Businesses use the cloud for scalability, security, agility, speed to market, reducing operational expense and other reasons. Some users, however, aren’t saving as much money as hoped or expected, and cloud costs continue to rise. Our five recommendations to reduce cloud costs can make a difference.
According to the Flexera 2025 State of the Cloud Report, the top initiative is optimizing existing use of the cloud (cost savings) – for the ninth year running. Cost efficiency/savings remains the No. 1 metric for assessing progress against cloud goals, and 85% of respondents say that managing cloud spend is the top cloud challenge.1
Factors that drive up cloud costs include:
With respect to the last bullet point, CoreSite direct cloud connectivity can reduce data transport costs substantially – a great reason to build colocation into your multicloud strategy. Let’s look at direct connection and other strategies that can make a big difference to your cloud cost optimization initiative.
Cloud providers sometimes charge fees that you might not expect. For example, a data egress fee is the per-gigabyte cost to transfer your own data out of the cloud, and it can be surprisingly expensive. While there is typically no charge for uploading your data into the cloud, you pay to get it out. Data volume is hard to estimate, and you may not realize how much data is being moved – until you get the bill.
Common cloud activities escalate data egress costs: migrating data from one cloud to another, downloading data to your on-premises systems, moving data between applications or replicating data for disaster recovery. A few percentage points of egress fees add up quickly.
If you are among the many enterprises considering an artificial intelligence (AI) implementation, you know that an incredible amount of data is inherently part of the project.
Abate egress fees by using direct connection – a dedicated, physical fiber interconnect to a cloud provider from a colocation facility. For example, CoreSite offers direct connectivity to AWS, Azure, Google and Oracle, bypassing the public internet, which can result in up to 70% savings on data egress rates.2
FinOps is the practice of maintaining a culture of financial accountability with respect to the cloud. FinOps software solutions increase visibility into your cloud costs and usage, allowing you to identify trends and gain insights. The software helps you minimize unused resources, find the most cost-efficient cloud platforms and plans, and reduce cloud spend.
Solutions in the FinOps market may have different names. For example, cloud cost management (CCM), cloud financial management (CFM), cloud economic optimization (CEO, and not to be confused with the other one!) and IT financial management (ITFM).3 FinOps providers include Kubecost, Holori and CloudZero.
Scalability is a top advantage of the cloud. However, if you allocate resources manually, you can inadvertently overprovision, which leads to higher cloud costs because you pay for resources even when they are idle. When you use autoscaling, you can set parameters that trigger automatic up-or-down adjustments of cloud resources.
Autoscaling is critical when you host workloads in the cloud that use unpredictable amounts of resources. It scales up resources to keep mission-critical and customer-facing services up and running, and it scales down unnecessary resources to reduce cloud costs. The major cloud providers all offer autoscaling features. Check out AWS Auto Scaling to learn more.
The major public cloud services – AWS, Azure, Oracle and Google – provide built-in cloud cost optimization tools to monitor, track, forecast and optimize cloud costs. Stronger governance policies and greater accountability can help you manage cloud costs now and in the future.
The hyperscaler tools are part of your cloud provider’s service offerings, whereas FinOps products are standalone tools. For example, Microsoft Cost Management tools include Copilot in Azure, Azure Advisor and Azure Pricing Calculator.
Other software products – such as application performance management (APM) and observability solutions – include cloud monitoring modules with features to track costs. These products are designed to monitor and manage application or infrastructure availability and performance. They also enable you to analyze cloud resource usage and costs and alert you of cost-related issues.
Leaders in observability are almost twice as likely to have better visibility into public cloud infrastructure.4
Vendors that offer cloud cost-monitoring tools include Harness, DigitalOcean, Kubecost, NetApp and Cast AI.
Technology alone cannot reduce your cloud expenditures. When you use some of the best cloud cost management tools for enterprises, you can support a cloud-conscious culture. The potent combination of aware employees and technology can save your organization a significant amount of money, without limiting your access to high-performance cloud services.
Know More
Buckle up, sit back and learn why CoreSite direct cloud connections are the way to fly.We welcome the opportunity to learn about your specific business objectives and technical challenges, and exchange thoughts on how we can help you become a future-ready enterprise.
When you are ready, contact us.
In the meantime, check out this explainer video describing the performance, security and cost advantages of CoreSite direct cloud onramps.
References
1. Flexera 2025 State of the Cloud Report (source)
2. Cost savings are based on CoreSite cost comparisons using publicly available and private information and/or CoreSite customer reported costs savings and may not be indicative of the costs savings that may be experienced by every customer that switches to the applicable CoreSite service.
3. ClearFinOps, What Is Another Name for FinOps? (source)
4. Splunk, 9 Key Practices of Observability Leaders (source)