How to create an enterprise cloud security budget

Define security requirements and objectives

Conduct a thorough risk assessment to understand the organization's specific cloud security needs. Identify critical data, applications and infrastructure that must be protected, as well as any regulatory requirements to address.

Set clear, actionable objectives that align with business goals -- for example, reducing exposure to ransomware or achieving compliance with a specific regulation. This clarity helps prioritize spending and demonstrates alignment with broader organizational strategy.

Identify key cybersecurity technology and tools needed

Once requirements and objectives are outlined and agreed upon, identify and categorize security components and categories where cloud security services and controls are needed.

Break down security by category to ensure all essential areas are covered. Use frameworks, such as the NIST Cybersecurity Framework, to determine protection requirements. Common security categories include the following:

• Identity and access management. Assess IAM tools, such as single sign-on, MFA, and identity governance and administration. In some cases, these controls are jointly governed by security and other teams, particularly identity-as-a-service tools that cover end-user and application federation.
• Data protection. Consider encryption, backup, and data loss prevention and classification tools and services.
• Threat detection and monitoring. Evaluate tools or platforms, including cloud-centric SIEM systems, endpoint protection offerings that align with cloud workloads -- such as a cloud-native application protection platform (CNAPP) -- and vulnerability assessment tools.
• Compliance and risk management. Assess tools to track cloud configuration posture and controls status, compliance reporting, risk assessments and audits.
• Incident response and recovery. Evaluate cloud incident response tools and services for logging, alerting and responding to security incidents in the cloud, both with cloud-native capabilities and newer options, such as cloud detection and response tools.
• Training and awareness. Include budget for user and engineering education on cloud security best practices.

Break down costs of these security systems

Next, estimate costs by category. Research or consult with providers to gather cost estimates for options that align with the organization's size, industry and risk profile.

Take into account licenses and subscriptions, as well as implementation and configuration costs, for each tool or service, including in-house operational time, ongoing maintenance and support costs, and any training offerings. Try to push providers to bundle trainings in with any licensing agreements, if possible.

During this step, consider opportunities to cut down on potential cloud security costs by using security features already built into leading cloud platforms. For example, leading IaaS providers, including AWS and Microsoft, provide automatic full-disk encryption for workloads at no additional cost.

Automation for cloud monitoring, compliance and threat detection via tools such as cloud security posture management (CSPM) can also help save budget by reducing reliance on manual operations and tasks. Using managed security service providers for certain security functions could also reduce costs and improve efficiency in some cases -- especially for smaller and leaner teams.

To aid with cloud security budgeting, develop a justification for each budget category. Examples include the following:

• Risk reduction. Clearly connect each expenditure to the risks it mitigates -- for example, "Investing in IAM reduces the risk of unauthorized access and potential breaches."
• Compliance requirements. Emphasize the cost of fines, reputational damage and operational disruptions if regulatory requirements aren't met.
• Cost of inaction. Describe the potential financial impact of a cyberattack or breach, referencing industry data on average costs of incidents in similar sectors.
• Business enablement. Highlight how security investments enable faster product development, improve secure data collaboration and help build trust with customers, directly supporting business growth.

Where possible, try to forecast future needs, which include scalability considerations and future-proofing. Plan for scalability by including estimates of how costs might change as cloud deployments grow, new services are used or new threats emerge.

Present cloud security budget requirements to senior stakeholders

Finally, justify the budget to senior leadership and stakeholders. Helpful tips include the following:

• Simplify the presentation with key business concerns. Board members and executives are most concerned about risks to the organization, legal and regulatory compliance, and reputation protection. Frame the budget in terms of how it mitigates these risks and include security KPIs where relevant. Emphasize how investing in cloud security protects and enhances business value, enables continued growth, and improves customer trust and operational reliability.
• Provide clear, real-world examples. Reference incidents where lack of cloud security affected organizations in the industry. Use these examples to underscore the need for each budget line item.
• Include visuals and scenarios. Present scenarios comparing the potential costs of a breach versus the proposed budget for mitigation. Use visual aids to show how the budget aligns with identified risks and projected cost savings.

For most organizations, critical cloud security capabilities include CSPM, cloud monitoring and event management, threat management, data security controls, and IAM services and controls. Organizations with flexible budgets should consider tools such as CNAPPs -- though these are often "need to have" budget items with multi-cloud deployments.

Dave Shackleford is founder and principal consultant at Voodoo Security, as well as a SANS analyst, instructor and course author, and GIAC technical director.