The CFO’s Guide to Reducing Cloud Costs Without Sacrificing Performance

Modern finance leaders are increasingly taking on broader role beyond finance— often overseeing enterprise-wide data and analytics, AI adoption, and digital talent acquisition—all while focusing on efficient growth. One of the top trends gleaned from the 2025 Gartner Finance Executive Priorities Survey is that AI usage in finance almost doubled in 2024. For enterprises this means the ability to automate work for the teams, detect errors and gain deeper insights from data. To the CFOs, this translates to investment in cloud becoming a key consideration in budgeting and forecasting.

The survey also highlights that 69% of CFOs focusing on optimising costs find it extremely challenging to reduce expenses without compromising performance. These challenges, along with rising prices of IT solutions, underscore the need for an alternative approach.

Rising cloud costs: financial and operational impacts

While organisations on public cloud services may enjoy flexibility in terms of scalability and accessibility, certain cost and compliance related challenges may be overlooked:

• Egress fees: Moving large datasets across cloud providers can result in unexpected transfer costs. These fees are often unpredictable and can quickly add up, particularly for data-intensive operations or applications that rely on frequent data movement. Underestimating egress fees can disrupt budgets and skew ROI calculations.
• Overprovisioning: To guarantee performance during peak demand periods, many enterprises opt to allocate more resources than necessary – a decision often made in favour of avoiding service disruptions. This ‘just-in-case’ approach, however, results in paying for unused capacity. With funds tied up in maintaining infrastructure that sits idle during non-peak times, it becomes challenging to accurately predict IT expenses over time.
• Compliance risks: Misconfigured environments can happen during rapid expansion and complex configurations of public cloud environments. Such errors can cause organisations to inadvertently fail to meet regulatory standards or breach data sovereignty laws, which can result in hefty fines and reputational damage.

Colocation: an alternative approach to cost management

To help CFOs regain financial control while ensuring operational excellence, colocation can be a predictable cost model that supports CapEx and OpEx strategies such as:

Financial and budget flexibility

• Instead of overprovisioning to accommodate worst-case demand, enterprises can tailor capacity and still be supported by high-density AI workloads (up to 70kW per rack*) and advanced power and cooling solutions.
• Fixed costs for power, cooling, and cross-connects eliminate unpredictable expenses.
• Consolidated billing to simplify financial planning, even during migrations.

Long-term cost savings

• Reduced rack space can cut power expenses and advance sustainability goals.

Risk mitigation and compliance

• Many colocation facilities offer robust SLAs, some even up to 99.999% uptime, and with 24/7 remote hands support (1-hour response time).
• Regulatory alignment with certification and compliance against standards such as ISO 27001, SOC 2, and regional standards like OSPAR (Singapore)*.

Global scalability and cloud integration

• Reach of interconnected data centres across diverse geographies empowers global operations to deploy workloads closer to end users and data sources.
• Direct, low-latency links to AWS, Azure, or other SaaS platforms help enterprises maintain a hybrid strategy without incurring high egress fees or facing latency issues.

Real world example 1

A leading European financial institution reduced monthly costs of 13% and maintained EU financial regulations by transitioning critical workloads from an all-public-cloud model to a colocation environment. This shift helped the institution minimise egress fees, mitigate the effects of overprovisioning, and create a more robust, compliant infrastructure.

Real world example 2

A leading global metals and oil trader identified an urgent need for edge computing as it grew its footprint across the APAC region. To avoid the cost and disruption of relocating, the company remained at its existing data centre in Singapore – a decision driven by strict contractual timelines and a desire for greater visibility into its operations. After an in-depth discovery and assessment, the enterprise devised a swift, low-risk migration strategy, which yielded a more agile, scalable infrastructure that enhanced operational transparency, improved network performance, and saved time and resources. The successful migration enabled continued innovation for the trader, so they could meet evolving demands without compromising efficiency or control.

A data-driven path to efficient growth

Beyond cost savings, a well-executed colocation strategy can support broader CFO priorities as identified in the Gartner survey. Colocation environments:

• Facilitate data governance: Precise control over hardware, network architecture, and access controls enables better data stewardship and integration, reduces silos and enhances data quality – key elements for advanced analytics and AI initiatives.
• Support advanced workloads: High-density racks and robust cooling solutions cater to AI, machine learning, and big data applications. This empowers finance teams to harness cutting-edge technologies without unpredictably scaling public cloud costs.
• Streamline time allocation: By reducing operational firefighting, colocation frees finance leaders to pivot toward strategy, innovation, and cross-functional leadership.

As CFOs seek to balance between solving immediate problems and maintaining long term priorities, the step forward may lie in embracing mixed solutions [link to post on hybrid cloud]. A key element of a hybrid cloud strategy, colocation may prove to be a key component in realising agility in digital transformation.