Nallas Corporation

Why SMEs Lose Money in the Cloud – and How FinOps Fixes It

The cloud is often pitched as a cost-saver and innovation enabler. And while it can be both, many organizations—especially SMEs and nonprofits—find themselves facing ballooning bills and wasted resources. 

According to techradar.pro, 43% of organizations do not track cloud costs at a granular level. Even more striking, 34% of businesses spend over $1M per month on SaaS applications. A significant portion of this spend is wasted due to underutilized licenses, idle resources, and poor governance. 

For large enterprises, wasted spend is frustrating. But for SMEs and Nonprofits, it can be devastating—limiting funds that could otherwise go toward growth, programs, or mission-critical initiatives. 
 

The Hidden Problem: Cloud Cost Waste

Cloud waste often hides in plain sight. Some common examples include: 

  • Idle compute resources – Virtual machines left running overnight or during weekends. 
  • Overprovisioned infrastructure – Paying for higher capacity “just in case” without actual usage. 
  • Zombie resources – Storage, snapshots, or licenses no one uses anymore but still accumulate charges. 
  • SaaS license sprawl – Multiple subscriptions for the same service across different departments. 
  • Lack of accountability – Engineering, finance, and business teams not aligned on who owns cloud budgets. 

In short without visibility and governance, costs spiral out of control. 

Introducing FinOps: The Discipline of Cloud Financial Management

This is where FinOps (Cloud Financial Operations) comes in. FinOps is not just a tool—it’s a cultural shift combining finance, engineering, and business operations to optimize cloud spending without slowing down innovation. 

Core Benefits of FinOps:

Real-time visibility – Clear dashboards showing exactly where money goes. 
Shared accountability – Every team (engineering, finance, ops) takes responsibility. 
Shift-left governance – Embedding cost awareness into design and deployment processes. 
Benchmarking & rightsizing – Regularly adjusting workloads to match actual needs. 
20–30% efficiency gains – Typical savings when FinOps practices are adopted. 

Why FinOps Matters for SMEs and Nonprofits

While FinOps is often associated with large enterprises, its value is even higher for smaller organizations: 

  • For SMEs: Cloud overspend eats directly into growth margins. Savings from FinOps can fund innovation, hiring, or scaling operations. 
  • For Nonprofits: Every dollar wasted is a dollar not going toward the mission. FinOps ensures technology spend aligns with impact. 

Example: A nonprofit running donor management system in the cloud reduced its cloud bill by 28% simply by rightsizing compute resources and cutting unused SaaS licenses. 

Steps to Start Your FinOps Journey

  1. Audit your current spend – Identify idle, zombie, or underutilized resources. 
  2. Set KPIs and ownership – Define who is accountable for costs across teams. 
  3. Implement visibility tools – Use dashboards and alerts for real-time tracking. 
  4. Right-size workloads – Scale resources to match actual usage patterns. 
  5. Embed cost awareness into culture – Make “cost per deployment” part of engineering reviews. 
  6. Iterate & improve – FinOps is not one-time—it’s continuous. 

The ROI of FinOps

Organizations adopting FinOps see 20–30% savings on cloud bills within months. But beyond savings, FinOps drives confidence in cloud adoption. It ensures that budgets are predictable, stakeholders are aligned, and innovation is not stifled by cost anxiety. 

For SMEs and Nonprofits, FinOps is not just a “nice-to-have”—it’s a competitive advantage and mission enabler. 

Conclusion

The cloud is powerful, but without control, it can also be expensive. SMEs and Nonprofits need every dollar to work harder. By partnering with cloud solution experts like Nallas helps in embracing FinOps, it can eliminate waste, bring transparency, and redirect savings toward growth or mission impact. 

FAQs – Cloud Cost Waste & FinOps

  1. What is cloud cost waste?
    Cloud cost waste refers to money spent on unused or underutilized cloud resources. Examples include idle servers, overprovisioned storage, duplicate SaaS licenses, or “zombie” workloads running without business value. Without proper tracking, these costs accumulate unnoticed.
  2. Why do SMEs and Nonprofits overspend on the cloud?
    SMEs and Nonprofits often lack dedicated FinOps teams or visibility tools. As a result, they may overspend on unused resources, forget to shut down test environments, or continue paying for duplicate SaaS subscriptions. Every dollar wasted impacts growth or mission-critical funding.
  3. What is FinOps in cloud computing?
    FinOps (short for Financial Operations) is a discipline that combines financial accountability, cloud engineering, and operations to optimize cloud spending. It focuses on real-time visibility, shared accountability, and governance to ensure organizations only pay for what they truly use.
  4. How much can FinOps save an organization?
    Organizations that implement FinOps effectively typically achieve 20–30% savings on cloud bills. For SMEs and Nonprofits, these savings can be redirected toward scaling operations, hiring, or funding social impact initiatives.
  5. How can I start implementing FinOps in my organization?
    To start with FinOps:
  • Audit your current cloud spend. 
  • Identify idle or underutilized resources. 
  • Assign ownership of cloud costs across teams. 
  • Use cost visibility dashboards and monitoring tools. 
  • Continuously right-size workloads and improve governance. 
  • Consult trusted implementation partners like Nallas 

Author

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Megha Koli

Lead - Strategy

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