You signed the contract based on a TCO (Total Cost of Ownership) analysis that promised a 30% reduction in infrastructure spend. The slideware was compelling: shut down the data center, move to the cloud, and watch the OpEx savings roll in. Six months later, you are staring at a monthly AWS bill that is double your old on-prem costs, and you haven't even decommissioned the legacy servers yet.
You are not an outlier. You are the statistical norm. According to Forrester’s recent data, 72% of IT decision-makers exceeded their set cloud budgets in the most recent fiscal year. This isn't just a rounding error; it is a systemic failure of estimation. The problem isn't that the cloud is expensive—it's that the migration model sold to Enterprise CIOs is fundamentally broken.
The root cause is almost always the "Lift and Shift" trap. In the rush to meet arbitrary digital transformation deadlines—often set by boards who read about AI in the Wall Street Journal—teams opt for the path of least resistance: rehosting. They take inefficient, monolithic applications designed for static hardware and drop them into an elastic cloud environment. The result? You are paying premium cloud prices for legacy architecture. You haven't modernized; you've just rented a more expensive data center.
When we audit stalled migrations at Fortune 1000 firms, the budget overruns rarely come from compute instances. Everyone knows how to price an EC2 instance. The financial bleeding comes from the three categories that never make it into the initial SI (System Integrator) proposal.
Ingress is free; egress is where they catch you. In a hybrid environment—which Gartner predicts 90% of organizations will adopt by 2027—data doesn't just sit; it moves. It moves between your on-prem legacy systems and your new cloud analytics platform. Every gigabyte that leaves the cloud to talk to your mainframe incurs an egress fee. We recently saw a logistics firm bleed $45,000 a month solely because their cloud-based ERP was chatting constantly with a warehouse system they couldn't migrate. The architecture diagram looked clean; the invoice did not.
Most migration plans assume a linear transition: System A turns off on Monday, System B turns on Tuesday. Reality is messy. You will likely run both environments in parallel for 6 to 18 months. This "dual-run" phase effectively doubles your infrastructure cost during the transition window. If your budget didn't account for paying the data center lease and the cloud bill simultaneously for a year, you are already in the red. Refer to our 28,000-User Migration Playbook for how to manage these overlapping timelines without blowing the quarter.
Your legacy sysadmins are not cloud architects. The skill gap is real, and bridging it is expensive. You either pay premium rates for contractors ($250+/hour) to fix the mess, or you suffer from "shadow IT" where developers spin up expensive resources without governance. Flexera's 2025 State of the Cloud Report notes that 27% of all cloud spend is wasted—mostly due to over-provisioned resources and zombie instances that no one turned off.
If you are currently 3x over budget, stopping the migration is rarely an option. But you must stop the bleeding. The solution is not to "optimize" later; it is to engineer cost controls now. We call this the "Governance First" reset.
Cloud migration is not a destination; it's a financial operating model. Treat it like one. If you don't have a FinOps function with the authority to shut down servers, you don't have a cloud strategy—you have a spending problem. For a deeper dive on benchmarking your spend against peers, read The Black Box of IT Spend: 2026 Benchmarks.
