The elephant in the cloud: how Australian companies are losing control of their budgets

Remember when moving to the cloud was considered a no-brainer? We were promised agility, scalability, and most importantly, cost savings. 

But reality tells a different story. 

Instead of predictability, Australian businesses are caught in a cycle of spiralling costs, hidden pricing traps, and contracts that keep them locked in. As pricing structures constantly shift, maintaining control over IT budgets feels impossible. 

So, the real question is: how long will Australian organisations accept this unsustainable model?

At first glance, cloud pricing seems straightforward. But dig a little deeper, and the hidden costs start piling up. Beneath the promise of ‘flexible’ pricing and automatic scaling lurk steep data transfer fees, shifting discount tiers, and vendor lock-in tactics. Each one designed to keep Australian organisations spending more, without an easy way to reign it in. 

Pay-as-you-go models give flexibility at a cost

The pay-as-you-go model was meant to give you control. Scale up when needed, scale down when you don’t, and only pay for what you use. But in reality, that flexibility can easily trigger runaway costs without the right expertise, governance and tools to keep it in check. This is especially true for legacy applications, which often require more resources in the cloud, because they were never designed for cloud efficiency. 

New technologies like AI demand higher computational requirements, with ADAPT predicting a 35% increase in computing needs within the next two years. Add unmonitored usage, forgotten instances, and cloud providers’ ever-changing pricing structures, and “only paying for what you use” suddenly becomes paying for far more than you expected. 

Australian organisations need more than flexibility, they need predictable IT spend. With 61% of CEOs bracing for financial pressure in 2025, optimising cloud spend is no longer an option, it’s a strategic imperative. 

The bigger your cloud footprint, the tighter the grip

The more your cloud footprint grows, the harder it becomes to leave. What started as a flexible, scalable model can quickly turn into a tangled web of dependencies, making workload shifts difficult and demanding specialised expertise to manage. Data transfer fees, proprietary architecture and re-platforming challenges can transform a strategic move into a costly operational nightmare. Many businesses are already caught in this cycle. 

Forrester’s latest study reveals that 90% of Australian enterprises are already using more than one cloud service to run their business. You have to. The more dependent you are on a single ecosystem, the harder it becomes to negotiate pricing, optimise workloads and control rising costs. 

The companies that take a strategic approach to cloud spending and resource allocation have seen real benefits, with some organisations reporting 200% return on investment in just six months. Without a clear plan, your cloud complexity will only continue to grow. 

Your cloud costs keep rising, and it’s no accident

Cloud pricing isn’t just complex, it’s structured in a way to naturally increase over time. Every discount, pricing model, and contract term are strategic decisions made to keep you spending. Costs creep up through automatic tier shifts, opaque pricing structures and sudden rate adjustments. Changes that often come with little to no warning, leaving Australian organisations stuck paying the price. 

And it’s a price that isn’t going down. The latest research from IDC predicts cloud spending to hit $329.1 billion by 2027, that’s a compound annual growth rate of 17.3%. And while total expenditure going up also represents increased cloud adoption, 43% of organisations say optimising their cloud cost became a key priority in 2024, with 58% saying their cloud costs are simply too high. As cloud costs continue to climb, how long can you afford to wait before rethinking your strategy?

The devil’s in the details: What to watch for in your cloud contracts

Cloud contracts can be tricky, and it’s important you understand the fine print before signing (or renewing) your next agreement. Here are three critical points that every Australian organisation needs to watch for:

• Hidden data transfer fees: Storing data may be cheap, but moving it comes at a premium. There are often substantial egress charges for backups, migrations and even routine transfers. Before signing, look for “egress” definitions, and fully understand the pricing schedules, regional differences, and any thresholds or caps. 
• Tiered usage and introductory periods: That great deal? It won’t last. Once the promo ends, standard pricing kicks in (often at a higher rate). The same goes for tiered pricing, where small usage bumps push you into more expensive brackets. If you don’t know when and how your prices jump, you’re in for a nasty surprise. 
• Automatic resource scaling without cost limits: Without strict controls over scaling policies and spending caps, cloud costs can spiral fast. The default settings prioritise performance over cost control, so ensure your contract allows you to cap usage, monitor spending and avoid any unexpected blowouts. 

The hybrid shift: How Australian companies are taking back control

Australian organisations are already rethinking their cloud strategies as costs rise and business needs evolve. Many are adopting a hybrid approach, with 17% of IT leaders planning cloud repatriation and 16% of organisations targeting specific workloads to move to private and on-prem environments. Because it’s clear that not all workloads belong in the public cloud. 

The increase in cloud repatriation isn’t just about cost. It’s about control, flexibility, and optimal performance. Legacy applications, sensitive data and the need for 100% availability of critical workloads are driving the change. By strategically placing workloads where they operate best, organisations can maximise ROI while maintaining the reliability and security they need in their infrastructure.

Companies like RBC Technology already see the benefits of a hybrid cloud strategy, enhancing scalability, security and support by moving to a private cloud – creating the infrastructure needed to easily handle a doubling of their customer base. 

You can’t ignore the elephant in the cloud. 

Your competition is already taking steps to secure cost stability, stricter compliance and future-proofing their infrastructure. If you fail to act, or double-down on the wrong approach, soon your IT budget won’t be the only thing that’s out of control.

Don’t let outdated cloud models hold you back. 

The future is hybrid, and it starts now.