Public Cloud Cost Challenges

Key Issues:

• Lack of visibility - Many organizations can't track which departments/projects are driving costs

• Over-provisioning - Resources allocated for peak demand but running 24/7

• Unused resources - Forgotten instances, storage, and services left running

• Data egress fees - Unexpected charges for moving data between regions or to on-premises

• Auto-scaling gone wrong - Misconfigured scaling policies leading to cost spikes

Cost Control Strategies:

• Implement cloud cost management tools (AWS Cost Explorer, Azure Cost Management)

• Establish resource tagging policies for accountability and chargeback

• Use reserved instances and spot instances for predictable workloads

• Set up automated shutdown for dev/test environments

• Regular rightsizing assessments to match resources to actual usage

• Implement budget alerts and spending limits

Enterprise Software Cost Challenges

Key Issues:

• Vendor lock-in with annual price increases and limited negotiation power

• Feature bloat - Paying for capabilities that aren't used

• Per-user licensing that doesn't scale efficiently

• Maintenance and support fees often 20-25% of license costs annually

• Shadow IT - Departments buying redundant solutions

Cost Control Strategies:

• Conduct software audits to identify unused licenses and redundant tools

• Negotiate enterprise agreements with volume discounts

• Consider open-source alternatives where feasible

• Implement software asset management (SAM) programs

• Evaluate SaaS vs. on-premises total cost of ownership

• Establish centralized procurement to prevent duplicate purchases

• Regular vendor contract reviews before auto-renewals

Both areas require ongoing governance, regular monitoring, and cross-functional collaboration between IT, finance, and business units to maintain cost discipline.