Cloud services costs are rising rapidly for businesses worldwide, leaving companies facing increasing challenges when it comes to managing their budgets.
In its latest Cost of Cloud report, Civo also noted growing dissatisfaction with the pricing strategies of major cloud providers, likely in response to ongoing regulatory scrutiny surrounding unfair market dominance.
Three in five (59%) of organizations surveyed by Civo saw their cloud bills increase in the past year, and more than one in three (37%) believe the cloud has not delivered on its promise of cost-effectiveness.
It’s not just you… the cloud is getting more expensive
In recent years, businesses have been promised greater flexibility and better cost optimization when it comes to cloud computing compared to expensive on-prem infrastructure. However, the ongoing effects of the pandemic, subsequent geopolitical tensions, and rapid developments in AI have all led to higher prices.
The financial pressure was felt most by smaller organizations, with a third (32%) of organizations with fewer than 50 employees reporting monthly cloud bills of more than $10,000, with some reaching as high as $5 million.
However, the price increases have not been uniform. Civo typically reports increases of around 10-25%.
After embarking on their migration to the cloud, nearly two in five (37%) are considering moving to alternative infrastructures, with a handful (7%) already in the process of moving away from the ‘Big 3’ (Amazon, Microsoft and Google).
“Inflationary pressures and the rush to implement AI have likely been important external factors driving cloud spending over the past year, but pricing complexity can still unnecessarily increase costs for individual customers,” said Mark Boost, CEO of Civo.
In an indirect attack on the ‘Big 3’ and in light of ongoing antitrust investigations, Boost added: “Simplified services with no outbound costs that enable true interoperability can help businesses get the most out of everything the cloud has to offer.”