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Unexpected Cloud Storage Costs

Surprising Expenses Catch Many Off Guard When Transitioning to Cloud Storage

The transition to cloud storage has led to unforeseen expenses for a significant number of organizations, with a trend towards migrating more data than initially planned. This is especially true for businesses that embraced cloud storage solutions over the past two years, facing hidden costs related to the expansion of storage capacity, egress fees, and charges for API calls. The Wasabi 2024 global cloud storage index, based on a survey of 1,200 IT decision-makers from companies with over 100 employees, reveals these insights and more.

Key Findings

  • Over half (53%) of the surveyed decision-makers reported exceeding their allocated budget for cloud storage, mainly due to higher-than-expected storage usage (42%) and the migration of additional apps and data (45%).
  • A striking 72% of organizations new to cloud storage in the last two years reported budget overruns, attributing these to increased storage consumption, unexpected egress fees, and API call charges.
  • Despite these challenges, 93% of organizations intend to expand their public cloud storage capacity in 2024, a 9% increase from the previous year. Additionally, 90% anticipate higher budgets for cloud storage, driven by the need for enhanced data security, backup, and recovery solutions.
  • The survey also highlights that 47% of cloud storage expenses are related to data and usage fees, maintaining the previous year’s figures.
  • The adoption of a “cloud-first” strategy has risen to 42% among the surveyed organizations in 2024.

AI/ML Adoption and Its Impact

  • The adoption of AI and machine learning (AI/ML) technologies is a significant driver of cloud storage growth, with 99% of respondents planning or already implementing these solutions.
  • Challenges are anticipated by 49% of respondents regarding AI/ML workloads, especially concerning the necessity to store data across diverse locations, including edge computing, core data centers, and cloud environments.
  • Generative AI leads the planned or current AI workload adoption (49%), followed by AI/ML solutions for security and compliance (45%) and product design (39%).
  • Concerns related to storage for AI/ML applications are recognized by 97% of the organizations surveyed.

This comprehensive report underscores the growing reliance on cloud storage, the challenges of managing costs, and the significant role of AI/ML technologies in shaping future storage requirements.

Cloud Repatriation: Bringing Costs Back Down to Earth

Cloud computing offers undeniable advantages, but sometimes the costs balloon beyond expectations. This is where cloud repatriation comes in. It’s the process of moving applications and data back from the cloud to your own on-premise infrastructure. While it might seem like a step backward, repatriation can be a budget-friendly strategy for several reasons:

  • Reduced Cloud Service Fees: Public cloud providers charge for resources you use. By repatriating underutilized applications, you eliminate ongoing fees associated with storage, compute power, and other services.
  • Optimized Licensing Costs: Cloud-based software licenses can be expensive, especially with per-user pricing models. Repatriation allows you to potentially leverage existing perpetual licenses you already own, reducing ongoing software costs.
  • Control Over IT Staff Costs: Managing a cloud environment often requires specialized skills. Repatriating workloads to familiar on-premise systems can potentially reduce the need for additional cloud-focused IT staff, lowering personnel expenses.

Of course, repatriation isn’t a magic solution. There are migration costs and potential hardware upgrades to consider. However, by carefully analyzing your cloud usage and repatriation benefits, you can make an informed decision that brings your IT budget under better control.