UK SMEs risk losing a third of cloud budgets

UK small and medium-sized enterprises (SMEs) could be losing up to a third of their cloud budgets due to idle resources and underused licences, according to Flexera’s 2025 State of the Cloud report. The findings highlight a growing governance gap that leaves many SMEs exposed to unpredictable costs and inefficient cloud usage.

Mark Appleton, Group Lead Vendor Ecosystem Development at ALSO Group, warns that visibility alone is not enough to manage cloud spend. “Dashboards show what has been spent, but they do not stop overspending before it happens,” he said. “Cloud cost control is more than visibility. It requires governance.”

Appleton points to the need for structured policies, automated controls, and accountability measures to prevent unnecessary spending. Without these, SMEs risk paying for unused infrastructure or workloads that should have been scaled back or shut down.

The issue affects more than just IT departments. Finance teams face budgeting challenges due to fluctuating cloud bills. “The real issue is not only unnecessary spend but unpredictability,” Appleton added. “Finance leaders need budgets they can rely on, while IT teams require efficient, optimised workloads. Effective governance bridges that gap.”

Examples of governance in practice include:

• Permission-based access to cloud resources
• Automated shutdown of idle workloads
• Forecast modelling to anticipate future costs.

Appleton notes that SMEs adopting these measures often report immediate improvements in budget predictability. “This allows resources to be redirected towards strategic priorities, such as innovation, expansion, or customer service initiatives.”

While cloud services offer flexibility and scalability, unmanaged costs can erode these benefits. Oversized infrastructure, redundant licences, and unmonitored subscriptions continue to inflate monthly bills. Appleton concludes: “SMEs cannot afford to treat cloud spend as an afterthought. Embedding governance practices is not about restricting flexibility; it’s about ensuring that cloud investment delivers value, reduces financial risk, and supports growth.”