Reducing Cloud Waste in Healthcare: 5 Ways to Optimize Spend

As healthcare organizations increasingly turn to cloud technologies to expand services, enhance efficiency, and safeguard protected health information (PHI), many fail to address a significant hidden challenge: cloud waste.

In 2024 alone, global healthcare organizations spent an estimated $69.8 billion on cloud computing—up from $61.8 billion in 2023. However, 78% of companies estimate that 21% to 50% of their cloud spend is wasted. Applying those figures to the healthcare sector means that as much as $34.9 billion could be lost to inefficiencies.

So, what’s driving this cloud waste—and how can healthcare IT leaders take action?

What Causes Cloud Waste in Healthcare?

• Overprovisioning and Underutilization: Allocating more compute, storage, or bandwidth than required, leading to unnecessary spend.
• Lack of Visibility and Monitoring: Without comprehensive dashboards or analytics, IT teams struggle to identify underused assets or cost anomalies.
• Inefficient Resource Management: Manual provisioning, weak tagging practices, and siloed operations increase complexity and waste.
• Security Concerns and Breach Costs: In healthcare, concerns over data breaches often lead to cautious and inefficient cloud strategies. This caution is understandable, given that the healthcare industry faces the highest average cost of data breaches compared to any other sector.

Tactics to Reduce Cloud Waste in Healthcare

1. Rightsize Your Resources: Continuously monitor and adjust compute/storage allocations to match real usage levels.
2. Automate Resource Scheduling: Shut down non-critical services during off-peak hours using cloud-native automation tools.
3. Enhance Visibility with Monitoring Tools: Adopt cloud cost observability tools that give insight into usage trends and waste patterns.
4. Leverage Reserved and Spot Instances: Use cost-effective purchasing options for predictable or short-lived workloads.
5. Establish Governance and Tagging Policies: Implement naming conventions and tagging rules to track spend by department, function, or workload.

Don’t Let Waste Drain Your Bottom Line

As healthcare budgets tighten and cyber threats escalate, every dollar lost to underutilized or poorly managed cloud resources is a missed chance to drive innovation. Healthcare IT leaders must act now to optimize cloud efficiency, strengthen cost governance, and unlock long-term value.

It’s time to optimize your cloud. Speak with a healthcare cloud expert today.