Many businesses are overspending on their cloud storage budget

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Wasabi report claims 49% of cloud storage spend could just be fees
Three in five overspent on their cloud budgets in 2024
Customers are staying because of cost, not what matters to them

Half of UK businesses are overspending on cloud storage because they’re being discouraged from exiting with high egress fees, new research has claimed.

Figures from Wasabi say this is leading to a misalignment between companies’ planned costs and their actual costs, leading firms to go overbudget.

Now, more than two-fifths (44%) of UK businesses are adopting a hybrid approach to storage, combining cloud and on-prem solutions, to control costs.

Cloud storage billing practices continue to be criticized

Although the survey’s findings aren’t particularly shocking (we already know about high egress fees and technical limitations that discourage migrating data between providers), antitrust bodies including the European Commission have already sought to deal with these issues to encourage competition.

Wasabi’s research shows these trends are clearly continuing despite Microsoft’s months-long turmoil in settling on an agreement to enable its users to switch.

Alarmingly, the research revealed almost half (49%) of a typical organization’s cloud storage bill is exclusively spent on fees, with the remaining 51% being allocated to the actual storage capacity. This has led to three in five (62%) either massively or slightly exceeding their public cloud storage budgets within the past 12 months, up from 53% last year – only one in three (33%) were able to align spend with budget, with a tiny 6% spending less than anticipated.

"If you’re familiar with the legacy billing models of cloud object storage services, or IaaS in general, this finding will not be surprising," noted Wasabi Director of Strategy and Market Intelligence, Andrew Smith.

Moreover, Wasabi found despite the priority given to data protection, security, performance, scalability and sustainability when selecting a cloud provider, many organizations are actually citing pricing as the key reason that they’re staying with their current provider.

Wasabi’s VP & GM for EMEA, Kevin Dunn, summarized: “Organisations are being unfairly penalised for using and moving their data by anti-competitive practices like high egress fees and complex pricing models. This is consequently stifling innovation, as data is the lifeblood for unlocking full growth potential.”

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With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!