Common Cloud Cost Mistakes: How a Simple Networking Misconfiguration Cost $350K

Welcome to the first edition of Common Cloud Cost Mistakes, a series where we explore real-life stories of costly cloud misconfigurations and the lessons learned. Cloud adoption has transformed how companies build and scale applications, but with great flexibility comes great financial risk. A single overlooked setting can lead to six-figure mistakes.

In this issue, I’ll share a real experience from working with a Silicon Valley startup valued in the tens of billions. They had a strong technical foundation, but a small misconfiguration in AWS networking led to a staggering $350,000 cloud bill before anyone noticed.

Let’s dive into what happened, why it went wrong, and how FinOps best practices could have prevented it.

A $25K Per Day Oversight

This startup built a monolithic Python-based SaaS application, running in Kubernetes at a massive scale. They had 1,200 engineers, but no dedicated QA team—they believed unit testing was enough. Every pull request (PR) triggered an extensive CI/CD pipeline in Jenkins, running on three 1,000-node Kubernetes clusters to keep up with their rapid deployment cycles.

The infrastructure, however, was mostly built through manual ‘ClickOps’ configurations. Over time, they began importing their AWS resources into Terraform to introduce governance and consistency.

One of their senior engineers was tasked with importing network configurations into Terraform state. During this process, he struggled to fully import an S3 VPC endpoint due to the complexity of the existing Terraform module. Instead of troubleshooting further, he decided to delete and recreate the VPC endpoint—a seemingly quick and harmless fix.

What could go wrong?

In the lower environments, he tested the changes. The application remained fully functional, and no issues were observed. Confident in the results, he proceeded to apply the same changes in production.

Everything seemed fine. The application remained stable, and no immediate issues surfaced.

But then, 15 days later, a shocking discovery was made. The AWS bill had increased by $25,000 per day—an unaccounted cost surge totaling $350,000 before it was caught.

The root cause? When the VPC endpoint was recreated, the endpoint policies were not reapplied, meaning all S3 traffic—previously routed securely via AWS’ internal backbone—was now traversing the public internet. The massive volume of data transfers resulted in exorbitant egress charges that went completely unnoticed.

This cost mistake was not caught earlier due to two key gaps:

• Lack of monitoring alerts for cost anomalies—No automated checks were in place to detect unexpected spending increases.
• Limited infrastructure testing—Only application functionality was tested; network and cost impact were ignored.

Lessons Learned: How to Avoid This Costly Mistake

This case highlights a critical flaw in cloud cost governance—without proper processes, testing, and cost visibility, even small changes can lead to enormous financial waste.

Here’s how FinOps best practices could have prevented this:

? Automate Cost Anomaly Detection

• Implement AWS Cost Anomaly Detection or a FinOps dashboard to flag unexpected cost spikes in real-time.
• Set budgets and alerts for sudden increases in data transfer costs.

? Infrastructure as Code (IaC) Governance

• Avoid manual ‘ClickOps’—always test Terraform changes in lower environments with full parity to production.
• Implement policy-as-code tools (e.g., Open Policy Agent, AWS SCPs) to enforce networking policies automatically.

? Networking Cost Awareness

• Teams must understand data transfer costs, especially when working with VPC endpoints and S3.
• Establish pre-change cost impact assessments as part of infrastructure change management.

? End-to-End Testing for Infrastructure Changes

• Infrastructure modifications should go through a staging validation process, ensuring that networking and security configurations are preserved.
• QA is not just for applications—infrastructure changes require validation too.

This story underscores a fundamental truth about cloud cost management: It’s not just about optimizing instances and storage—it’s about preventing misconfigurations before they happen.

With FinOps principles, organizations can bridge the gap between engineering, finance, and operations to ensure that cost efficiency is part of every decision.

In the next edition, we’ll explore another costly cloud mistake—one involving autoscaling gone wrong. Stay tuned!

What do you think? Have you ever experienced a cloud cost surprise? Drop your thoughts in the comments!

? Erol