Who stops wasteful cloud spending?

According to a report from VMware, nearly half of IT leaders believe more than 25% of their cloud spending is wasted, and almost one-third claim the waste exceeds 50%. These numbers are astonishing, not just for the financial toll but for what they reveal about the broader cultural and operational challenges within enterprise IT. At the heart of this waste are a lack of accountability, poorly defined processes, and an absence of financial visibility.

Most of these issues can be traced to leadership problems. Too many IT leaders focus on innovation and growth but overlook the day-to-day operational discipline required to manage cloud spending effectively. Instead of using finops and other tools, they allow unchecked behaviors, unclear billing, and overprovisioning, risking tighter future budgets and lower ROI.

Areas of concern

The challenges that plague cloud cost management are obvious and avoidable. VMware’s survey of 1,800 senior IT decision-makers worldwide revealed that organizational silos remain a significant barrier to effective cloud management. These silos limit visibility, control, and governance—key factors for understanding and controlling excessive spending. Although organizational silos can stem from culture, it ultimately falls on IT leadership to dismantle them.

Unfortunately, many CIOs and decision-makers tend to favor short-term solutions or focus on headline-grabbing innovation projects instead of tackling mundane yet impactful inefficiencies. This lack of commitment to financial discipline creates a vicious cycle where costs spiral out of control because leadership is unwilling to engage in tedious but essential cost-management tasks.

This lack of discipline trickles down to engineers and developers who often overlook the financial impact of their decisions. For instance, teams might deploy unnecessary virtual machines, reserve extra capacity, or keep test environments running, thinking costs are minor. The VMware report includes an example of a client gaining double-digit savings on their cloud bill by automating the shutdown of development environments after hours.

VMware’s findings match what I see across most industries: Cloud contracts are often poorly managed, idle resources are common, and CIOs rarely hold teams accountable for waste. It’s not surprising that undisciplined leadership at the top often leads to increased waste at lower levels.

Embrace finops to cut costs

A key takeaway from the VMware report is the underutilization of finops, a financial discipline that manages cloud spending by promoting accountability, transparency, and intentionality—essential for cost optimization and informed resource decisions.

Companies frequently purchase finops tools but often fail to grant them proper access to all relevant data and cloud environments. In other cases, IT leaders implement finops tools but lack the internal processes or cultural support to act on the insights the tools offer. This represents both a technical and cultural failure to prioritize comprehensive cost management.

Even when finops tools reveal cost inefficiencies, businesses often face restrictive cloud contracts. Vendors like AWS, Google, and Microsoft typically lock enterprises into multiyear deals that limit flexibility. Also, IT leaders often fail to thoroughly scrutinize these contracts, which can result in unused SaaS modules or underutilized server capacity that incurs costs while remaining idle.

Ways to rein in cloud spending

If the idea that you’re wasting 25% or more of your cloud budget keeps you awake at night, you’re not alone and you’re not powerless. Fixing these problems calls for a cultural shift led by disciplined leadership, along with practical steps to tackle what we can accurately call the “hidden costs” of cloud computing.

First, leadership must embed accountability within engineering and development teams. It’s not enough for the IT department to know the costs. Teams that use the cloud must understand that every VM or container they spin up has a real price tag.

Second, enterprises must fully embrace and properly implement finops. This isn’t just a tool or one-time fix; finops is a strategic discipline that requires consistent effort. IT leaders should ensure that finops platforms have complete access to all cloud environments, including shadow IT purchases, SaaS services, and development accounts. More importantly, leaders must act on the insights.

Finally, leadership must demand clarity and flexibility in their cloud contracts. Some cloud vendors are notorious for overly complex or opaque billing structures or bundling resources that businesses will never use. IT decision-makers should be skeptical of these contracts and challenge them when necessary.

The wasteful spending highlighted in VMware’s report reflects a broader issue: a corporate culture that values speed and innovation over discipline and accountability. It doesn’t have to be this way. Companies possess the tools and knowledge to control their cloud expenses, but leadership needs to be at the forefront of these efforts. By promoting accountability, dedicating themselves to finops, and carefully examining vendor partnerships, companies can cut down on waste and redirect savings toward more strategic projects. The real question is whether IT leaders will adopt the discipline needed to achieve this or keep letting funds slip away in the cloud.