Many organizations move to the cloud assuming that costs will automatically go down, but the data shows that isn’t guaranteed.

The core issue is “lift and shift” without preparation. When companies do a direct, like‑for‑like migration of existing workloads—often called direct-match or lift and shift—they frequently move all their existing inefficiencies into the cloud.

According to an analysis of more than 60,000 workloads by Bain & Company and AWS:

• Poorly planned direct-match migrations can be 10%–15% more expensive than keeping workloads on‑premise.
• 84% of on‑premise workloads are overprovisioned, meaning excess compute and storage capacity is being paid for but not used.

When that overprovisioned capacity is moved as‑is to the cloud, companies simply “rehost” waste instead of improving efficiency. Not surprisingly, when more than 350 IT decision makers were surveyed, their top disappointment with cloud deployment was that total cost of ownership did not decline as expected.

In short, cloud migration doesn’t automatically save money. Without rightsizing and careful planning, it can actually increase costs.

Rightsizing is the process of adjusting workloads to match actual usage and business needs before or during migration to the cloud. Instead of copying your current environment one‑for‑one, you:

• Eliminate unused or “zombie” servers that are no longer needed.
• Shut down unnecessary activities and duplicate environments.
• Resize compute, storage, and core counts based on real utilization patterns.
• Use burstable instances or reserved excess capacity to handle peak demand instead of overprovisioning all the time.

Why it matters for costs:
Data from AWS Migration Evaluator and Bain & Company shows that companies that rightsize can:

• Cut migration-related costs by about 30%–60% compared with a direct-match move.
• Turn a potential cost increase into savings. For example, a direct-match migration of 105,000 server instances and 20 TB of storage was modeled to increase costs by 22%, while rightsizing the same workloads would reduce costs by 36%.

One real-world example is Morningstar, the financial research firm. By working with AWS Migration Evaluator to rightsize its workloads instead of simply renewing data-center contracts or lifting and shifting, Morningstar found that the majority of its instances would cost about 30% less in the cloud.

Beyond cost, rightsizing helps companies reimagine how they operate—consolidating fragmented workloads, updating incomplete records, and building a more flexible mix of public, private, and hybrid cloud models.

Not all workloads respond the same way to cloud migration. Rightsizing helps you focus on where the economics are most attractive.

1. Nonproduction workloads
Companies are often more likely to save when they migrate nonproduction workloads (such as development, testing, and staging) because:

• Usage is more volatile, so these workloads benefit more from the cloud’s flexibility.
• They can help reduce software licensing fees tied to core processor counts, especially when you rationalize and downsize cores.

2. Nonvirtualized workloads
Nonvirtualized environments typically gain more from cloud migration than already virtualized ones, because virtualization has already delivered some of the efficiency and flexibility that the cloud provides. Moving nonvirtualized workloads gives you more room to:

• Consolidate servers and storage.
• Eliminate overprovisioning and zombie servers.
• Align capacity more closely with actual demand.

3. Workloads with transferable licenses
Organizations that hold existing Microsoft SQL or similar licenses that can be migrated to the cloud often see the highest savings, since they avoid repurchasing licenses and can still rightsize infrastructure underneath.

For CIOs and IT leaders, the practical takeaway is to:

• Start with a data-driven assessment of current usage (for example, using tools like AWS Migration Evaluator).
• Prioritize nonproduction, nonvirtualized workloads and those with transferable licenses.
• Use migration as a chance to rethink capacity planning, not just relocate it.

This approach helps you capture the financial upside of the cloud while building a more manageable hybrid environment over time.