Running applications in the cloud incurs costs for every aspect of contemporary infrastructure, including virtual machines (VMs), containers, and serverless platforms. You incur fees for everything from compute resources to third-party integrations.
Data storage fees include object storage, block storage, and backup snapshots for recovery. Then there’s networking, with fees associated with data egress, intra-region traffic, and static IP addresses on load balancers, which can really drive your cloud costs.
How about those logs, metrics, and tracing? Telemetry tools cost money, too. Add in third-party marketplace solutions and software licensing fees, and a company’s cloud bill is no laughing matter.
At the end of each month, your cloud service provider, be that Azure, AWS, GCP, or other players in the field, will hit you with a bill for your total cloud cost. Sometimes the number may come as a surprise. As infrastructure grows more distributed and dynamic, the absence of cloud cost visibility and control can be a major source of operational risk.
This article will analyze cloud cost elements and their impact on business operations, plus offer steps to keep these expenses under control.
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Why it’s critical to monitor cloud cost
The digital era has elevated cloud spend to a whole new level of concern.
When technical teams decide how to allocate their budget for cloud services, these costs can vary significantly—and they do not match the fixed expenses of on-premises data centers.
Cloud computing offers great flexibility, but if your cost management is too lax, the ease of spinning up new resources can lead to significant and unexpected expenses.
Maximizing cloud value requires more than cloud cost savings; it demands a well-architected environment that meets all performance requirements while optimizing for cloud efficiency. This means engineering, FinOps, and security teams must coordinate their efforts and work from a shared source of truth around cost.
Collaboration is essential for leveraging contextual data and making informed decisions to boost both cloud security and cost management.
What drives cloud cost?
The major cloud providers boast multiple services: machine learning, compute power, storage, networking, databases, analytics, security tools, and much more. Each of these services comes with its own pricing structure that users must understand to gain the upper hand in the cloud spend management game.
Let’s dive into these primary cost drivers.
Compute
Compute represents the most significant individual factor impacting your cloud bill.
Virtual machines (AWS EC2 and Azure VMs), container orchestration platforms (Google Kubernetes Engine or Amazon EKS), and serverless functions (AWS Lambda) all have different fee structures—meaning you need to weigh their respective cost-effectiveness against their operational adaptability.
On-demand instances offer the highest flexibility, while reserved instances and savings plans provide significant discounts through long-term agreements. With spot instances, you’ll enjoy the best savings, but you’ll also face possible service interruptions on short notice.
Your choice of compute should be taken seriously. Why? Let’s say you opt for Amazon EKS. AWS initiates premium pricing for standard support of Kubernetes versions nearing the end of their lifecycle to maintain extended support. Standard support for an EKS cluster costs $0.10 per hour, but extended support prices reach $0.60 per hour. That’s a 500% price increase.
Without visibility into these expenses, organizations can face significant price overruns, impacting budget and business goals.
Luckily, Wiz automatically identifies cost optimization opportunities, ties cost opportunities to resource owners, and drives remediation through automated workflows.
Storage
Cloud providers feature various solutions for data storage. For example, Amazon offers object storage (AWS S3) for large unstructured data and block storage (Amazon EBS) for high-performance VM volumes.
The costs for cloud storage are based on data storage volume (per gigabyte), data access frequency via different tiers, and data storage duration according to your retention policies.
Then you have storage costs for snapshots. Snapshots are crucial for backup and recovery, but they can proliferate, snowballing data fees if not properly managed.
Networking
Network expenses often go unnoticed—until they pop up on your monthly bill. Data egress represents the most problematic charge because it represents the expense of moving data outside a cloud provider's network boundaries. Transferring data between different availability zones and regions within a cloud environment also incurs charges to customers.
A poorly designed architecture that sends excessive traffic across regional boundaries can result in a shockingly high networking bill landing in your inbox.
Observability and telemetry
Your applications need data to monitor what’s happening inside them. Observability solutions are indispensable because they let you collect the necessary logs, metrics, and traces for application monitoring and issue resolution. Still, these tools, e.g., Amazon CloudWatch and Datadog, aren’t free.
The amount of spend you’ll need to allocate for log data ingestion, including volume, metric resolution, and trace sampling rates, will depend on the specific cost structure of the observability service you choose.
Other hidden costs
The above categories represent only a portion of your potential cloud waste. The truth is: Many significant expenses stem from sources you never even anticipated.
The following bottom-line busters will remain untraceable until organizations deploy tracking solutions:
Unattached resources: Cloud infrastructure is made up of unused EBS volumes and idle load balancers that continue to incur hourly charges despite being unused.
Licence fees: Commercial operating systems, like Windows Server, and enterprise databases, like SQL Server, don’t come gratis. Businesses must pay licensing fees, and the costs go beyond basic cloud infra expenses.
Zombie workloads: One of the most insidious forms of cloud waste is when apps and services continue to operate in your environment with zero business value. The initial owner departed or the project simply ended, but the workloads keep on running because nobody ever shut them down.
Cloud waste: Broadly speaking, cloud waste includes anything that delivers little or no business value and incurs unnecessary cloud costs: e.g, idle or overprovisioned compute, unattached resources, redundant snapshots, overly long backup retention, inflated data egress from chatty cross‑region/network designs, extended-support fees for old Kubernetes/EKS versions, and forgotten dev/test environments left on 24×7.
How cloud costs are measured and reported
To master cloud spend management, you first need precise data. Your primary source for obtaining this information will be your cloud providers’ billing reports. Tools like AWS Cost and Usage Reports (CUR) or GCP Cloud Billing Reports hand you detailed line items about all your expenses from that provider.
Unfortunately, you'll quickly run into several challenges:
You may have multiple bills across cloud providers and services, making it difficult to get the whole picture of cloud spend.
The massive amount of data can make it hard to uncover the true cost drivers and understand trends.
Reporting delays often occur, with available data possibly several hours or a day old; this lag can prevent timely decision-making and hinder fast reactions to unexpected cost spikes.
Identifying the teams or projects responsible for the incurred costs is another big challenge, as without proper attribution, accountability is murky.
To tackle these issues, companies need a comprehensive governance strategy with three key elements: a tagging policy, account organization, and resource alignment. But manually maintaining this setup is impractical. An automated unified platform is the only solution.
The Wiz platform combines cost metadata with cloud infrastructure context through a unified graph structure, allowing you to view granular resource-level costs and understand them in the context of an application or service. The graph traces resources back to their source in code, allowing you to identify owners and easily implement cost optimization changes.
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Who owns cloud cost?
Cloud cost ownership has evolved. Traditionally, the finance team ran the budget forecasts and handled any chargebacks/showbacks, while engineering oversaw the infrastructure’s design and daily operational grind.
The cloud disrupted this model. Resources are spun up and torn down continuously, with autoscaling reshaping the footprint minute by minute. Each deployment can tip the cost ledger. Prices, discounts, and contractual commitments drift over time, so costs have to be assigned in real time to services, teams, and products.
FinOps turns cost into a shared responsibility across engineering, finance, product, and security. The practice intertwines culture, processes, and tooling, enabling teams to negotiate trade‑offs between speed, expense, and quality while relying on the data.
The rise of FinOps as a role
Many cloud‑native organizations now have a dedicated FinOps unit, with a manager heading a small team. The core mission is to champion cost accountability by embedding cost‑aware thinking into engineering.
How FinOps orchestrates ownership
FinOps is cross‑functional; it coordinates with all stakeholders:
FinOps: Sets the schedule for budgeting, alerts, and reviews; builds shared dashboards; manages commitments (reserved instances, savings plans); drives remediation and optimization
Finance: Partners on forecasting; validates unit pricing; manages distribution of expenditures, as well as oversees accounting and reporting
Product/business: Puts cost‑to‑serve front and center when choosing which features to prioritize, monitors margins closely, and defines cost‑related service‑level objectives where applicable
Procurement / vendor management: Negotiates CSP and SaaS pricing, discounts, and credit arrangements
Security/compliance: Lowers risk and trims waste by purging zombie and unowned resources while ensuring any optimizations maintain security posture
With a shared source of truth and real‑time visibility, teams move from blame to collaboration. Engineering can see the financial impact of changes; finance can trust attribution and forecasts; and security can target risky, wasteful spend.
The link between cloud cost, architecture, and risk
Cloud costs are more than just numbers in a budget. When cloud expenses rise quickly and wasteful usage persists, larger issues may be at play. These cost problems usually point to the following situations:
Excessive infrastructure usage: Excessive database provisioning and large VM fleets result in both unnecessary spend and increased exposure to security threats.
Forgotten resources: Unattached volumes and zombie workloads aren’t just forgotten resources; they’re hidden security vulnerabilities waiting to be exploited. Imagine a server, abandoned and unpatched, sitting idle with no one to claim responsibility. It’s a ticking time bomb.
Unowned services: When a resource lacks defined ownership, you have two major problems: a billing enigma and potential security and compliance risk. You need to determine which team is responsible for the service and its oversight, to ensure it is properly managed from both a cost and security perspective.
To solve these problems, context is king. A standard cost tool reveals EC2 instance expenditure but provides no further details. A graph-based platform, like Wiz, displays the same EC2 instance with its internet exposure, critical vulnerabilities, and access to a production database. Even better, with a code-to-cloud visibility approach, Wiz traces that resource back to the exact line of IaC code that provisioned it, empowering developers to fix issues at the source.
How to control cloud cost: Practical strategies
Simply knowing what your cloud expenses are isn't enough for effective cost management. Continuous improvement and cost awareness must be prioritized.
You need strategic planning and real-time visibility via automated governance to deliver real cloud cost savings:
Enforce resource tagging and ownership: Every new resource must receive tags for cost attribution purposes; this includes owner information, project details, and environment designations.
Slice and dice your cost data: A cost analysis requires a platform that enables examination from different angles. You need visibility into service-based, team-based, application-based, and business-unit-based spending to properly manage and optimize costs.
Enable near real-time cost monitoring: Near real-time cost monitoring provides immediate visibility, letting you track expenses during active operation so you can identify spikes in cost and address them before they become costly overruns.
Set budgets and alerts: Establish defined budgets for teams and projects along with automated alert systems that trigger when spending approaches set thresholds. Being proactive avoids unexpected costs!
Reduce waste: Manually searching for unused resources wastes engineers’ time and money. Create automated workflows that detect unnecessary infrastructure, including old snapshots, so you can reduce waste. Cutting unneeded resources results in cloud cost savings, as well as security benefits due to a reduced attack surface.
Embed cost governance into cloud hygiene: This practice should become an integral part of your cloud management and hygiene strategy. Cost management, security, and compliance are deeply intertwined and mutually supportive.
With these practical steps, you will provide your teams with unified, real-time visibility into costs, security, and configuration data, giving them a strategic advantage.
See how you can convert your cloud expenses into strategic benefits. See Wiz in action today.
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