Dive Brief:
- Cloud investment was supposed to deliver efficiency, but 69% of CFOs now believe that between 10% to 30% of such spending may be wasted — an issue drawing board-level scrutiny as demand for AI pushes costs higher, according to a recent report from software firm Azul.
- Nearly nine out of 10 CFOs said their organizations’ cloud spending is rising, while two-thirds reported that oversight of those costs has reached the board level.
- “This makes clear that cloud is no longer viewed solely as an operational expense, but as both a strategic financial risk and a value driver that warrants executive oversight,” Azul said in the report.
Dive Insight:
As companies increase their cloud usage to support digital transformation and AI adoption, CFOs are becoming increasingly concerned with controlling spending, reducing waste and ensuring investments yield favorable outcomes, Azul said.
Amid severe market volatility, two out of five CFOs ranked reduced cloud and infrastructure costs as one of their top financial priorities during the next 12 months, Azul said.
“Cloud optimization has become a strategic lever — one that allows organizations to fund AI innovation, protect margins and bring greater predictability and accountability to cloud investments,” Azul CEO Scott Sellers said in a press release on the survey results.
In a separate study released in January by Cloud Capital, a startup that provides cloud cost management tools, roughly nine out of 10 CFOs said rising cloud costs are weighing on margins.
Limited visibility into consumption, along with the complexity of modern cloud environments, makes it difficult for many organizations to accurately forecast demand and control costs, Azul found.
Faced with more scrutiny of spending on the cloud, CFOs are examining how resources are used — and where inefficiencies may erode profitability.
Meanwhile, finance leaders are also prioritizing cloud optimization as a way to “unlock broader financial and strategic advantages across the business,” Azul said.
“At the top of the list, 45% say their primary financial benefit is increased budget flexibility to fund innovation, including AI and other digital initiatives, making cloud optimization a key enabler of growth rather than merely an efficiency exercise,” the report said.
“Close behind, 42% point to ‘improved margin or profitability,’ demonstrating how directly cloud efficiency is now tied to financial performance.”
