August 19th, 2025, posted in learning
by Adelina
When companies decide to move to the cloud, it usually starts with excitement. Presentations provide unlimited scalability, quicker delivery, and the capacity to surpass the constraints of outdated infrastructure. It appears to be the future on paper.
However, after a few months, the cracks appear. Bills rise higher than anyone could have predicted. Despite being ignored, servers continue build up charges while operating silently in the background. What should have been a bold step forward begins to feel like patching holes in a ship that is leaking.
The problem isn’t the cloud itself, but the approach. It's like embarking on a road trip without a map or a budget when you jump in without a clear plan. Although you might make it somewhere, it's unlikely to be where you intended to go.
It takes more than simply shifting workloads to achieve true cloud success. It's about making sure the transfer is effective, affordable, and in line with the overall business plan. Before a single workload shifts, the proper approach asks difficult questions, such as which systems should remain, which should migrate, and how expenses will be managed once everything scales.
Organizations too often adopt the "lift and shift" strategy, transferring outdated systems into shiny new settings without rethinking how they should be optimized or governed. The result: underutilized machines, surprise charges, and missed opportunities to actually modernize.
Cloud migration must therefore be more than just a technological effort. It's about governance, financial restraint, and positioning for long-term value rather than just immediate gains.
Why cloud migrations lead to overspending
Cloud platforms are designed to be flexible and powerful, but that flexibility comes at a price, literally. Without guardrails, it’s easy for costs to spiral. A common issue is over-provisioning, where businesses allocate more compute power or storage than they actually need, just to be “safe.”
For example, a mid-sized financial services company migrated its transaction processing systems to the cloud using the same architecture as its on-premise environment. It failed to take advantage of right-sizing or cloud-native services and ended up paying 40% more than expected within the first six months. Much of the cost came from idle virtual machines and unnecessary high-performance storage tiers that weren’t being fully utilized.
Another hidden cost driver is data transfer. A retail company moved its global e-commerce stack to the cloud, anticipating cost savings and improved performance. But they didn’t account for inter-region data egress fees. As customers accessed content from around the world, those small charges ballooned into tens of thousands of dollars monthly.
These stories are common. Without visibility into resource consumption and cost structures — and without active governance — companies find themselves chasing problems after the fact instead of designing for efficiency from the beginning.
Common pitfalls include:
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Lack of planning: Lifting and shifting workloads without optimization leads to resources being wasted on inefficient architectures.
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Poor cost visibility: Without real-time monitoring, small overspends accumulate into massive budget overruns.
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Over-provisioning: Allocating more compute, storage, or network bandwidth than necessary is common when businesses simply replicate on-premises setups.
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Vendor lock-in: Organizations tied to proprietary services may face escalating costs with limited flexibility.
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Neglecting governance: Uncontrolled access and fragmented deployments can balloon cloud spending before teams even realize it.
Consider a retail company that moved its entire e-commerce stack to the cloud, expecting to cut costs. Instead, their IT spend grew by 35% in the first year due to unexpected data egress fees and underused virtual machines. These issues could have been mitigated with proper analysis and planning.
Key steps for an effective cloud migration strategy
1. Define clear business objectives
Before you migrate any system, be crystal clear about what you’re trying to achieve. Are you aiming to reduce IT costs? Enable faster software delivery? Support a remote workforce? Improve customer experience?
Having clear business drivers not only sets priorities but also helps evaluate ROI. For instance, a logistics company’s main goal was to support real-time shipment tracking. By focusing their cloud adoption strategy on improving latency and integrating IoT data streams, they tied technical outcomes directly to business value, even though the migration didn’t reduce overall infrastructure costs. Their return came in the form of faster delivery insights, better customer satisfaction, and fewer missed shipments.
2. Perform a full assessment of current systems
Understanding what you already have is a critical, and often underestimated, step. A thorough inventory of applications, data, dependencies, and compliance requirements will help you avoid rework and legal issues later.
Take a healthcare provider that initially planned to move all patient records to the public cloud. During assessment, they realized that doing so would breach national data residency laws. Instead, they adopted a hybrid cloud approach, keeping sensitive data on private servers while using the public cloud for analytics and non-sensitive services.
Beyond compliance, these assessments often uncover technical debt, underused applications, or legacy systems that aren’t worth migrating. Identifying them early prevents wasted effort.
3. Choose the right cloud model
The choice between public, private, hybrid, and multi-cloud setups isn’t just technical, it shapes your cost structure, flexibility, and risk exposure.
Public cloud platforms like AWS and Google Cloud offer fast deployment and scalability but can become costly for high-throughput applications. Private clouds offer more control and security but demand higher initial investment. Hybrid approaches blend the two, supporting data locality and regulatory needs.
For example, a SaaS company began with AWS for rapid launch but later incorporated Azure for backend processing to avoid dependency on a single provider. This multi-cloud setup not only gave them more bargaining power but also let them optimize workloads for different pricing models.
4. Build a detailed cost estimate
Too many companies rely on ballpark figures or vendor promises. Instead, build a detailed cost projection using cloud pricing calculators and workload simulations.
Include every element: compute resources, storage types (hot vs. cold), licensing fees, backup solutions, networking costs (especially data transfer between regions), and even monitoring and DevOps tool integrations.
A fintech firm learned this the hard way. They migrated core applications and discovered post-launch that outbound data transfer alone cost them $50,000 monthly, a figure that had not been included in their initial budget. A better estimate would have prevented that surprise.
5. Prioritize quick wins
You don’t need to migrate everything at once. Start with smaller, well-contained applications that can deliver value quickly and teach your teams the ropes.
A media company, for example, chose to migrate its internal content marketing system first. It was non-critical, easy to containerize, and provided high visibility across departments. When the migration succeeded, it became a proof point for more complex efforts and helped build trust in cloud initiatives.
6. Right-size resources from day one
One of the biggest advantages of cloud computing is the ability to scale dynamically. But many businesses over-provision from day one and stick with default instance sizes.
Instead, start with modest resources and scale based on real-world metrics. Use auto-scaling for services with fluctuating demand. Choose storage tiers that reflect how frequently data is accessed.
An EdTech company initially reserved high-performance virtual machines expecting spikes during online exams. After switching to auto-scaling groups and analyzing usage patterns, they reduced costs by 30% while maintaining performance under load.
7. Implement cloud cost management tools
Visibility is everything. Tools like AWS Cost Explorer, Azure Cost Management, or third-party platforms such as CloudHealth and Spot.io give you insights into where your money is going.
Tag your resources for better traceability. Set budgets, alerts, and cost policies. Review reports weekly, not just quarterly.
One global consulting firm used cost analysis tools to discover a large number of unused development instances running after hours and over weekends. By shutting them down automatically, they saved over $200,000 annually.
8. Foster a FinOps culture
FinOps — the practice of bringing financial accountability into cloud operations — is essential for sustainable growth. It means involving finance, engineering, and product teams in budgeting, forecasting, and spending decisions.
A SaaS provider we worked with embedded cost estimation into their feature design process. Every product idea had to include a projected cloud cost. This led to smarter architecture choices, more efficient code, and fewer budget overruns.
Creating a culture where teams think about cost as part of performance helps prevent surprises and promotes strategic investment in cloud resources.
9. Monitor, optimize, and iterate
Cloud success isn’t a one-time event. Your needs will shift. Cloud providers will introduce new services. Pricing models will change.
Establish monthly reviews of cloud usage and spending. Adjust your commitments, like reserved instances or spot pricing, based on what you actually use. Move archival data to cheaper storage tiers. Eliminate services that no longer deliver value.
A manufacturing company implemented quarterly audits and discovered that thousands of old customer files were stored in high-performance tiers unnecessarily. By archiving them, they reduced storage costs by 15% year-over-year.
Cloud optimization isn’t a one-time task, it’s a continuous competitive weapon.
It offers transformative benefits, but only if approached with planning, clarity, and discipline. The real advantage lies not in simply being in the cloud, but in using it strategically, aligning workloads with business goals, staying in control of costs, and continuously refining how you operate.
A well-executed migration isn’t about moving everything fast, it’s about moving the right things, in the right way, at the right time. That’s how the cloud becomes a growth driver instead of a cost burden.
If you’re planning a move to the cloud and want a strategy that’s efficient, cost-smart, and built for the long run, contact us—we’ll help you get there.
