The Importance of Cost Governance to Manage Cloud Overspending

Cost Governance for Cloud Overspending

In the year 2020, the pandemic situation has created several remote working jobs and resulted in increased cloud adoption.

Cloud Adoption bar has not just increased in IT or Financial industries but also in other industries including Healthcare, Manufacturing or Retail, Real Estate, etc. As per the survey of Research and Markets, the Cloud computing market will grow to $832.1 billion by the year 2025 globally. According to the Gartner forecast, global cloud adoption will grow to 18.4% by the end of 2021 with a market value of $304.9 billion, which was around $257.5 billion in the year 2020.

Most of the cloud vendors provide a setting option to control cloud spending which should be set at the time of buying cloud services. In some cases, companies lack in automating such settings, and that mistake results in crossing the required cloud spend limit which is also known as “cloud overspending”. If it is not taken care of, then there might be chances that they end up paying huge amounts of bills.

In this blog, we are going to cover the best practices to avoid cloud overspending.

5 Best Practices to Avoid Cloud Overspending:
Choosing the Right Cloud Vendor:

According to Gartner’s Forecast, around 70% of organizations are overspending cloud services because they are not using strategic cloud planning. Their laziness or lack of knowledge puts them in the situation of not choosing the right cloud vendor. It is obvious to have confusion while selecting the right cloud vendor, but using strategic planning helps organizations to know their requirements and also in cloud financial management.

Policy Set Up to Manage Cloud Usage:

Organizations that are not planning and following strategies of cloud usage may end up with cloud overspend. To avoid cloud overspending, organizations must follow three measures, which are:

  • Financial planning at all organizational level
  • Cloud managers must have the reports of utilized resources to manage cloud spending
  • Quota policy resources to prevent unusual usage spikes
Control Overprovisioned Resources:

According to the Flexera report on RightScale 2019, around 40% of cloud instances come in large size and results in cloud wastage. Most newly cloud adopting organizations believe that cloud services are affordable for any size of the company and help them to scale according to their workflows with ease. It is true that the cloud is affordable for anyone but only if it is strategically planned and aligned with the business flow.

Discarding irrelevant Resources:

To avoid cloud overspending, it is important to do cloud usage assessments regularly. This practice helps to identify the required and non-required services. So, once an organization finds any irrelevant services or those services which are no longer required, they can easily eliminate them and protect the cloud from overspending.

Check the Service Spends Regularly:

Just like regular service usage assessment helps to avoid irrelevant spend on unnecessary services or resources. Similarly, it helps to know how fast and effectively we are utilizing cloud services to assess resources and manage cloud spending. So, it can also be said as the smart way to avoid cloud overspending is to learn from previous assessment behaviours.


Apart from following all such mentioned best practices, it is also important to find the right partner who can guide you at every step. Choosing the right cloud vendor not only eases cloud resource implementation but also in the management of its instances, which makes cloud financial management a better option. CloudStakes Technology Pvt. Ltd. is the right partner to manage all cloud activities with dedicated planning and services by expert cloud engineers.

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