Why are CFOs Rethinking Cloud Economics

Azul has published a report that looks at how CFOs are shaping through Cloud investments. The report, Cloud Cost Optimisation in 2026, is based on a Censuswide survey of 300 US CFOs and senior finance leaders.

The fourteen-page report breaks down into eight sections, each providing data for one of the survey questions. Each section provides commentary and a data visualisation which highlights the survey answers. Overall, the report is an analytical narrative of the survey’s findings. However, the report doesn’t pose any key questions to the reader or offer citations that provide a clear takeaway.

The report delivers numerous insights and could offer ideas for CFOs as they face their own cloud cost challenges.

The first and most notable finding is that cloud costs are rising as the demands of AI increase. 88% of CFOs said that their cloud costs are rising. 66% noted that cloud spend is a board-level concern, indicating its importance, although no detailed cost information was provided.

Around the challenge with Cloud Costs

While 88% of CFO’s see cloud costs rising, they don’t want this to continue. 40% are focused on reducing overall cloud and infrastructure costs. However, this is only the third highest priority. The top two are investing in AI and automation initiatives (56%). Second was improving cash flow and working capital efficiency (52%), a more traditional priority.

There is hope for cost reduction, though 69% of CFOs believe that between 10% and 30% of cloud spend is wasted, and 18% believe it is between 31% and 50%. Only 6% believe that less than 10% is wasted. What the report did not investigate, with no qualitative element involved, is what that wastage included.

The report does look at the biggest challenge in optimising costs: the complexity of cloud pricing (45%), and an increase in that complexity caused by AI adoption (43%), which are the top two challenges. Perhaps more worryingly, a lack of visibility into usage (32%) ranked third and may indicate a disconnect between IT and the CFO.

How to solve the challenge

You cannot solve a problem without first measuring it, and the survey highlights several ways organisations measure their cloud infrastructure. The top five are:

• Budget forecast accuracy vs actuals (variance) – 31%
• Return on investment (ROI) – 34%
• Cloud utilisation rate – 35%
• Total spend – 35%
• Cloud waste percentage – 35%

CFOs are adopting a diverse range of tools to help identify the costs and usage of cloud solutions. They are using a mix of sources, including:

• AI-powered cloud spend analytics or forecasting – (45%)
• Cloud provider native tools, such as AWS Cost Explorer or Azure Cost Management – (44%)
• Application-level cost observability solutions – (37%)

CFOs are also becoming more familiar with technology, and 16% of organisations already use Java runtime optimisation or the JVM. Other modernisation efforts are making a difference. As AI rises in importance and budget, it is clear that CFOs are looking to reduce costs elsewhere.

While there is fat on cloud costs, there is also a concern that AI projects cannot succeed without the right cloud solutions in place. The result is that CFOs must more closely analyse cloud and IT spend to achieve the cash flow required for investment in AI.

Scott Sellers, President, Co-Founder and CEO of Azul, said, “With nearly nine in ten CFOs seeing cloud costs rise and AI now a top investment priority, finance leaders are being forced to rethink how efficiently their applications consume cloud resources.

“Cloud optimisation has become a strategic lever — one that allows organisations to fund AI innovation, protect margins and bring greater predictability and accountability to cloud investments. Organisations that optimise at the infrastructure level, starting with how their software consumes compute resources, gain a meaningful advantage in funding the innovations that drive growth.”

Enterprise Times: What does this mean

There is much more in this report than the above review. The report is well worded, and the questions throw up some interesting answers. It would have been useful to have gauged a deeper level of opinion through qualitative interviews. It might also have been interesting to gauge the CIO’s view on the same questions.

No surprise that CFOs are looking to cut IT costs, and they already have their target: cloud computing. The dilemma is that, as they reduce cloud spending, are they increasing the risk of AI project failure? It is where the CIOs are critical in explaining which Cloud costs are necessary and which could be cut. CIOs need to plan ahead; in many ways, this report is better aimed at them.

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