Why cloud costs get out of control: Too much lift and shift, and pricing that is ‘screwy and broken’

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by | September 8, 2020

Feature Spinning up services on public clouds is dead easy, but what about staying in control of the bill?

Organisations are “over budget for cloud spend by an average of 23 per cent, and expect cloud spend to increase by 47 per cent next year,” according to a “State of the cloud 2020” report by Flexera, based on a survey of 750 technical professionals.

As if that weren’t bad enough, respondents self-estimate that 30 per cent of cloud spend is wasted. COVID-19 has, if anything, made the problem worse, with most respondents saying the pandemic has increased planned cloud usage.

Adrian Bradley is a CIO Advisory director at KPMG advising customers on cloud cost management. “Our clients find three things going wrong,” he told The Register. “The first is that it costs them more than they anticipated to get to the cloud. Second, when they get to the cloud they find that they’re spending more than they expected, and quite often more than they historically spent. Third, they don’t feel they’re getting the value from that spend.”

The biggest problem, said Bradley, is that organisations “make a lot of compromises” moving to the cloud because the level of digital transformation needed to get the full benefit is not there.

In other words, too much lift and shift. “Enterprises have not made that choice because they’re lazy, but because that is what was affordable,” said Bradley. “The key thing is, if you do have to lift and shift, don’t stop there. It’s a new variant on the technical debt story.”

The reason this is more expensive is that more applications end up running on virtual machines rather than taking advantage of pay-as-you-go services. “They don’t get the economies that are inherent in the utility of cloud,” said Bradley.


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