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Optimizing cloud demand management: A strategic approach to cost and sustainability

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Insight
Summary

Written by Ruzual Boparai, Mike Alloy, and Oliver Hegi

As organizations race to harness the power of AI, big data, and next-generation platforms, cloud computing has become indispensable. But for the C-suite – particularly Chief Financial Officers (CFOs), Chief Information Officers (CIOs), Chief Sustainability Officers (CSOs), and Chief Procurement Officers (CPOs) – this growth brings a new challenge: managing cloud demand in a way that is both financially and environmentally sustainable.

Global cloud spend is projected to reach $700 billion in 2025, with cloud infrastructure services growing 20% year-over-year, primarily driven by new AI services (Gartner). The scalability of cloud computing is a double-edged sword: without effective oversight, cloud computing can quickly drive up both costs and carbon emissions. 

In this article, we share how enterprise C-suite leaders can leverage FinOps and Procurement to bring structure, visibility, and accountability to cloud consumption – unlocking value through smarter demand management, stronger vendor partnerships, and measurable sustainability improvements.
 

The cloud boom: A double-edged sword

Cloud computing offers numerous advantages, including scalability, resiliency, and the financial and operational benefits of outsourcing hosting rather than maintaining in-house infrastructure. Yet, as with any resource that is easily accessible, unchecked usage can spiral quickly. 

Organizations often overprovision computing power, forget to decommission test environments and delete data, or allow auto-scaling features to drive up usage, all without central visibility. As a result, companies often provision 37% more cloud resources than they use, and eliminating this waste could reduce cloud spend by as much as 50% (CastAI, as reported by The Register) – and yet these inefficiencies are common in high-growth technology companies. 

Cloud usage also has a significant environmental impact. The ICT sector, including cloud computing, accounts for 1.8% to 3.9% of global greenhouse gas emissions (CNCF), likely more than global aviation. In the U.S. alone, data centers – critical to the cloud ecosystem – consumed the equivalent of four months of London’s water usage in 2023 (Financial Times), and energy demand from AI-optimized facilities is projected to more than quadruple by 2030 (IEA). 

Cloud computing is growing into a challenge that demands urgent C-suite attention. Without effective strategies for cloud procurement, demand management, and sustainability, organizations risk rising costs, unmanaged emissions, and reputational damage.

FinOps: Optimizing cloud usage, costs, and emissions

Fortunately, improving cloud efficiency has a dual benefit – it reduces costs while also curbing the usage of a highly energy-intensive resource. This alignment of financial, operational, and ESG goals positions FinOps as a powerful strategic lever for margin protection and sustainable growth.

FinOps is an operational framework that gives CFOs and CIOs visibility and control over what has become a decentralized cost center. It ensures that Engineering, Finance, and business teams work from the same data and share accountability for cloud spend. Without it, cloud spend can quietly erode margins and derail forecasts; with it, organizations can strengthen demand management, control costs and protect profitability, and reduce their environmental impact. 

Leaders should ensure their FinOps and engineering teams are equipped to address common inefficiencies through:

  • Environment cleanup: Regularly identify and decommission unused VMs, disks, and databases
  • Data lifecycle management: Enforce deletion policies or shift stale data to more efficient storage tiers
  • Usage caps: Set compute limits for testing environments to avoid cost spikes
  • Auto-scaling governance: Ensure inactive environments are shut down or scaled back
  • Right-sizing: Adjust resources to prevent over-allocation of compute and memory
  • Scheduling: Automate workloads to remain dormant during off-peak hours


Beyond technical solutions and resource optimization, FinOps best practices emphasize visibility and governance. C-suite leaders should equip stakeholders across Product, Engineering, and Finance with actionable metrics that align decentralized decisions with enterprise goals. Teams should also be empowered with monitoring and reporting tools that can present sustainability KPIs alongside cost metrics. Treat emissions metrics as first-class indicators – tracked, reported, and managed like those for cost or performance – so that environmental impact is fully reflected in planning and decision-making.
 

Procurement’s role in cloud sustainability

While FinOps focuses on internal usage, Procurement plays a complementary role in advancing sustainability goals externally: shaping vendor relationships, contract terms, and sourcing strategies.

Cloud vendor selection is a high-stakes decision – driven not only by technical compatibility and cost structures, but also by long-term strategic alignment. With specialized services and high switching costs, many organizations commit to single-provider strategies for efficiency and simplicity, while others pursue hybrid or multi-cloud models to ensure flexibility and mitigate risk.

While sustainability may not always be the driving force behind cloud provider selection today, the outlook is promising: 63% of cloud market share is controlled by providers which are advancing rapidly on their sustainability journeys (SRG, as reported by CRN). Google Cloud Platform (GCP) and Amazon Web Services (AWS) already match 100% of their energy consumption for data centers with renewable energy purchases, while Microsoft Azure has pledged to achieve the same by year-end. These are important milestones which signal where the industry is heading – and choosing a provider aligned with that trajectory will be key to organizations achieving their sustainability goals.

That said, cloud sustainability is far from a foregone conclusion. Despite ambitious targets and increased investment in renewable energy, Google’s energy-related emissions still rose in 2023 (Google). This underscores the need for stronger partnership and alignment between corporate sustainability strategies and provider commitments. Procurement can enable strategic relationships around joint sustainability initiatives: teams can negotiate vendor-led sustainability training for product and engineering teams, support co-developed research, organize industry knowledge exchanges and conferences, and engage in joint initiatives to drive sustainable innovation across the cloud ecosystem.

Procurement and FinOps: A unified strategy for sustainable cloud growth

By aligning Procurement and FinOps, organizations unlock a rare opportunity: to manage cloud demand in a way that strengthens financial performance and advances sustainability goals. Reducing wasteful consumption is no longer just about efficiency. It’s a lever for margin protection, emissions reduction, and operational agility.

A strategic approach to cloud governance leverages organization-wide visibility, promotes distributed ownership, embeds KPIs into planning and decision-making, and leverages the right tools for monitoring and reporting. This cross-functional model creates a shared foundation for Engineering, Finance, and Sustainability teams to collaborate.

Cloud is central to digital strategy, ESG performance, and enterprise resilience. Forward-looking organizations will treat cloud optimization not as a one-time initiative, but as a continuous discipline – one that turns financial stewardship and climate responsibility into a source of competitive advantage.

 

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