How to Calculate Cloud Security ROI

Cloud migration requires new security strategies, practices, and tools compared to protecting traditional on-premises infrastructure. To budget for your migration, you must consider cloud security cost analysis and how much you’ll spend protecting the new network. Calculating the return on investment (ROI) for cloud security is essential for organizations wanting to justify their spending and maximize the value received.

Measuring cloud security ROI shows the effectiveness of your strategy, enabling you to optimize security spending while maintaining protections. However, there are challenges to ensuring an accurate calculation. To learn how to calculate cloud security ROI, you must track costs, benefits, and cloud security metrics, many of which are difficult to quantify.

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Why ROI for Cloud Security Matters

Cloud security ROI measures the return on investment from cloud security spending. This can include tools, processes, staff, and any other associated costs. Investments in security infrastructure will increase your overall costs when migrating to the cloud.

As with any spending, you need to demonstrate that it brings value to the business. Proving to key stakeholders within the organization that cloud security benefits outweigh the required outlay and deliver the level of protection your cloud workloads require.

Data from the Check Point Cloud Security Report 2025 shows a surge in cloud migration and security incidents in the past year:

62% of organizations expanded their cloud edge technologies
57% grew their hybrid cloud environments
65% experienced a cloud security incident

As both cloud migration and attacks continue to grow, robust cloud security is vital to protecting your sensitive data and maintaining business operations. A single successful attack can have significant consequences with remediation costs, operational disruptions, non-compliance fines, and reputational damage, leading to lost opportunities.

Learning how to calculate cloud security ROI and highlighting the value it offers helps ensure adequate protection, and reframes the discussion around security budgets. Shifting the perspective from cybersecurity as a cost center to a business enabler that prevents much larger outlays and opportunity costs. It translates reducing security risk into financial returns, connecting cloud security metrics (e.g., number of incidents, time to detection) to tangible economic benefits.

Additionally, not all security investments deliver equal value. By following an ROI calculation framework and tracking cloud security metrics across your network, you can assess the effectiveness of your approach and find areas for improvement. This includes maximizing cloud security ROI through smarter, data-driven adjustments to cloud security strategy. For example, identifying the best possible cloud security tools that deliver the most cost savings and risk reduction.

Key Factors Impacting Cloud Security ROI

Calculating cloud security ROI is a simple formula defining the ratio of the net benefits (Total Benefits – Total Costs) to the total costs. This fraction is then multiplied by 100 to be expressed as a percentage.

ROI = (Total Benefits – Total Costs) ÷ Total Costs × 100

Assuming the total benefits, in terms of monetary value, are larger than the total costs, the investment will have a positive return. However, while this equation is simple, finding accurate values for the key factors (benefits and costs) impacting cloud security ROI is no easy task.

The inherent nature of cybersecurity makes quantifying cloud security ROI challenging. While you can calculate direct costs and benefits, such as licensing fees or time saved from using a specific cloud security tool, there are also many indirect components at play.

Most notably, reducing the number of security incidents and their resulting fallout. This value is tied to preventing an incident that never actually occurs, which is not something that has a specific income or cost savings associated with it. Cloud security investments don’t necessarily bring in revenue, but they do block attacks and create safe conditions to enable business operations that do.

When a cloud firewall blocks a malware attack or an identity management system prevents unauthorized access, the organization avoids losses. However, to assign a monetary value to an avoided security incident requires extensive cloud security cost analysis based on industry knowledge, educated assumptions, and tracking cloud security metrics.

To better understand cloud security investment values, organizations should break down both costs and benefits into their direct and indirect components:

Direct Costs: These are the tangible, upfront expenses tied to cloud security. They include software licensing fees, professional services, and staffing for security operations. Direct costs are the easiest to measure in an ROI calculation framework since they appear clearly in budgets and invoices.
Indirect Costs: Hidden or secondary expenses that arise from implementing and maintaining cloud security infrastructure and processes. Examples include the time staff spend on integration and training, or potential productivity drops during rollout. Indirect costs are harder to quantify but have a significant impact on the total cost of ownership.
Direct Benefits: These are measurable outcomes directly tied to security improvements. Examples include reduced compliance fines, downtime due to fewer breaches, and lower incident response costs. These benefits are easier to translate into dollar values and are central to measuring cloud security ROI.
Indirect Benefits: Less obvious, but equally important, are the intangible advantages of strong cloud security. These include enhanced customer trust, improved brand reputation, higher employee confidence in secure systems, and greater agility in adopting new cloud services. While difficult to quantify, these benefits often contribute the most to long-term cloud security investment value.

Measuring Cloud Security Costs and Benefits

Identify All Cloud Security Costs

To learn how to calculate cloud security ROI, you need to start with a clear understanding of costs. This includes outlays on direct costs such as:

Cloud-native security tools (CASB, CSPM, CWPP, SIEM/SOAR, IAM, etc.)
Licensing fees for security software
Professional services
Salaries for security teams
Staff training programs

It also includes indirect costs such as integration challenges or productivity losses during the rollout of the new security strategy. A complete cloud security cost analysis should account for both types of costs.

However, it should also consider that in many cases, cloud security replaces previous protections. Your old security strategy was not free. Therefore, you must factor in a comparison between your previous security costs and your new spending to understand the actual change in expenditures while enabling new cloud-based workflows. If the benefits of these cloud environments outweigh the additional costs of the infrastructure and security controls, it remains a positive investment.

Define and Quantify the Benefits

Unlike costs, benefits are often more complex to define because they reflect avoided losses or intangible gains. Examples of benefits include:

Avoided Breach Costs: Reduced likelihood and impact of breaches due to faster threat detection and response. This stops attacks and limits the impacts of any attacks that slip through your initial defenses.
Compliance Savings: Strong security practices lower the risk of regulatory fines (GDPR, HIPAA, PCI-DSS) and improve audit readiness. Additionally, many clients won’t consider working with clients unless they are regulatory compliant, for example, ISO 27001 or SOC 2. This means cloud security spending can directly enable new business opportunities.
Operational Efficiency: Cloud security automation reduces repetitive security tasks, freeing teams to focus on higher-value work. This efficiency translates into measurable time savings, reduced staffing pressure, and improved scalability.
Business Continuity: Strong cloud security reduces downtime during attacks, protecting revenue and ensuring reliable customer experiences.

Use Cloud Security Metrics to Validate ROI

Critical tools that help calculate benefits and costs, validating ROI calculations, are cloud security metrics. By tracking performance improvements with these metrics and translating improvements into financial benefits, you can get a more accurate measure of cloud security ROI.

To achieve this, you should:

Establish Baseline Cloud Security Metrics: Track performance through key cloud security metrics such as the frequency of security incidents, compliance violations, and detection/response times.
Track These Metrics to Identify Improvements: For example, reductions in the Mean Time to Detect (MTTD) threats and how that translates to fewer security incidents or compliance violations.
Translate Improvements into Financial Returns: Improvements in key cloud security metrics can be linked to business value in order to better track indirect costs and benefits and improve the quality of your ROI calculation.

By aligning ROI calculations with hard metrics, you can move beyond theoretical estimates and demonstrate clear, measurable improvements in cloud security investment value.

Maximize Cloud Security ROI with Check Point

Learning how to calculate cloud security ROI accurately is vital to demonstrating the value it brings to your organization. With meaningful cloud security metrics, you can accurately determine ROI and prove that cloud security is a business driver, not a cost center.

There are many best practices that help maximize cloud security ROI. From aligning investments with business goals to automating wherever possible and integrating cloud security tools into a comprehensive platform such as CloudGuard.

Check Point’s prevention-first cloud security solution consolidates everything you need to protect diverse cloud environments into a single platform and subscription. This significantly simplifies cloud security deployments and offers cost savings compared to combining and integrating a series of point solutions. Plus, CloudGuard’s network firewalls provide industry-leading protection according to independent tests, ranking number 1 in threat prevention with a 99.9% block rate.

Try CloudGuard for yourself with a free trial and discover how maximum protection leads to maximizing cloud security ROI.