Cloud bills are rising for businesses of all sizes

14 August 2024, 18:09 published

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Cloud service expenses are increasing rapidly for companies worldwide, leading to growing challenges that businesses face when it comes to managing their budgets.

In its latest ‘Cost of Cloud’ report, Civo also noted the increasing dissatisfaction with pricing strategies when it comes to major cloud providers, likely in a response to ongoing regulatory action surrounding unfair market dominance.

Three in five (59%) of organizations surveyed by Civo experienced an increase in cloud bills over the past year, with more than one in three (37%) believing the cloud has failed to deliver on its promise of cost-effectiveness.

It’s not just you… cloud is getting more expensive

In recent years, companies have been promised increased flexibility and better cost optimizations when it comes to cloud computing compared with expensive on-prem infrastructure, however the lasting effects of the pandemic, subsequent geopolitical tensions and rapid advancements in AI have all served to increase prices.

The financial strain was felt most among smaller organizations – one-third (32%) of those with fewer than 50 employees recorded monthly cloud bills exceeding $10,000. Some were as high as $5 million.

However, price hikes have not been uniform, with Civo revealing typical rises of around 10-25%.

After putting in the work to migrate to the cloud, nearly two in five (37%) are now considering moving to alternative infrastructures, and a handful (7%) are already in the process of transitioning away from the ‘Big 3’ (Amazon, Microsoft and Google).

“Inflationary pressures and the rush to deploy AI have likely been key external factors in increasing cloud spend over the previous year, but pricing complexity can still increase costs unnecessarily for individual customers,” noted Civo CEO Mark Boost.

In an indirect stab at the ‘Big 3’ and in light of ongoing antitrust investigations, Boost added: “Simplified services without egress fees that truly enable interoperability can help businesses make the most out of all the cloud has to offer.”