The hidden environmental cost of cloud waste

We all remember the original premise of cloud computing. You can run your datacenter more efficiently, you do not have to buy the head room in your datacenter to cater for spikes and you only use what you need, when you need it, from a much more efficient provider. Win-win-win. Fast forward two decades, and the sheer convenience of cloud, the complexity of management, and its relentless pursuit of the next big thing, has meant that cloud consumers are wasting tremendous amounts datacenter capacity, and with that wasting unprecedented levels of energy.

Cloud waste is a growing problem

Gartner estimates that on average 30% of cloud spend is wasted. This could be anything ranging from incorrectly sized compute resources, to dark data and legacy systems. This report estimates that 52% percent of business' data in the cloud is dark data, and IDC estimated the total amount of wasted storage in 2025 to be upwards of 91 zettabytes. This all has led to clouds now emitting more carbon (CO2) than the airline industry. With the rise of AI, the hyperscale clouds are rapidly becoming the worlds largest energy consumer. This is despite admirable efforts from these hyperscalers to invest in green energy to power their data centres.

Ownership is with the user

Of course humanity has gotten a lot of innovation from cloud in return, and even if we tried to go back, the horse has bolted. Cloud vendors have not made it easy to spot your waste, and this is partly by design. Their lack of understanding on what your business is doing on the platform, means you get a more secure experience. Companies like Netflix would be a lot more apprehensive to use AWS, if AWS built deep business insights and used it to tracked exactly what Netflix was doing from a business perspective on the platform. The downside is of course bill shock, and an ever increasing burden on cost management. With the FOCUS cost management framework and the many FinOps tools that we have gotten since 2010, there has been some positive movement in this space. The onus however, still remains on the customer to action it, and all of these tools are still very much infrastructure oriented.

Culture, decentralization and financial metrics

The only way to get back to the original promise of cloud, is to solve the wastage problem where it is occurring. For that you need a decentralized approach that helps foster a culture of efficiency throughout the business. Enterprises often have an intention/project/half-year-goal to reduce cost, but this wack-a-mole approach is simply not going to lead to sustainable cloud usage. There are too many recurring activities when it comes to cloud management, and teams have disparate goals. At scale, businesses need ongoing measurable benchmarks that show financial impact, engineers need actionable intelligence at a decentralized, individual team level, and FinOps need the ability to set team/product KPIs for teams to stick to. This is why we felt the need to create Optimaze, because all existing tools in the market focus on technical minutiae, which lose most before-mentioned stakeholders along the way.

Providing real-time visibility into financial impact and enabling self-service capabilities across business stakeholders creates organizational alignment and accountability. This approach eliminates the centralized FinOps bottleneck that inhibits timely action on cloud waste at the operational level, while reducing manual reporting overhead and allowing teams to focus on strategic, value-generating initiatives. The outcomes include enhanced transparency in cloud spend versus business value, leading to more informed decision-making and meaningful reductions in cloud costs and waste. Organizations benefit from streamlined FinOps operations and achieve one of the most substantial reductions in energy consumption and carbon emissions possible without altering customer-facing services.