Your cloud bill just arrived, and the numbers are higher than expected. Last month it was $47,000. This month? $63,000. Your IT team mentions "increased usage," but you suspect you're paying for resources you don't actually need.
You're probably right. According to researchers like Gartner, McKinsey, and Flexera, the average enterprise wastes 28-32% of all cloud spend on underutilized resources. For a mid-sized company spending $5,000,000 annually on cloud services, that translates to roughly $1,000,000-1,750,000 in unnecessary costs.
The good news? You don't need a computer science degree to fix this problem. It would definitely help, and we can refer you to the cloud engineer who saved a client millions of dollars if it comes to that. If nothing else, though, you can understand the problem (and solution) within the next six minutes.
This is a guide to controlling your cloud spending with strategies that make sense to business leaders, not just engineers.
Cloud cost optimization isn’t so different than managing office space. You wouldn't pay rent for empty floors or keep lights on in unused conference rooms. Unfortunately, that's exactly what most companies do with their cloud resources.
Cloud spending grew by 21.5% from 2024 to 2025 (per Pelanor). Did your revenue match that pace? If not, your cloud costs are eating into profits at a higher rate.
If you don’t have good FinOps tools, this problem is out of sight, out of mind. It's easy to spin up new services with a few clicks. It's harder to remember to turn them off. This isn't a technical problem. It requires business context and leadership accountability that your IT team shouldn’t have to provide on its own.
A good cloud engineer can go deep when it comes to cloud cost optimization (imagine a mechanic doing a 152-point vehicle inspection). You don’t have to. You’ll probably start cutting cloud costs if you look into these three things.
These cloud services are running (and charging you money) without doing anything useful. That server your team created for a Q3 marketing campaign? It might still be running in December, costing you $200-500 per month for nothing.
According to Flexera’s State of the Cloud Report, 66% of organizations report wasted spend due to idle or underused resources. 54% of tech leaders blame the waste on poor cloud cost visibility (per Anodot). You might as well keep sending paychecks to people after they quit.
Over-provisioning is like buying everyone a second laptop "just in case." In cloud terms, this might mean running enterprise-grade servers for applications that could run on basic instances, or buying 24/7 capacity for systems used only during business hours.
Development teams often take a "better safe than sorry" approach. They choose servers with 16 CPU cores and 64GB of memory when the application only uses 2 cores and 8GB. If they don’t go back and rightsize, you’ll waste several thousand dollars per server in the next year.
Many companies replicate their traditional data center approach in the cloud (“lift and shift”). Then they keep servers running 24/7 because that's how physical servers work. That’s unnecessary with cloud services offering consumption-based billing.
Database licensing, network architecture, and region selection can also impact costs without providing meaningful business value if you don’t make intentional choices. We’re venturing dangerously close to technical cloud cost optimization territory, though. Let’s move into what you can do to reduce cloud costs instead.
You don’t have to be the one logging into AWS to start turning things around at your organization.
Everyone knows cloud resources cost real money, but keeping it top of mind goes a long way toward effective cloud cost optimization. Share monthly cloud costs with the people who can do something about it. Break down spending by department, project, and application. It’s easier for teams to be cost-conscious when they see how their decisions impact the budget.
Connect cloud resources to business purposes. Every server, database, and storage system can be tagged with information about the project, department, or customer it supports. This helps identify resources that no longer serve a business purpose.
Set up spending alerts at multiple levels, for example:
Schedule regular cloud cost review meetings with both technical and business stakeholders to identify trends and opportunities.
Great. You’ve created a culture of care (about cloud costs). What are you going to do about it?
Start by identifying your most expensive cloud resources. Ask your team to pull usage statistics for compute instances and databases over the past month. Highlight all servers consistently using less than 50% of their CPU or memory capacity.
Filter by non-production environments. Dev, testing, and staging environments rarely need the same capacity as production systems. You might be able to reduce them by considerably more than half without affecting developer productivity.
Cloud providers offer significant discounts if you commit to using resources for one or more years. For example, AWS Reserved Instances and Savings Plans can provide discounts up to 72% off on-demand pricing, (per AWS documentation).
A three-year commitment naturally gets you a bigger discount. The best cloud engineer I know (Ryan “Cloud King” Jensen) normally tells clients not to jump into that right away, though. Starting with one-year commitments gives you flexibility as technology evolves.
Only commit to resources you know you’ll need long-term. Your main production servers and core databases are good candidates. Experimental projects and variable-usage systems are not.
Some of the best software consultancies (Sketch, naturally) provide free cloud cost reviews. It only makes sense to do this for free because we’re pretty sure we’ll find ways to cut cloud costs. We do the work for free to earn your business. Win-win.
Artificial intelligence is increasingly helpful for cloud cost optimization. AI-enabled tools can predict spending patterns, identify opportunities, and automate cost-saving actions. Many now offer automated rightsizing, anomaly detection, and commitment management without requiring deep technical expertise.
As of January 2026, our favorite AI cloud cost optimization platform can instantly knock 10+% off your cloud spend. These tools are evolving rapidly, though, so you’re welcome to get in touch for our latest recommendation.
There are certainly ways to set and forget your cloud cost optimization. One of them is to lean on Sketch's cloud management services. Our team can work on constantly finding the latest ways to reduce costs so yours doesn’t have to. There’s a reason we’re the only AWS Partner in our state with the CloudFormation designation (and it’s not because of the marketing department).
Other than that, cloud cost control requires leadership involvement, clear accountability, and ongoing attention. That means creating a cloud cost optimization program and sticking to it. Like with most things, you can start small to get big results (shoutout to the Pareto principle).
The basics will take you far:
Don’t be afraid to lean on technical experts. They’re better than we simple business folk are at identifying the line where aggressive cost controls can hinder innovation or compromise reliability. The middle path (minimizing waste without robbing business value) will lead you toward a cloud infrastructure that can deliver better outcomes for every dollar spent.