7 Hidden Costs in Cloud Computing: What Every Business Needs to Know

As the Head of Engineering at Bacancy, I have had the privilege of leading our cloud initiatives and helping scale our infrastructure. Over the years, we have leveraged the cloud for its flexibility, scalability, and speed, all of which have been critical to our business growth. However, as many companies quickly learn, the initial promise of cost-effective cloud solutions can sometimes be overshadowed by unexpected costs. In this article, I want to share insights into the hidden costs of cloud services that I have personally encountered and offer practical advice based on my experience. Top 7 Hidden Costs of Cloud Computing While it offers many benefits, businesses often overlook several hidden costs of the cloud. These unexpected expenses can quickly add up and impact your budget. Let’s take a look at the seven hidden costs you should be aware of: 1. Underutilized Compute Resources One of the most common traps in cloud computing is the tendency to over-provision resources. Early on, we often created virtual machines (VMs) or containers to accommodate anticipated spikes in traffic. However, these resources stayed running long after the demand subsided, leading to unnecessary costs. When resources are not being fully utilized, you are paying for capacity that you do not need. For instance, leaving a high-powered instance running during off-hours or using large database instances for small-scale tasks will quickly drive up costs. I have learned that regularly reviewing and adjusting compute resource allocation is critical. A good practice is to automate the shutdown of non-essential resources after business hours or to set up auto-scaling mechanisms that adjust resource capacity dynamically. 2. Data Transfer Fees While storing data in the cloud can often be inexpensive, moving data between regions or services can be costly. In our early days of cloud adoption, we didn’t fully account for the expenses related to data egress (the cost of transferring data out of cloud services). This often happens when you move data between cloud providers, between regions within a single provider, or when serving content to users from different geographical locations. For example, I remember a time when we served large files to customers from an S3 bucket in one region while our main application was hosted in another. We didn’t account for the data transfer costs, and when the usage spiked, our cloud bills soared. To avoid such surprises, I recommend considering data transfer costs when designing your cloud infrastructure. Also, consolidating services into fewer regions, optimizing data storage locations, and using Content Delivery Networks (CDNs) can help mitigate this. 3. Services That Scale Unpredictably Cloud services like AWS Lambda, DynamoDB, RDS, or Google BigQuery offer great flexibility. The pay-as-you-go model sounds perfect for managing costs effectively. However, as your application scales, you may find that your costs grow unpredictably, especially if you're not actively monitoring usage. A service that seems inexpensive when you start may become expensive as your traffic or data requirements grow. For instance, the cost of API calls in AWS Lambda or the storage costs in Amazon RDS can rise sharply as usage increases. Early on, we didn’t have enough visibility into the true costs of these cloud services, which led to some surprises when our projects grew. My advice is to carefully track usage from day one. Set up cost alerts, establish a budget, and regularly monitor the utilization of these managed services to ensure you're not overspending. 4. Forgotten Resources In our initial cloud journey, there were instances where we had leftover resources that we forgot to delete. For example, old EBS volumes or snapshots we no longer needed continued to incur charges. It may seem trivial, but these forgotten resources can add up, especially when left unchecked for extended periods. At Bacancy, we quickly learned the importance of implementing proper resource tagging and regular audits. Tagging resources appropriately helps ensure that we can quickly identify which resources are actively being used and which are not. We also set up automated scripts to clean up unused resources after certain periods. By auditing our infrastructure regularly, we were able to avoid unnecessary costs and keep our cloud expenses under control. 5. Security Misconfigurations One hidden cost that often goes unnoticed is the potential expense resulting from poor security practices. If cloud services are misconfigured or left open to the public, it can lead to data breaches, unnecessary resource consumption, or even exploitation by malicious actors. For example, I’ve seen situations where S3 buckets were left public by mistake, allowing unauthorized users to access and download large amounts of data, leading to both security concerns and unexpected costs. Ensuring that a

May 7, 2025 - 19:28

7 Hidden Costs in Cloud Computing: What Every Business Needs to Know

As the Head of Engineering at Bacancy, I have had the privilege of leading our cloud initiatives and helping scale our infrastructure. Over the years, we have leveraged the cloud for its flexibility, scalability, and speed, all of which have been critical to our business growth. However, as many companies quickly learn, the initial promise of cost-effective cloud solutions can sometimes be overshadowed by unexpected costs.

In this article, I want to share insights into the hidden costs of cloud services that I have personally encountered and offer practical advice based on my experience.

Top 7 Hidden Costs of Cloud Computing

While it offers many benefits, businesses often overlook several hidden costs of the cloud. These unexpected expenses can quickly add up and impact your budget. Let’s take a look at the seven hidden costs you should be aware of:

1. Underutilized Compute Resources

One of the most common traps in cloud computing is the tendency to over-provision resources. Early on, we often created virtual machines (VMs) or containers to accommodate anticipated spikes in traffic. However, these resources stayed running long after the demand subsided, leading to unnecessary costs.

When resources are not being fully utilized, you are paying for capacity that you do not need. For instance, leaving a high-powered instance running during off-hours or using large database instances for small-scale tasks will quickly drive up costs. I have learned that regularly reviewing and adjusting compute resource allocation is critical. A good practice is to automate the shutdown of non-essential resources after business hours or to set up auto-scaling mechanisms that adjust resource capacity dynamically.

2. Data Transfer Fees

While storing data in the cloud can often be inexpensive, moving data between regions or services can be costly. In our early days of cloud adoption, we didn’t fully account for the expenses related to data egress (the cost of transferring data out of cloud services). This often happens when you move data between cloud providers, between regions within a single provider, or when serving content to users from different geographical locations.

For example, I remember a time when we served large files to customers from an S3 bucket in one region while our main application was hosted in another. We didn’t account for the data transfer costs, and when the usage spiked, our cloud bills soared. To avoid such surprises, I recommend considering data transfer costs when designing your cloud infrastructure. Also, consolidating services into fewer regions, optimizing data storage locations, and using Content Delivery Networks (CDNs) can help mitigate this.

3. Services That Scale Unpredictably

Cloud services like AWS Lambda, DynamoDB, RDS, or Google BigQuery offer great flexibility. The pay-as-you-go model sounds perfect for managing costs effectively. However, as your application scales, you may find that your costs grow unpredictably, especially if you're not actively monitoring usage.

A service that seems inexpensive when you start may become expensive as your traffic or data requirements grow. For instance, the cost of API calls in AWS Lambda or the storage costs in Amazon RDS can rise sharply as usage increases. Early on, we didn’t have enough visibility into the true costs of these cloud services, which led to some surprises when our projects grew. My advice is to carefully track usage from day one. Set up cost alerts, establish a budget, and regularly monitor the utilization of these managed services to ensure you're not overspending.

4. Forgotten Resources

In our initial cloud journey, there were instances where we had leftover resources that we forgot to delete. For example, old EBS volumes or snapshots we no longer needed continued to incur charges. It may seem trivial, but these forgotten resources can add up, especially when left unchecked for extended periods.

At Bacancy, we quickly learned the importance of implementing proper resource tagging and regular audits. Tagging resources appropriately helps ensure that we can quickly identify which resources are actively being used and which are not. We also set up automated scripts to clean up unused resources after certain periods. By auditing our infrastructure regularly, we were able to avoid unnecessary costs and keep our cloud expenses under control.

5. Security Misconfigurations

One hidden cost that often goes unnoticed is the potential expense resulting from poor security practices. If cloud services are misconfigured or left open to the public, it can lead to data breaches, unnecessary resource consumption, or even exploitation by malicious actors.

For example, I’ve seen situations where S3 buckets were left public by mistake, allowing unauthorized users to access and download large amounts of data, leading to both security concerns and unexpected costs. Ensuring that all resources are securely configured and implementing best practices for security is essential. We use Identity and Access Management (IAM) to limit access to our services and enable automated alerts when potential security threats are detected.

6. Vendor Lock-In and Overengineering

Cloud services offer great convenience, but they can also lead to vendor lock-in if you're not careful. Many developers fall into the trap of using a wide variety of managed services without considering the long-term costs, flexibility, and portability of their architecture.

For example, using a specific database solution or machine learning service that’s deeply integrated into a particular cloud provider can make it difficult to migrate to another provider or to self-host. At Bacancy, we’ve learned the value of building solutions that are flexible and can be migrated with minimal friction. While it’s tempting to rely heavily on hosted services for simplicity, it’s important to also build flexibility into your architecture to avoid becoming dependent on one cloud provider.

7. Lack of Cost Monitoring Tools

One of the most significant reasons cloud costs spiral out of control is the lack of effective cost monitoring. Early on, we didn’t have proper tools in place to track our cloud spending, which meant that unexpected charges would often catch us off guard. Fortunately, cloud providers offer a variety of tools to help monitor and manage costs, but using them proactively is key.

At Bacancy, we implemented regular cost monitoring through tools like AWS Budgets and GCP Cost Explorer. These tools help us keep track of our spending, set up cost alerts, and provide visibility into where our money is going. Regular monitoring, paired with historical data analysis, has been instrumental in ensuring we don’t overspend on cloud resources.

Conclusion

Cloud computing offers great potential, but the hidden costs of cloud can be overwhelming without proper management. At Bacancy, we specialize in helping businesses optimize their cloud infrastructure. Whether it’s reducing data transfer costs, selecting the right storage tier, or scaling compute resources efficiently, we have the expertise to help you maximize your cloud investment.

If you’re struggling with hidden cloud costs or need a partner to help you manage your cloud infrastructure more effectively, Bacancy’s cloud managed services can provide the support you need.