What Is Cloud Waste?

This year, $17.6 billion in cloud spending will be completely wasted due to idle and overprovisioned resources.

Fremont, CA: Over 90 percent of organizations will use public cloud services this year. In fact, public cloud customers will spend more than $50 billion on Infrastructure as a Service (IaaS) from providers such as AWS, Azure and Google. This boom is, of course, due to the broader adoption of public cloud services. But, it is also caused by the expansion of infrastructure within existing accounts. Not surprisingly, the growth in spending often exceeds the growth in business. That's because a huge portion of what companies are spending on cloud is wasted.

Overprovisioned Resources: Overprovisioned infrastructure is another source of wasted cloud spend—paying for larger capacity resources than required. That means one is paying for resource capacity that one rarely uses. Approximately 40 percent of instances are at least one size larger than required for their workloads. Simply shrinking an instance by one size reduces the cost by half. Downsizing by two sizes saves one 75 percent.

This year, $17.6 billion in cloud spending will be completely wasted due to idle and overprovisioned resources. In fact, it's possible that it's even higher. Orphaned volumes, inefficient containerization, underutilized databases, unused reserved instances, instances running on legacy resource types, and other sources of waste Some of these result in significant one-time savings (for instance, deleting unattached volumes and old snapshots), while others can provide regular monthly savings.

This amounts to a minimum of $5 million per day, every day this year, that could be reallocated to other areas of the business.

It is time to stop wasting money on the cloud. Recognizing the scope of the problem may be a good first step.

Idle Resources: Idle resources are VMs and instances that are paid for by the hour, minute, or second but are not in use 24 hours a day, seven days a week. These are typically non-production resources used for development, staging, testing, and QA. According to data collected from our users, non-production resources account for approximately 44 percent of their compute spend. Most non-production resources are only used during a 40-hour workweek and do not need to be running 24 hours a day, seven days a week. That means that the resources are idle for the remaining 128 hours of the week (76 percent) but are still paid for.