Corporate Vision UK SMEs risk wasting a third of cloud budgets without stronger governance Mark Appleton, Group Lead Vendor Ecosystem Development at ALSO Group, highlights the hidden costs in SME cloud budgets and the role of governance Organisations are losing nearly a third of their cloud budgets to idle resources and underused licences, with SMEs particularly exposed, according to Flexera’s 2025 State of the Cloud report. For smaller businesses operating on tight margins, these hidden costs can directly hinder growth, recruitment, and investment. Many SMEs assume that dashboards and usage reports provide enough oversight to manage cloud spending effectively. In reality, visibility alone cannot prevent overspend. “Dashboards show what has been spent, but they do not stop overspending before it happens,” said Mark Appleton, Group Lead Vendor Ecosystem Development at ALSO Group. “Cloud cost control is more than visibility. It requires governance. Without structured policies, automated controls, and accountability measures, businesses risk continuing to pay for resources they do not need or workloads that should have been scaled back or shut down.” The challenge extends beyond IT departments. For finance teams, unpredictable cloud bills create uncertainty that can disrupt budgeting and planning. “The real issue is not only unnecessary spend but unpredictability,” added Appleton. “Finance leaders need budgets they can rely on, while IT teams require efficient, optimised workloads. Effective governance bridges that gap, providing predictability for finance and operational control for IT.” Embedding governance into daily operations means putting structured policies into practice. Examples include implementing permission-based access to cloud resources, automating the shutdown of idle workloads, and applying forecast modelling to anticipate future costs. These measures move SMEs from reactive cost management to proactive control, helping to reduce financial risk while improving planning accuracy. The benefits are measurable. SMEs that adopt structured cloud cost management practices often report significant reductions in unnecessary spend. “When businesses introduce automated cost controls and clearly defined policies, they frequently see immediate improvements in budget predictability,” said Appleton. “This allows resources to be redirected towards strategic priorities, such as innovation, expansion, or customer service initiatives.” For SMEs, the stakes are particularly high. Cloud services offer flexibility and scalability, but unmanaged costs can erode these advantages. Oversized or underutilised infrastructure, redundant licences, and unmonitored subscriptions can quietly inflate monthly bills. Structured governance ensures that cloud spend aligns with actual business needs and objectives, making the cloud both a strategic asset and a predictable part of the organisation’s operating costs. Appleton concluded: “SMEs cannot afford to treat cloud spend as an afterthought, embedding governance practices is not about restricting flexibility; it is about ensuring that cloud investment delivers value, reduces financial risk, and supports growth. The right approach allows organisations to maintain agility while gaining confidence that their budgets are being used efficiently.”
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