CIOs Overspend on Cloud but Still See It as Cost-Effective: Azul

Java platform provider Azul reveals that 83% of global Chief Information Officers (CIO) are spending more on cloud services than originally projected, with nearly half reporting overages exceeding 26%. Despite these rising costs, most CIOs continue to view cloud infrastructure as a cost-effective solution compared to on-premise alternatives.

“There is no single way to have an optimized cloud spend,” writes Scott Sellers, CEO, Azul. “It takes everything, including really good observability and monitoring, so that you know exactly which application is consuming what resource.”

According to Azul’s CIO Cloud Trends Survey & Report, increase in cloud spending has primarily been driven by accelerated demand for AI workloads and a lack of awareness among developers regarding the costs of the services they use. As AI initiatives expand and development teams increasingly rely on modular, cloud-native services, the overall consumption of cloud resources has outpaced original financial forecasts.

Azul’s survey data shows that only 2% of CIOs have reported spending less than anticipated on cloud services. This trend suggests widespread challenges in cloud cost governance across enterprises. Despite these financial overruns, eight out of 10 CIOs still believe the cloud ultimately delivers savings, underscoring a persistent belief in the scalability and efficiency of cloud platforms.

As cloud services become more accessible and capable, consumption increases disproportionately — ultimately driving costs higher despite improvements in unit efficiency. Sellers says that many organizations believe the cost of reverting to on-premise infrastructure would exceed current cloud spending, reinforcing their continued commitment to cloud strategies.

The cloud’s operational flexibility also supports faster product and service rollouts. As Business Wired reports, in traditional environments, scaling required hardware procurement cycles spanning several months. Sellers cites past workflows that involved extensive lead times, such as ordering servers from hardware vendors, awaiting delivery, and configuring infrastructure post-arrival. In contrast, modern cloud environments enable rapid deployment of additional computing resources.

This situation reflects a broader industry pattern where CIOs — despite being over budget — continue to invest in the cloud. Instead of retreating from cloud architectures, organizations are employing a mix of cost containment strategies. Azul’s research identifies several key approaches: optimizing workloads, utilizing cost management tools, negotiating service discounts, auditing deployments, and adopting FinOps practices.

FinOps integrates financial accountability into cloud decision-making, allowing engineering, finance, and business teams to collaborate on cloud usage and spending. According to Sellers, no single method ensures cost control; a comprehensive strategy is required. This includes advanced observability to track resource consumption down to the microservice level, enabling informed decisions about the allocation of cloud infrastructure.

Resource type selection is another lever for managing costs. Sellers recommends evaluating service performance requirements. For example, mission-critical applications may need ultra-low latency storage, whereas less time-sensitive workloads could rely on cold storage with higher latency but lower cost.

Developer behavior has also emerged as a significant variable in cloud cost overruns. The Azul survey highlights the ease with which developers can access and implement high-cost cloud services, often without understanding the financial implications. Many large-scale providers offer an extensive array of services, some of which are costly to operate. The lack of cost transparency in the development process frequently leads to unintentional overspending.

Uninformed resource provisioning can quickly scale into excessive operational expenditures, says Nick Durkin, Field CTO, Harness. “If you are not giving your smartest engineers access to the information about services that they can optimize on, how would you expect them to do it?” 

Industries with high mobile application usage, such as financial services, are particularly exposed, Business Wired. To fight this problem, CIOs must ensure cost-awareness among development teams, especially considering that every deployment incurs incremental cloud costs.