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Organizing and Managing Government Cloud Costs at Scale

10 min read

Last updated on June 8th, 2023 at 10:37pm

Like their corporate counterparts, government agencies have become aware of the cloud’s benefits. Cloud technologies help federal and civilian agencies to better serve the public by making their services flexible, scalable, and highly available. And for governmental offices, the cloud offers improved IT development, streamlined operations, and reduced computing infrastructure costs.

But while the cloud creates opportunities for government agencies to expedite internal and external services, managing their cloud costs is challenging. A lack of visibility into resource consumption, challenges with data sovereignty, and improper resource management can balloon costs in the blink of an eye.

Because government organizations are often working with stringent budgets, it’s crucial for agencies to keep cloud costs low and transparently dispersed. Agencies can face significant consequences if they don’t closely track spending to ensure funds are spent in specific, approved ways.

So how can government agencies collect those sweet cloud benefits without breaking the (national) bank? Read on to find out.

Government Cloud Cost Management: Challenges and Considerations

Every business using the cloud is concerned with keeping costs low. But for government agencies, the stakes for effectively managing cloud costs are high. Besides the typical concern for costs and using resources effectively, government organizations must also account for the following considerations.

Compliance and security requirements — Government agencies must comply with ultra-strict security requirements — especially for cloud computing. Examples of a transparent set of standards and processing for cloud computing include:

While unquestionably important, these compliance requirements can create additional work for government organizations that use the cloud. You must monitor, report on, and audit for compliance. Remember, these security requirements aren’t just guidelines. It’s a matter of the law.

Budget restraints — As part of the public sector, government organizations generally have extremely limited budgets, making optimizing cloud costs non-negotiable. And these budgets, much like security requirements, are legally enforceable. For example, the Antideficiency Act (ADA) guides government cloud usage today.

Cloud costs often swell because it’s relatively easy to create cloud accounts and provision resources. Without the proper alignment to funding commitments, this flexibility puts agencies and personnel at risk of violating the ADA. For government agencies, bigger isn’t always better. Big missions? Yes. Big cloud spending? No.

Data sovereignty — It’s not just people that are governed by national rules and regulations. Data is, too. Data sovereignty describes the rules that govern data collection and storage. When government bodies work with data, they’re subject to rules that outline the geographical locations where they can collect and store data. For example, data collected in California is subject to the California Consumer Privacy Act (CCPA).

Because these rules apply regardless of where the cloud service provider physically stores the data, government organizations need to read the fine print and be familiar with local data sovereignty laws to ensure compliance.

Best Practices for Government Cloud Cost Optimization and FinOps

At this point, it’s clear that government organizations have numerous boxes they need to check when using cloud computing. Top-tier security measures? Check! Limited budgets? Check! A critical need for transparency about spending? Check!

The unique restraints and requirements that government agencies face mean that optimizing cloud costs is paramount. But how do you actually achieve this goal?

For government agencies working at scale, optimization requires IT, FinOps, and development teams to work closely together to pinch pennies, monitor resource consumption, and stick to those budgets.

While that may sound easier said than done, it doesn't have to be an arduous task. Managing cloud costs is simpler to do when you follow the tips below.

Implement Cost Allocation Tags

Cost allocation and resource tags are your first line of defense against sky-high cloud costs. When you tag resources — a feature that all major cloud service providers offer — you can track all activities related to a specific resource, from provisioning to usage, deprovisioning, and anything in between.

With tags assigned to each resource, you can link these resources to specific users — individual developers, project teams, or even full agencies — to easily track who is using what resource. With this information, it’s significantly simpler to understand what’s increasing cloud costs, take action against overconsumption, and maintain the financial transparency that’s expected (or required) of government organizations.

Tags and labels can be used to track costs across cloud accounts.

Establish Budget Policies

Saying, “You need to establish budget policies” might seem obvious — especially when budgeting is a foundational requirement for government organizations. Tell us something we don’t know, right? But it really is a crucial step in managing cloud costs, and it should be done at a team level, not just an organizational one. Give budgets to every level of your agency: individual teams, specific projects, and full departments.

“When teams clearly understand their specific budgets, they’re better equipped to manage spending. It also helps to reiterate the importance of budgeting and keep it relevant to each employee.”

But budget policies can’t just be set. They have to be followed. To prevent overspending within your government agency, you need to enforce budgets where spending happens. Individual employees and teams can significantly and directly impact cloud costs. Government organizations need to be prepared to enforce financial compliance without much wiggle room. Remember, these spending rules aren’t meant to be broken.

Monitor Usage Patterns

Budget policies aren’t helpful if you can’t enforce them. We’ve just discussed how important enforcing budget policies are — but how do you actually do that?

One of the best ways is monitoring usage patterns. While government organizations should expect variations in cloud resource use over time, often due to variable resource demands in applications and the ability to easily provision new resources, looking at resource use holistically can help you identify trends, ineffective resource use, and areas for optimization.

Monitoring usage patterns helps government organizations identify if particular teams consistently use more resources than they should. It can also identify “zombie” instances due to legacy workloads that weren’t properly shut down. When you monitor resource use, you increase spending transparency and bolster in-organization accountability. You can also more easily identify how to optimize resource consumption to mitigate high cloud costs proactively, not just reactively.

Getting Started with Government Cloud Cost Management

Cloud cost management in the government can be complex. It requires careful planning and transparency — both within the government agency and with the larger governing body. Besides budget and compliance regulations, government agencies must report and audit costs such as chargebacks and showbacks.

It’s a lot to take in, and for government agencies, the stakes are high. By using the following steps, getting started with cloud cost management can be as easy as A.B.C.

Step One: Assess Your Current Cloud Environment

Know where you’re at by assessing your current cloud environment. Start by reviewing your existing cloud resources, accounts, and billing to understand your current cloud landscape and costs. During this stage, you’ll want to check tags and resource consumption patterns to inventory who uses which cloud resources and what they’re spending.

Step Two: Develop a Cost Management Strategy

With this bird's eye view of current cloud spending, government organizations can develop a cost management strategy. This strategy should include both short- and long-term objectives to prioritize cost optimization and outline your goals, targets, and guidelines for cloud cost management.

Once you have prepared this strategy, it needs to be visible. All employees need to know what the budget is — especially at a team level — to gain organization-wide support for this strategy. Reviewing your strategy is also essential to establish shared responsibility between IT and FinOps teams, making cost management an organization-wide affair.

Step Three: Establish Roles and Responsibilities

In addition to amplifying the cost management strategy and its importance, you need to establish exactly who is responsible for enforcing budgets and ensuring everyone follows the strategy. Assign key stakeholders to take ownership of cloud cost management. This way, teams know who to turn to with questions or concerns, and your government agency maintains transparency and accountability for the cost management process.

Step Four: Educate and Train Your Team

Cloud cost optimization is everyone’s responsibility. Everyone within your organization needs to understand how they impact cloud costs. Government agencies should train all employees on cloud cost management best practices and tools to keep costs low. Doing so ensures teams have the knowledge and skills they need to work together to manage costs effectively. Don’t assume these practices are innate or too obvious to be reviewed. Assumption can equal resource overconsumption.

Kion: Your Solution for Managing Government Cloud Costs at Scale

Throughout this article, we’ve highlighted the challenges that government organizations face when working in the cloud. There’s a limited budget, you have strict data requirements, and maintaining visibility about where money is going is simply non-negotiable. With so much on the line, it helps to enlist some support.

Kion helps government organizations manage cloud costs at scale. Its single-platform approach offers organization-wide visibility of your entire cloud infrastructure. This means tracking cloud costs, accounting for them, and auditing spending is easy, as you’re not interrogating various platforms for information.

The Kion platform also offers integrated real-time financial management tools to help government agencies manage cloud finances. Government agencies can easily control cloud costs with these Kion features:

  • Unified reporting across accounts — To analyze costs and identify areas for optimization, you need a single, granular, and holistic overview of your cloud resource consumption. Government organizations shouldn’t be playing hide and seek with their costs. Kion eliminates this struggle by consolidating all cost data from multiple cloud accounts and across cloud providers, making it easy for government organizations working at scale to track spending and determine where the money is going. Additionally, Kion’s visualization tools make it easier to analyze spending patterns and identify savings opportunities.
  • Automated budget enforcement — Kion automates budget enforcement and monitors spending so government agencies can stay within budget. You can set budget limits within Kion’s platform — both at an organization and team/department level — and send visual alerts to responsible parties about their compliance with this budget. Additionally, you can configure Kion to take automated steps to maintain budgets, ranging from alerting to shutting down an instance or triggering requests for additional funding.
  • Proactive identification of savings opportunities — Your cloud spending picture can change rapidly, so it’s crucial to be proactive. Kion constantly monitors cloud resource usage and identifies optimization opportunities, such as rightsizing instances or using cost-effective storage options. With Kion, government agencies can course-correct before costs impact — or violate — the budget.


Government agencies, like other businesses using the cloud, want to keep cloud costs low. But unlike other organizations, government agencies can’t have cost management as just a goal. For government organizations, cost management is non-negotiable. They must adhere to legally-binding budget restrictions and strict compliance regulations, making cloud cost management a complex task.

To keep cloud costs low, government organizations working at scale need a granular, holistic view of cloud resource consumption — and all expenses related to cloud use. Every dollar needs to be accounted for, tracked, and auditable. Kion’s platform helps gather and analyze information, supporting cost optimization and compliance with audits, regulatory bodies, and budget requirements.

Check out our financial management page to learn how Kion can change the game for government organizations looking to manage cloud costs.

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