Report reveals rising cloud costs & business dissatisfaction

Civo has released its latest Cost of Cloud report, revealing an increase in cloud services costs across the industry. Based on a survey of over 500 organisations, the report delves into the challenges businesses encounter in managing their cloud expenses and highlights a rising dissatisfaction with the pricing practices of major cloud providers.

The findings indicate that 59% of organisations have seen their cloud bills rise over the last year. According to 37% of respondents, the cloud has failed to deliver on its promise of cost-effectiveness. Among smaller organisations, defined as those with fewer than 50 employees, 32% reported monthly cloud bills exceeding USD $10,000.

Price increases were not uniform across all respondents. The survey found that 31% of organisations experienced an increase of up to 10% in their cloud spend, while 32% saw an increase between 11% and 25%. A substantial 37% reported a rise of over 25%. Mid-sized businesses, with between 100-499 employees, also faced significant costs, with 54% indicating monthly expenditures ranging from USD $10,000 to USD $499,000. Some smaller organisations reported monthly cloud expenses reaching up to USD $5,000,000.

The report also highlights a potential shift in the market. Approximately 37% of organisations are contemplating a move to alternative infrastructures, with an additional 7% already in the process of transitioning away from dominant cloud providers. Meanwhile, 40% of organisations have not yet taken any steps to manage or reduce their cloud service costs, citing billing and service complexity as major barriers to cost reduction.

Mark Boost, CEO of Civo, commented on the findings: "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."

Boost suggested that there are alternative methods for successful deployment, regardless of an organisation's size. "Transparency over billing and cloud usage can help manage cloud costs, even as external market and economic pressures look to increase them. Simplified services without egress fees that truly enable interoperability can help businesses make the most out of all the cloud has to offer," he said.

The report provides critical insights for businesses aiming to navigate the complexities and costs associated with cloud computing. It underscores the need for transparent and simplified billing practices, especially as the market becomes more complex and costly.