Cloud has become deeply embedded in how modern organizations operate. While the benefits are clear, the economics are becoming harder to navigate.
As businesses scale usage, questions are mounting about whether rising spend is still delivering proportional value. Gartner’s May 2025 trends report predicts that by 2028, one in four organizations will report dissatisfaction with their cloud outcomes.
This discontent reflects a growing distance between infrastructure and accountability, and the growing need for cloud governance to mature, before inefficiencies become embedded.
Director of Solutions Architecture & Advisory (Cloud/FinOps) at Flexera.
Designing for visibility, not just reporting
In many organizations, cost is still treated as a reporting outcome rather than something to shape. Spend is reviewed after deployment, leaving optimization efforts limited to what can be adjusted post-implementation.
Flexera’s 2025 State of the Cloud Report shows that a significant majority of organizations lack detailed visibility into their cloud costs, with only 43% tracking cloud costs at a unit level. This limited visibility hinders most teams’ ability to attribute costs to specific products, services or functions.
Our global data also shows that 34% of enterprises are spending more than $1 million monthly on SaaS. As SaaS adoption grows, so does the importance of managing software licensing costs, which can substantially impact cloud expenditures. Consequently, organizations must look for ways to optimize software license costs as they mature their cloud governance practices.
Visibility needs to move earlier in the decision chain, shaping how environments are constructed rather than rationalizing them after the fact. A shift left approach brings cost considerations – like infrastructure and software licensing costs – earlier into the product lifecycle, so that organizations can make more informed decisions about their cloud usage. By attributing these costs to specific products or services, organizations can gain a clearer understanding of their overall cloud spend.
By embedding cost insight into the architecture stage, organizations are able to steer usage intentionally. They can optimize cloud spend and build cloud environments that reflect business priorities as well as contribute to more sustainable cloud practices, minimizing their environmental footprint.
Bringing cost ownership to where decisions are made
Access to data does not guarantee accountability. Many organizations have detailed cost reporting but continue to struggle with cloud waste.
The issue here shifts from one of visibility towards one of proximity. Our data shows 59% of organizations have a FinOps team that does some or all cloud cost optimization tasks, yet in many cases, these teams still sit at the edge of delivery. So, while they can surface issues, they are often too removed from daily operations to intervene effectively.
The most effective models integrate cost ownership into delivery itself. This means that engineering leads, platform teams and product owners have oversight to take action before inefficiencies take hold.
As a result, when these roles are supported with relevant reporting and shared financial metrics, cost awareness becomes a natural part of the decision-making process. This makes it easier to adjust workloads, retire underutilized services, and optimize environments in-flight, rather than in hindsight.
Organizations with mature FinOps practices are better positioned to manage their cloud costs and reduce waste year over year. This improvement reflects a delivery culture where cost is treated as a design consideration.
Using attribution to prioritize what matters
Many organizations can report how much is being spent and on which services. Far fewer can explain how that spend supports outcomes the business cares about.
87% of organizations view cost efficiency as the primary measure of cloud success, up from 65% last year. This signals a shift in mindset that cloud is no longer assumed to be efficient by default, it must justify its footprint in context.
When cloud spend is tied to individual products, services or customer experiences, the conversation becomes more focused. Governing costs like software licensing ensures that licensing agreements are optimized and aligned with business needs.
Attribution helps shift cloud conversations away from usage and toward value. Taking a holistic approach to cost management not only helps in reducing waste but also contributes to more sustainable cloud practices, ultimately delivering both financial and environmental value.
Early discipline pays off at scale
Control is easiest to build before complexity sets in. The longer organizations delay embedding structure into cloud governance, the harder it becomes to retrofit later. Inconsistent tagging, ambiguous ownership and manual reporting all take time to correct once they are entrenched.
As 33% of global organizations now spend more than 12 million dollars annually on public cloud, this highlights how new services, accounts and tools can be introduced faster than the governance processes required to manage them.
It’s important to note that scaling effectively doesn’t mean avoiding complexity, but there is a need to manage it consistently.
Also, governance does not have to stand in the way of innovation. It can enable it, by improving confidence in decision making, and reducing the uncertainty that often undermines momentum.
Cloud is a system of interdependent decisions, each with its own financial implications. The ability to explain, anticipate and adjust these decisions draws the line between cloud as a delivery of value, or cloud as a cost center. As FinOps matures, designing for cost from the beginning and shifting cost conversations left is key to building cloud environments that scale with control.
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