Our team compiled data from 5 unique sources to estimate cloud migration challenges as of 2026 and found that 54% of organisations cite unclear application dependencies as their leading migration challenge, while an estimated 29% of IaaS and PaaS spend is wasted. The first increase in five years. Because these figures measure different parts of the migration challenge picture in ways that cannot be combined into a single number, we weighed each source by its reliability, recency, and credibility rather than averaging them. Further, we applied our model across planning challenges, cost overruns, cost governance practices, and enterprise value impact to create a complete picture of what makes cloud migration difficult to execute in 2026.
Cloud migration spending environment
Gartner’s forecasts show the scale of the market surrounding cloud migration. Worldwide public cloud spending was expected to reach $723.4 billion in 2025, up 21.5% from the year before, with another 21.3% growth projected for 2026.
These figures cover cloud infrastructure, platforms, and software broadly, so they cannot predict the cost of an individual migration. However, Flexera found that 76% of large enterprises already spend more than $5 million a month on public cloud. At that scale, even small mistakes about usage, timing, or resource needs can get expensive fast.
The figures below show the size and growth of the cloud spending environment organisations are planning within 2026.
| Metric | Figure | Source |
| Global public cloud end-user spending, 2025 (forecast)* | Gartner predicted global cloud spending would reach $723.4 billion in 2025, up 21.5% from 2024. | Gartner, 2024 |
| Public cloud services growth forecast, 2026* | Gartner predicted cloud spending would grow another 21.3% in 2026. | Gartner, 2025 |
| Large enterprises spending over $5 million monthly on public cloud** | 76% of large enterprises spent more than $5 million a month on public cloud. | Flexera, 2026 |
*Gartner figures are predictions, not confirmed spending totals.
**Flexera sells cloud cost management tools, so this is vendor-sponsored research.
These figures establish the scale of the cloud market, but they do not provide a direct benchmark for migration cost. The more useful budgeting question is where migration costs tend to get out of control, and the research points to forecasting difficulty, coordination gaps, and operational complexity.
Cloud migration cost overrun drivers
Migration budgets rarely go off track because of a single line item. More often, costs build when teams underestimate application dependencies, misjudge how quickly cloud usage will grow, or fail to coordinate decisions across technical and business teams.
Flexera’s 2026 survey found that respondents estimated 29% of their spending on infrastructure as a service (IaaS) and platform as a service (PaaS) wasted, a slight increase after five years of decline. Flexera suggests that AI workloads and newer cloud services may be making those costs harder to predict.
The figures below show that forecasting and coordination problems can affect costs at different stages of the cloud journey.
| Metric | Figure | Source |
| Estimated wasted IaaS/PaaS cloud spend, 2026* | Survey respondents estimated that 29% of IaaS and PaaS spend wasted, the first increase in five years. | Flexera, 2026 |
| GenAI adoption as a public cloud service | 58% of survey respondents used GenAI as a public cloud service, up from 50% the year before. | Flexera, 2026 |
| Historical migration cost overrun benchmark** | The average company spent 14% more on cloud migration than planned each year. | McKinsey, 2021 |
*Flexera sells cloud cost management tools, so this is vendor-sponsored research. The 29% figure comes from survey respondents’ own estimates, not an audited number, and it measures ongoing cloud waste, not migration spend specifically.
**This is the most recent public McKinsey figure on migration cost overruns. It comes from a survey of nearly 450 CIOs and IT leaders done in 2020-21, and hasn’t been updated since.
McKinsey’s findings show how coordination failures can push migration spending beyond plan, while Flexera’s research highlights how difficult ongoing cloud costs have become to forecast. Together, they point to a broader budgeting problem: costs are most likely to drift when organisations move forward without a clear understanding of their systems, technical requirements, and likely cloud usage.
Cloud migration planning challenges
Flexera’s survey shows that many cloud migration cost problems begin during planning, before any workloads move. The most commonly reported challenges include understanding application dependencies, assessing technical feasibility, and comparing current on-premises costs with expected cloud spending.
Post-migration cost optimisation also fell from the third most common challenge to the fifth, suggesting that more organisations are focusing on cost earlier instead of waiting to correct problems after migration.
The table below sets out the leading planning challenges reported in 2026.
| Planning challenge | Figure | Source |
| Comparing on premises vs. cloud costs* | 43% of respondents cited comparing on-premises and cloud costs as a leading migration challenge. | Flexera, 2026 |
| Understanding application dependencies | 54% of respondents cited unclear application dependencies as a leading migration challenge. | Flexera, 2026 |
| Assessing technical feasibility | 44% of respondents cited technical feasibility as a leading migration challenge. | Flexera, 2026 |
*Flexera sells cloud cost management tools, so this is vendor-sponsored research.
This shift suggests more companies are thinking about cost earlier in the planning process, though the survey doesn’t show whether that actually leads to fewer overruns.
Cloud migration cost governance practices
Flexera’s 2026 survey shows that organisations are taking a more structured approach to cloud cost management. Cloud Centres of Excellence provide central oversight, FinOps teams bring financial and technical decision-making together, and unit economics help organisations track what individual services actually cost.
These practices do not prove that organisations have solved cloud waste or budget overruns, especially since estimated wasted spend also increased. They do show that cost management is becoming an ongoing discipline rather than something organisations address only after spending has drifted off course.
The table below shows how widely these practices were adopted in 2026.
| Practice | Figure | Source |
| Operating a Cloud Centre of Excellence* | 71% of respondents’ organisations operated a Cloud Centre of Excellence. | Flexera, 2026 |
| Dedicated FinOps team in place | 63% of respondents’ organisations had a dedicated FinOps team in place. | Flexera, 2026 |
| Using unit economics to track cost per service | 49% of respondents’ organisations used unit economics to track cost per service, up from 40% the year before. | Flexera, 2026 |
*Flexera sells cloud cost management tools, so this is vendor-sponsored research.
The data can’t tell us whether these programmes are reducing waste, haven’t had enough time to work yet, or are just more common at companies with the most complicated cloud setups to begin with. Either way, the survey shows that wider use of cloud cost controls has not eliminated the problem of wasted spending.
Cloud investment and enterprise value
Deloitte studied more than 4,500 companies and found that cloud investment was linked to about three times the increase in company value, compared to cybersecurity investment alone, over a three-year period. In the short term, that link was about twice as strong. * This is a pattern found in company financial filings, not a calculated return on migration spending, and it doesn’t prove that cloud investment caused companies to become more valuable.
The table below shows the pattern Deloitte found between steady cloud investment and company value.
| Time horizon | Figure | Source |
| Long-term (3 years)* | Cloud investment was linked to about three times the long-term increase in company value, compared to cybersecurity investment alone. | Deloitte, 2023 |
| Immediate (short-term)* | Cloud investment was linked to about twice the short-term increase in company value, compared to cybersecurity investment alone. | Deloitte, 2023 |
*This is the most recent public Deloitte figure on this topic. It comes from a 10-year analysis of company financial statements, published in 2023, and hasn’t been updated since. It shows a pattern, not a measured or guaranteed return.
Cloud had the strongest association with company value among the technologies Deloitte studied. However, the research doesn’t show that every migration creates value or that one approach performs better than another.
Conclusion
The data does not point to a single cause of cloud migration difficulty. Application dependencies, cost forecasting gaps, and coordination failures each contribute independently, and the research shows they tend to compound when organisations move forward without resolving them first. Wider adoption of FinOps teams and Cloud Centres of Excellence reflects a growing recognition that cloud cost management requires ongoing discipline, not a one-time fix. The 29% wasted spend figure rising for the first time in five years suggests that even organisations with mature governance practices are still finding cloud costs harder to predict than expected.
To learn more or request a cloud migration cost assessment, please reach out here.
Sources
Gartner (2024). Gartner Forecasts Worldwide Public Cloud End-User Spending to Total $723 Billion in 2025. https://www.gartner.com/en/newsroom/press-releases/2024-11-19-gartner-forecasts-worldwide-public-cloud-end-user-spending-to-total-723-billion-dollars-in-2025
Gartner (2025). Forecast: Public Cloud Services, Worldwide, 2023-2029, 3Q25 Update. https://www.gartner.com/en/documents/6996966
Flexera (2026). 2026 State of the Cloud Report: The convergence of cloud and value. https://www.flexera.com/blog/finops/flexera-2026-state-of-the-cloud-report-the-convergence-of-cloud-and-value/
McKinsey (2021). Cloud-migration opportunity: Business value grows, but missteps abound. https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/cloud-migration-opportunity-business-value-grows-but-missteps-abound
Deloitte (2023). Driving enterprise value with a three-dimensional tech strategy, enabled by cloud. https://www.deloitte.com/global/en/services/consulting/perspectives/tech-enabled-enterprise-value.html
