It’s often easy to realize that you are overspending for your cloud infrastructure, but optimizing the cost is definitely not easy. You might have some ideas for cloud cost optimization, but some factors may stop you from getting results. Without the right information, you cannot defeat these challenges and enjoy the opportunities of cloud cost optimization. 

Hence, in this article, GlobalDots will explore the common challenges that affect cloud cost optimization and help you understand what you must do to prevent overspending on the cloud. Let’s get right to it! 

Challenges of Cloud Cost Optimization

Wasted cloud spends undoubtedly a major issue that needs fixing in any organization. According to respondents of a State of the Cloud survey conducted by Flexera in 2021, organizations wasted 32 percent of cloud spend. 

Most organizations want to avoid this trend, but they often encounter some roadblocks without knowing the sources. Therefore, this section will detail the challenges associated with cloud cost optimization to help you learn ways to reduce cloud costs.

1.  Lack of visibility into cloud spend 

The most notorious challenge of cloud cost optimization is the lack of visibility into cloud spend. That’s not surprising since you cannot effectively manage what you cannot measure. In this case, lack of visibility leads to uncontrolled consumption or cloud sprawl—the uncontrolled growth of cloud services and cloud instances.

With no visibility into your cloud spend, you won’t be able to accurately view billing or cloud spending data over time. Basically, you’ll be flying blind when spending on the cloud and exposed to overspending. This kind of environment leaves no room for cloud cost optimization. 

However, you can create room for visibility by investing in a cost optimization tool with a good dashboard that monitors and manages your cloud costs and resources.

2. Lack of accurate budget forecasts

Another common challenge that affects cloud cost optimization is inaccurate budget forecasts. Your organization is at risk of overspending on your cloud infrastructure if you cannot get your budget right. The straightforward fix would be to enhance the forecast of your cloud expenditure, but it’s not that simple, especially when you have many cloud resources.

You may think that you’ve got your budget forecast all figured out, but some tasks might quickly escalate your cloud costs. Therefore, we don’t recommend relying on rough estimates. However, you can estimate the resources you’ll use in the future with a test environment. 

Preferably, use a cloud cost management tool that utilizes historical data and trends to analyze the state of your cloud resources. Such a tool can deliver accurate budget forecasts to help you optimize your cloud costs.

3. Complex billing

Cloud bills are supposed to be straightforward, but they are often complex. Most of the time, the bills are incomprehensible due to the technical specifications that may prove too much for your finance team to understand. Using multiple cloud service providers makes the situation even more difficult to navigate. 

Generally, cloud providers have different billing practices. So, the more cloud providers you utilize, the more complicated your road to cloud cost optimization will be. It’s worth mentioning that most cloud providers often change their billing practices, meaning that you can work to understand one practice and face a different one the next month. 

So, it’s best for the organization that you do not leave cloud bills to only the finance team; all departments should understand their invoices. That increases the chances of understanding complex billing practices. Alternatively, opt for a cloud cost optimization tool. Such tools can help identify the bills that raise costs, ultimately helping to eliminate waste and optimize costs efficiently. 

4. Lack of alignment

In any organization, misalignment of approach is always counterproductive. Results often come only come from working together. Many organizations struggle to get results from their cloud cost optimization efforts because they are one-sided. Hence, we recommend bringing all departments within your organization into the conversation about cost optimization. 

If the decision to optimize cloud costs falls on you, develop a common approach toward cutting costs and ensure that all departments are aligned with the mission.

5. Over-provisioning

Provisioning involves the allocation of cloud resources. Ideally, you should get only the resources your workloads require, but that’s not always the case. There is over-provisioning when you get more resources than you need. Such a situation leaves you with idle cloud resources you pay for anyway. 

Therefore, on your road to cloud cost optimization, you should only choose the resources that your workloads require. Investing in cost management solutions, custom monitoring, and rightsizing can help you do that and reduce cloud spend.

Opportunities for Cloud Cost Optimization

Besides the obvious benefit of saving costs, cloud cost optimization has some opportunities that can benefit your system. Here are the top opportunities for cloud cost optimization:

1. Visibility

Cloud cost optimization boosts visibility around your business and ensures cloud expenses are made according to your needs.

2. Efficiency

Cloud cost optimization drives efficiency by getting rid of under-provisioning and over-provisioning. Under-provisioning typically results in low performance, but proper cost optimization ensures that it is never a problem for your business. Likewise, cloud cost optimization eliminates over-provisioning, ensuring that clusters are not flooded with idle cloud resources that may reduce performance.

3. Innovation

Cloud cost optimization efforts also drive innovation by equipping the teams within your organizations with skills that enable effective decisions. These efforts ultimately help you utilize cloud resources optimally. 


A McKinsey report reveals that around 80% of businesses consider the management of their cloud spending a challenge, but it doesn’t have to be a problem. It will be less of a challenge to you when you know the right steps for cloud cost optimization.

The solutions are very practical and can aid your cloud cost optimization significantly. GlobalDots helping a client to reduce their cloud bill by $1.5 million annually is all the evidence you need to know that these cloud cost optimization practices work.