Businesses across the globe are facing skyrocketing costs associated with cloud services, creating significant hurdles in budget management.
Civo’s recent ‘Cost of Cloud’ report highlights escalating discontent regarding pricing strategies from prominent cloud vendors, which seems to correlate with ongoing regulatory scrutiny over potential market monopolization.
A survey conducted by Civo revealed that nearly 60% (59%) of organizations experienced an increase in their cloud expenditures over the last year. More alarmingly, over one-third (37%) of respondents felt that the expected cost efficiency promised by cloud solutions has not materialized as anticipated.
Cloud Costs Are on the Rise Globally
In recent times, businesses were led to believe that transitioning to the cloud would yield greater flexibility and more economical solutions compared to traditional on-premises infrastructures. However, lingering effects from the pandemic, rising geopolitical issues, and swift advancements in artificial intelligence have collectively driven up prices.
This financial burden has been particularly challenging for smaller firms; a significant one-third (32%) of organizations employing fewer than 50 staff members reported monthly cloud expenses surpassing $10,000. In some cases, these costs soared as high as $5 million.
Notably, price increases are not uniform; Civo’s findings indicate standard hikes ranging from 10% to 25%.
Even after making substantial efforts for a seamless transition to the cloud environment, about two-fifths (37%) are now contemplating alternative infrastructure solutions while a minority (7%) have begun moving away from major providers such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform.
Civo’s CEO Mark Boost commented: “The inflationary environment and heightened urgency for AI deployment have likely contributed significantly to escalating cloud expenditures over this past year. Nonetheless, pricing intricacies can unnecessarily inflate costs for individual clients.”
Slightly critiquing dominant players among providers amid ongoing antitrust discussions he remarked: “Services that offer straightforward pricing without egress fees could substantially enhance interoperability and help companies maximize their investment in the cloud.”
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