Cloud Waste is Costing You More Than You Think

Cloud over-provisioning is a lot like like buying strawberries in bulk.

I know that sounds weird, but hear me out:

I once bought a huge tub of strawberries at Costco. Sure, there were way more strawberries than I could probably eat, but they were such a great deal– just a little more expensive than a small box of berries at the grocery store. The lure of the deal was strong, so I caved.

What happened next? I ate a few berries out of the tub when I got home, promptly put them in the crisper drawer, and completely forgot about them. The next time I opened the drawer it was like a scene out of Avatar — a mysterious new greenish-blue ecosystem, composed of fuzzy, strawberry-shaped blobs.

Bulk strawberries sound like a great deal, but only if you’re going to, you know, actually eat all those strawberries.

We all pay for stuff we don’t end up using. Whether it’s those strawberries slowly creating a new ecosystem in the fridge or your company’s public cloud infrastructure, that waste can seriously add up. The moral of the story? It’s never a good deal if you don’t use what you’re paying for.

Cloud Waste

As cloud computing continues growing in popularity, more and more companies are turning to the cloud for their computing needs. But if you’re spending any money on a cloud service provider, it’s pretty darn likely that some of those funds are being lost on overprovisioned or underutilized cloud infrastructure. (Think: the proverbial untouched, moldy strawberries in the fridge.) It’s human nature to buy more than you need “just in case,” and this applies to cloud infrastructure too.

Cloud waste is an extremely common problem. (When it comes to the challenges of AWS cost optimization, cloud waste is so common that if you run your AWS infrastructure through our optimizer and DON’T have waste, will pay you instead of the other way around.) Cloud waste can easily happen by:

1) Not choosing an appropriate instance size. It’s not always easy to tell what resources your software will require to run under production loads, but going big so you’re “better safe than sorry” can be hugely expensive in the long run.

2) Not fully understanding cloud pricing options. There are literally hundreds of thousands of options across leading cloud providers, and making the right choice can be impossible.

3) Leaving unused resources running. Not all resources need to be running 24×7, but it’s hard to know what to shut down when.

4) Buying reserved instances. Reserved instances are a great deal on paper, but if you’re not careful they can lock you into a long-term contract that reduces your flexibility and doesn’t scale along with your needs.

With the growth of cloud adoption, cloud waste is a very real hazard. For many organizations, the extent of misspent cloud money can be shocking. So, what kind of money are we really talking about?

Cloud Spending

Spending on infrastructure as a service is forecasted to hit $39.5 billion in 2019, according to Gartner. In reality, this is probably an underestimation to the tune of a few billion, given that Amazon Web Services and Microsoft Azure’s revenue were both over $20 billion last year. More organizations are moving to the cloud or starting on the cloud every day. The big three CSPs — AWS, Azure, and Google Cloud — all have roughly the same offerings, but despite the increasing commoditization of the cloud, it’s still surprisingly easy for a cloud bill to balloon from $500 a month to $5000 a month to $25000 a month, even as a small company.

In terms of how those numbers connect to one cause of cloud waste, think of it this way:

Resources that aren’t being used can typically be shut down, which means non-production cloud compute resources can be off roughly 75% of the time (assuming a 40 hour work week). Let’s say you’re paying a CSP $200 a month per instance, and are running that instance 24/7. Now you’re overpaying by $150 per instance per month. Sure, that might not sound like a big deal if you only have one instance running. But if you’re running 20 instances? That’s $3000 a month wasted. All on resources you weren’t even using. Ouch.

Running unused instances is just one example of the many ways that cloud waste can affect your bottom line. According to RightScale’s latest State of the Cloud report, most companies think they’re wasting 27% of their overall cloud spend. RightScale assesses the actual number to be closer to be 35% on underutilization.

Between idle and underutilized cloud compute resources, it’s no surprise that the math works out to a projected $14.1 billion wasted on cloud compute resources in 2019.


The good news (or bad news, if you’re a cloud service provider), is that a lot of this cloud spend can be easily reduced with the right cloud management and cloud optimization tools. At, for example, we’ve found that we can save companies 40 to 80% on their cloud compute bills. (Our cloud optimization engine sifts through your metric utilization data, finding the perfect-priced cloud, the right instance sizes, and the best solution for provisioning around downtime.)

The bottom line is that the cloud is complicated. Understanding the causes, impact, and solutions for cloud waste can help make the decision-making process so much easier. Interested in learning more? Discover how can demystify cloud computing and manage the entire lifecycle of your cloud infrastructure to help you focus on what matters most — your business.


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