TL;DR
- Enterprises worldwide are increasing budget for growing data storage needs as public cloud storage capacity continues to expand at a relentless pace.
- The cloud storage market is plagued by inefficient budgeting and overspending. Data from Wasabi sheds light on an unfortunate truth: storage services fees account for 48% of total cloud storage bills on average.
- While the perceived value of enterprise data might be limitless, storing and accessing that data, on the other hand, has a very real cost. More than half of organizations exceeded their cloud storage budget in 2022. This highlights a significant pain point for enterprises, and an opportunity to improve as they assess cloud storage spending going forward.
READ MORE: Introducing the Wasabi 2023 Cloud Storage Index (Wasabi)
The majority of organizations will spend more on expanding cloud storage capacity in 2023 despite a huge number of them blowing their budgets in 2022.
The “ugly truth” is that enterprises are spending almost as much on storage fees as they are on storage capacity, finds storage vendor Wasabi, which compiled the “2023 Cloud Storage Index Executive Summary Report,” pointing to significant improvements to be gained in billing/fee structures and multicloud deployments.
Wasabi analyzed survey results from 1,000 IT decision-makers worldwide to provide insight into how corporations across sectors including energy, finance, and media are strategizing cloud storage.
Its data confirms the relentless pace of data growth in the cloud, with 84% of respondents expecting the amount of data they store in the public cloud to increase this year.
Today, organizations allocate 14% of their total IT budgets to public cloud storage services, on average. Wasabi expect this proportion to expand, as overall IT budgets grow slowly or remain relatively stagnant in 2023, and more dollars are allocated to high-growth IT segments like cloud infrastructure.
However, more than half (52%) of organizations exceeded their budgeted spend on cloud storage in 2022, illustrating a significant pain point which many users may look to address this year.
The worst offenders were new adopters. 72% of respondents who adopted public cloud storage services in the past 12-24 months exceeded their budget.
The reasons why organizations exceeded their budget expectations include incurring higher data operations fees (e.g., cross-region replication, object tagging, transfer acceleration) than expected.
Also, migration of “additional applications/data” to the cloud was higher than originally anticipated. Others reported higher API call fees (e.g., reads/writes) and higher data retrieval fees than expected.
“Fees can be notoriously difficult to predict,” said Andrew Smith, senior manager of strategy and market intelligence at Wasabi. “As a result, they are a major reason why more than half of organizations we surveyed said that they exceeded their budgeted spending on cloud storage services in 2022. Understanding the cloud storage bill was the number one challenge associated with cloud storage migration. The survey data also sheds light on one of the industry’s unfortunate truths: A large proportion of storage bills are allocated to various fees. Specifically, respondents said storage fees account for 48% of their total cloud storage bill on average.”
Wasabi’s survey also confirms that many enterprises are using more than one public cloud infrastructure provider: 57% of organizations use more than one public cloud storage provider.
“Nothing groundbreaking here, but what is interesting are the reasons why many organizations have adopted multiple cloud providers for storage, and what they believe the key benefits and challenges of this type of strategy are,” noted Smith.
Almost 90% of those surveyed indicated that they had migrated storage from on premises to the public cloud within the last year. Interestingly, the top reasons driving migration were not cost related. Instead, users were spurred by the need for better infrastructure resilience, durability, and scalability.
