Most mid-market leaders move fast to the cloud. On paper, it seemed like a win, with lower upfront spend, shorter timelines, and visible progress. A lift-and-shift migration makes that possible. It gets you out of the data center, into Azure, and lets you reassure your board that transformation is underway.
But if you’ve been watching the bills since then, you know the numbers don’t line up with the promise. In 2025, 83% of CIOs admitted they overspent their cloud forecasts by nearly 30% on average.
More than half of the companies said their costs came in higher than expected. And when workloads are moved “as-is,” about one-third of that spend ends up wasted on idle or oversized capacity.
The issue is stopping at a simple lift-and-shift (rehosting). When you carry old sizing and operating habits into Azure unchanged, you incur hidden costs, and about a third of your spend goes to idle or oversized capacity. You also invite “shift-and-drift,” which drives 40% higher ongoing operating costs compared to teams that adopt cloud-native practices.
In this edition, I’ll show you why migrations look efficient upfront but become expensive to run, what to look for in your environment, and where to act next.
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Lift-and-shift saves money because it’s cheaper upfront
What leaders believe
Rehosting is the fastest and most affordable way to move. You avoid retraining teams, keep the migration budget lean, and show the board a quick win.
What actually happens
Those savings are temporary. Workloads that move “as-is” don’t scale elastically, don’t take advantage of managed services, and often inherit the inefficiencies of the old environment. IDC found that lift-and-shift workloads often end up 30% more expensive than staying on-prem if they’re not modernized.
Faced with that math, some leaders even consider moving workloads back. Gartner’s research argues the widely claimed “repatriation wave” is a myth and advises fixing troubled cloud projects rather than reversing them.
And in practice, any move-back means a second migration, tighter pull from data gravity, and downtime risk, costs that tend to erase expected savings. In short, you can end up paying twice.
So what can you do about it?
- Look at the cost curve over time and the migration invoice. Forrester found that companies modernizing apps with Azure PaaS cut infrastructure costs by nearly 40% and earned a 228% ROI over three years.
- Even re-architecting one or two high-value apps during migration can deliver faster payback and keep long-term spend lean.
The upfront bill may rise, but it’s often the only way to avoid locking in waste and the last thing you want is explaining to your board why “reversing to on-prem” is even on the table.
Operational waste grows after the migration
What leaders believe
Once the migration is complete, the big expense is behind you. The cloud bill may rise, but it should mostly reflect healthy growth in usage.
What actually happens
Costs drift in ways you may not anticipate. One SaaS provider we worked with initially assumed that storage and compute were the primary drivers, but the real surprise came from data egress, as analytics pipelines moving terabytes across regions pushed transfer fees into six figures within the first year.
Flexera’s survey backs this up, showing mid-market firms waste about 27% of their cloud spend on overlooked items like transfers, oversized VMs, and idle storage. Left unchecked, these “small” inefficiencies compound into a permanent tax.
So what can you do about it?
- Embed optimization into the migration plan. Run a usage and transfer audit within the first 90 days. Right-size aggressively, downgrade storage tiers, and put TTL policies on non-production resources.
- Model your egress costs explicitly; assume that every pipeline that moves data across regions incurs a bill.
- And invest in cloud-native security controls early; the spend looks higher at first, but the downside of a breach is far more expensive.
Innovation takes a back seat to cost control
What leaders believe
Once everything runs on Azure, innovation will follow. Rehosting buys time; you can modernize when the roadmap eases up.
What actually happens
Without cost discipline, most of your cloud budget goes to “keeping the lights on,” instead of building new value. It happens when there’s no formal FinOps. As of 2025, only 59% report having a dedicated FinOps team, leaving 41% without clear cost governance. Without structured ownership, cloud budgets settle into maintenance.
Case in point: Rockler (US specialty retailer) implemented Dynamics 365 Commerce on Azure, instead of nursing an aging stack. As a result, their support tickets reduced to 68%, lifting store-ops efficiency 26%, and increasing sales revenue.
So what can you do about it?
Stand up FinOps as a cross-functional habit. Hold monthly reviews between finance and engineering, assign cost ownership, and treat small wins like tagging accuracy or rogue cluster alerts as your early indicators.
Lift-and-shift is not always a mistake. It works when the workload is low, changes are low, and there is a clear end state, such as retire, replacement with SaaS, or replatforming. The trap is letting rehosted patterns live forever. Timebox them, measure their run-rate, and decide upfront what must be modernized now versus later.
If you want a pragmatic way to decide which workloads qualify for “rehost now, modernize next” and which need deeper changes on day one, see how we structure that assessment and funding.
