Cloud cost management has surged in importance as companies tighten budgets and prioritize resource sustainability.

Why specifically, though?

Well, cloud services are inherently flexible and businesses scale resources up or down more quickly with cloud services. Although this might seem really convenient for some, do keep in mind that this flexibility can lead to uncontrolled spending if not managed effectively. Tightening budgets necessitate a closer look at cloud expenses to identify areas for optimization and avoid unnecessary costs.

Cloud environments can easily accumulate idle or underutilized resources. These "ghost instances" continue to accrue charges despite not contributing value. Cloud cost management helps identify and eliminate such waste.

Optimizing cloud usage through cost management not only saves money but also reduces the environmental impact of cloud computing. Energy consumption associated with unused resources is minimized, which contributes to a more sustainable approach.

Circling back to the main point, cloud cost management has seen a surge because it allows companies to achieve financial and environmental benefits. This trend is evident in the growth of the FinOps Foundation, a nonprofit focused on cloud financial management best practices. Notably, 48 of the Fortune 50 companies are part of the FinOps Foundation.

To gain a clearer understanding of current cloud cost management practices, Boomi commissioned Forrester (News - Alert) Consulting. The study aimed to assess companies' effectiveness in controlling their cloud adoption and ongoing management expenses. It also explored how these businesses plan to evolve their strategies for the future.

The study found that nearly three-fourths of global companies exceeded their set cloud budgets in the last fiscal year. With public cloud spend expected to reach more than $1 billion in the U.S. by 2026, it’s down to the businesses to develop better cloud cost management and optimization, or CCMO, strategies.

Additionally, the study found that while a majority of leaders prioritize CCMO tactics earlier in the cloud development process, proactive strategies at the architectural level remain lacking for most companies. In fact, only 6% of decision-makers report their cloud cost remediation strategies are fully proactive, and just 40% say they effectively contain costs at the solution architecture stage.

Despite recognizing the potential for cost optimization at the architectural level, less than half of companies have a strategy in place to address persistent issues, such as excessive storage, lack of integration strategy and overconsumption of bandwidth.

And, when asked how difficult it is to track areas of cloud spend with the CCMO tooling currently in place, leaders often mentioned that data management was the most difficult undertaking. This is followed by egress charges, such as fees for moving data in and out of the cloud, with time and resources needed to build and maintain app integrations as the third most difficult area to track.

“More than half believe their CCMO recommendations are only as good as the data their company can provide. Yet 40% are struggling to fix the root problem of their wasteful cloud spend,” said Ed Macosky, Chief Product and Technology Officer at Boomi. “The problem is integration is being viewed as a separate entity, when it actually has significant potential to act as a control layer in the reckoning of cloud costs.”

Disconnected systems and siloed data, he argues, limit companies' visibility into their overall cloud spending, hindering effective tracking and decision-making.

When systems are integrated and data flows freely, companies gain a clear picture of their cloud spending. This visibility allows them to track costs effectively, identify optimization opportunities and make data-driven decisions to maximize the value of their cloud investments.

The full report is available here.