Flexera has released their 2025 State of the Cloud report, and the numbers are sobering for anyone responsible for cloud budgets.
The Headline Numbers
27% of cloud spend is wasted - Down slightly from previous years, but still massive. For a company spending £1M on cloud, that's £270,000 going nowhere.
84% of organisations cite managing cloud spend as a significant challenge - Up from previous years, despite more tooling being available.
FinOps is mainstream - 60% of organisations now have a FinOps function or dedicated cloud cost management role.
What's Driving the Waste?
The report identifies the usual suspects:
- Idle resources - VMs, databases, and storage running but unused
- Oversized instances - Paying for capacity that's never utilised
- Lack of commitment discounts - Not using Reserved Instances or Savings Plans
- Poor visibility - Not knowing what's running or who owns it
None of this is new, but it's persistent. The tools to fix it exist, but organisations struggle to implement them.
The FinOps Maturity Problem
Here's the interesting finding: Most organisations are stuck in the "Inform" phase of FinOps maturity.
The FinOps Foundation defines three phases:
- Inform - Visibility into costs and usage
- Optimise - Acting on optimisation opportunities
- Operate - Continuous, automated cost management
The report suggests that while many organisations have achieved visibility, they're not effectively acting on what they see. The data is there, but the operational processes aren't.
What Successful Organisations Do Differently
The report highlights practices that correlate with better cost control:
Executive sponsorship - FinOps initiatives with C-level backing achieve better outcomes.
Cross-functional teams - Finance, engineering, and operations working together, not in silos.
Engineering ownership - Teams responsible for both building and paying for their infrastructure.
Automation - Policies that enforce cost controls rather than relying on manual review.
Commitment coverage - Organisations with high RI/Savings Plan coverage have lower effective costs.
Azure-Specific Findings
For Azure specifically:
- Azure usage continues to grow, particularly for existing Microsoft customers
- Azure cost management tooling has improved, but many organisations still use third-party tools
- Hybrid deployments (Azure + on-prem) are common but add complexity to cost allocation
What This Means for You
If you're spending on Azure and haven't done a cost review in the last 6 months, you probably have waste to find. The 27% figure is an average - some organisations are better, some are worse.
Key questions to ask:
- Do we know what we're spending and why?
- Do we have coverage gaps in Reserved Instances?
- Are our dev/test environments running 24/7?
- When did we last right-size our VMs?
Our Take
The Flexera report confirms what we see in every assessment: most Azure environments have significant optimisation potential.
The good news is that it's fixable. A focused review typically identifies 20-40% savings within weeks.
The challenge is getting started. That's why we offer a free savings snapshot - no commitment, just visibility into where the waste is hiding.
Source: Flexera 2025 State of the Cloud Report
Want to know where your organisation sits? Get a free savings snapshot and find out how much you could save.