, sometimes unpredictably, creating tension between the promise of cloud and its financial performance. The paradox of cloud economics is that both statements, "the cloud saves money" and "the cloud is too expensive," can be true. Properly designed cloud-native workloads use elasticity to match resources to demand, avoiding idle capacity and wasted spend. However, lift-and-shift migrations that simply replicate static on-premises environments often operate continuously at higher unit costs, eroding the expected savings. The issue is not whether cloud is cheaper, but whether organizations are using cloud resources effectively and governing them strategically. Key drivers of cost escalation include overprovisioned compute, unmanaged storage growth, data egress and intercloud transfer fees, and the stickiness of proprietary services such as databases, analytics, and AI platforms. Without mature governance and FinOps practices, the ease of provisioning resources leads to sprawl, idle instances, orphaned storage, and opaque cost structures that accumulate quickly."The cloud is not inherently cheaper or more expensive — it is only as cost efficient as the governance, modernization choices, and forecasting discipline CIOs put in place. Enterprises that embed FinOps, manage hybrid and multicloud environments as portfolios, and treat cost optimization as continuous will transform cloud economics into a source of strategic value," says Gerald Johnston, adjunct research advisor with IDC's IT Executive Programs (IEP).

Table of Contents

9 Pages

Executive Snapshot

Situation Overview

Business expectations and misaligned assumptions

Why cloud is sometimes cheaper and sometimes more expensive

Key cost drivers: compute, storage, multicloud, and provider stickiness

The hybrid resurgence

The governance imperative

Advice for the Technology Buyer

Strategic advice

Establish a FinOps practice across IT and finance

Reset business expectations

Integrate cloud modernization into the cost strategy

Elevate service delivery through cost forecasting and modeling

Institutionalize cost experience as intellectual capital

Manage multicloud as a portfolio

Revisit hybrid as a strategic option

Tactical advice

Learn More

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