A portion of enterprise cloud spending is wasted due to poor leadership and operational inefficiencies
Cloud computing has unlocked massive potential, but it’s also exposing a major flaw in how many companies operate. According to VMware’s global survey of 1,800 senior IT decision-makers, nearly half believe over 25% of their cloud spend is wasted. A third say it’s worse, waste exceeds 50%. That’s not a rounding error. That’s your innovation budget burning away in the background.
This waste isn’t caused by poor technology. It’s leadership not doing the basics. There’s too much focus on launching big projects, not enough focus on keeping operations efficient. Many teams work in the cloud without real accountability for what they spend. That leaves a disconnect between usage and ownership, and a lot of unused resources left to run up bills.
The truth is, discipline isn’t exciting. But it’s necessary. As leaders, we need to see cloud environments not just as platforms for innovation but as assets that need precision control. When we’re not paying close attention to usage patterns, capacity planning, or cost reporting, we’re setting ourselves up for financial drag, and making it harder to invest where it really matters.
It’s simple, really. Leadership has to drive cost visibility and enforce clear rules on resource use. If the people spinning up cloud instances don’t know the cost impact, the problem isn’t the technology. It’s leadership.
Organizational silos impede effective cloud cost management by limiting visibility and control
Silos are killing cloud efficiency. VMware’s data shows organizational silos are one of the biggest obstacles to managing cloud cost. When engineering, finance, and operations don’t talk to each other, nobody gets the full picture. That’s an architecture problem, not in your systems, but in your organization.
Control without visibility isn’t real. When teams work in isolation, they make cloud decisions for their piece of the business. But cloud costs span across departments, billing cycles, and contracts. If you manage them from inside silos, waste is inevitable. Leaders have to break down those barriers or accept continuous inefficiency as the cost of inertia.
Let’s be honest, most silos are cultural. People stay in their lanes because that’s what’s expected. But cloud economics don’t respect lanes. To stop the bleed, executives need to insist on integrated workflows. Engineering needs to talk to finance. Procurement needs to talk to infrastructure. Everyone needs to operate from the same source of truth on cloud use.
This isn’t just about saving money. It’s about building better systems, systems that scale, adapt, and pay for themselves. If leadership doesn’t push for synchronized cloud operation, waste will continue and accountability will stay a moving target. Break the silos. Set the standard. Then scale.
A pervasive lack of financial discipline at all organizational levels contributes to unnecessary and escalating cloud costs
Most cloud waste doesn’t come from massive failures. It comes from small, consistent inefficiencies no one is accountable for. Engineers spin up extra virtual machines. Developers leave testing environments running overnight or over weekends. Extra storage sits idle, but still costs money. And it keeps happening, because no one’s asking the right questions about why, how, and at what financial cost.
Leadership tends to focus on innovation headlines instead of operational consistency. That’s a strategic liability. If you’re not building financial awareness into your engineering decisions, you’re setting the stage for long-term inefficiency. The responsibility doesn’t sit only with IT. It starts with leadership creating processes that link technical actions to financial outcomes.
It’s not about micromanagement. It’s about clarity. Every team that uses cloud services should understand that their choices, every deployed container, every reserved instance, have a price tag. Ignoring that connection weakens the enterprise. You can’t scale strong infrastructure on ambiguous decisions.
VMware reported a real case where a business cut its cloud bill by double digits. How? They simply automated the shutdown of development environments after hours. No new tech. Just basic operational discipline. That’s the level of awareness leadership needs to systematize, clear procedures that eliminate lazy spending, without slowing down progress.
The underutilization and improper implementation of finops severely hamper efforts to optimize cloud spending
Finops, short for « financial operations », isn’t new. And most companies already have it in play, at least on paper. But the performance gap is clear: owning a tool isn’t the same as using it effectively. Too often, finops platforms are operating in a vacuum. Limited access to data, limited reach across environments, and no structural support to act on what the tools reveal.
If a finops platform points out cost inefficiencies, and no changes follow, that’s not a tech problem. That’s cultural inertia. Leadership may buy the system but won’t build the processes to enforce accountability. It’s easier to report insights than to require action. That’s why spending keeps creeping up even when monitoring tools are in place.
Real adoption of finops means full access to all cloud environments, production, development, shadow IT, and third-party SaaS. It also means cultural alignment, where decisions around cloud use are data-informed, cross-functional, and reviewed regularly. Anything less is wasted potential and a missed opportunity to reduce financial bleed.
VMware’s report highlights this failure across industries. Businesses spend on analytics but stop short of structural change. Instead of integrating finops into their operational DNA, they treat it as a one-off project. Executives need to stop thinking of cost management as a reporting function. It’s a strategy. And strategies need execution.
Rigid and opaque cloud vendor contracts further restrict effective cost management
Cloud vendors offer scale, availability, and access to advanced infrastructure, but their pricing models are still designed for vendor advantage, not buyer clarity. VMware’s findings reflect what’s already evident to many CIOs: long-term cloud contracts often include bundled services you don’t use and capacity that remains idle but still burns budget. The billing structures are complex by design and rarely align with real usage patterns inside the enterprise.
Companies often commit to multiyear deals with providers like AWS, Microsoft, and Google without the internal processes to optimize those investments. It’s not enough to get discounts at scale if you end up locked into inflexible terms that prevent cost correction down the line. The lack of contract scrutiny leads to overspending on features no one needs, licenses that remain untouched, and server capacity that doesn’t map to actual demand.
These agreements need pressure testing, often. If your team isn’t reviewing contract performance against actual operational metrics on a regular basis, you’re not in control. Cloud vendors don’t manage your spend, you do. Leaders who treat vendor relationships as a fixed commitment instead of a living negotiation will keep losing on operating margins.
Enterprise buyers should treat cloud billing models with skepticism. Ask hard questions. Get line-item visibility. Push back on default terms. Then build ongoing oversight into procurement governance. Without this level of scrutiny, the true cost of your cloud is always higher than it looks on paper.
Achieving sustainable cost reduction requires a cultural shift
Cutting waste isn’t a tooling issue. It’s not a vendor issue. It’s a leadership issue. Sustainable reduction in cloud costs will only happen when executives make cost governance a core part of the company culture. Right now, in too many organizations, cloud decisions are decentralized and budget accountability is vague. That’s a structural weakness.
Leadership has to set the expectation: every resource used in the cloud has a business reason and a financial impact. This mindset must extend across development, infrastructure, and finance. Engineering teams need clear cost visibility. Procurement needs better contract oversight. Finops should have input into operational workflows. Without integration, cost control can’t stick.
You also need consistency. One-time audits don’t fix a culture. To control cloud spend long-term, companies should fully embed finops, include multi-stakeholder reviews of cloud usage data, and treat cost alerts and optimization insights as action items, not just reports.
VMware’s research makes it clear, there’s enough insight, tooling, and awareness already in the enterprise to make significant gains. The gap is execution. If leadership owns that and operationalizes it, cost savings will follow, and the freed-up capital can be re-invested into growth, not waste.
Key takeaways for decision-makers
- Leadership drives cloud efficiency: Leaders must enforce operational discipline and cost accountability across teams to reduce cloud waste, which exceeds 25% in nearly half of enterprises according to VMware.
- Break down silos to improve control: Organizational silos prevent full visibility into cloud use and spending, executives should create cross-functional processes that unite finance, engineering, and operations under shared cost goals.
- Embed financial awareness into engineering: Leaders should ensure all technical teams understand the real-time financial impact of their deployments to curb routine overspending on idle resources and overprovisioned services.
- Operationalize finops across environments: Buying a finops tool isn’t enough, leaders need to give those tools complete access and create a culture where cost insights drive tangible changes in usage, budget, and governance.
- Scrutinize vendor contracts continuously: Enterprise cloud deals often include underused or idle services; decision-makers should regularly review terms, demand transparency, and negotiate flexibility to prevent long-term cost traps.
- Build a culture of operational accountability: Sustainable savings will come from leadership commitment to embedding cost clarity and control into every layer of cloud operations, from contracts to team behavior.
