New research by Wasabi Technologies has claimed nine in 10 (92%) businesses are allocating more than half of their cloud storage budgets to fees, rather than actual storage capacity.

The news comes as most organizations (91%) expect to increase their budgets in 2024 despite more than half (53%) already exceeding their budgets in 2023, signifying not only the huge potential for the cloud industry but also the rising costs.

The report, based on a survey of more than 1,200 IT and storage decision-makers, quantifies the growing reliance on public cloud storage solutions.

Cloud fees are just as expensive as actual storage

“European cloud storage users continue to struggle with storage fees, but despite this, the region continues to show a healthy preference towards cloud-first decision making when it comes to IT services adoption,” commendted Andrew Smith, senior manager of strategy and market intelligence at Wasabi.

The report also mentioned the high ingress and egress fees imposed by many of the hyperscalers, which have been a hot topic in recent months. In the past few weeks alone, Google Cloud and AWS have introduced measures to make switching providers free (or, in some circumstances, cheaper).

The index revealed that 50% of EMEA cloud costs are directed towards fees, which is several percentage points higher than the global average. However, more European companies look to be going cloud-first compared with the global average, with Germany leading the way.

With costs soaring, companies have revealed some of the key factors that determine their cloud provider, concluding third-party integrations, security and compliance features, and sustainability.

Jon Howes, VP & GM for EMEA at Wasabi, summarized: “Progress towards off-premises cloud storage solutions is a direction nearly all enterprises are taking.”

He added: “The ever-growing frustration with unnecessary fees and vendor lock-in, as highlighted by the investigation by the UK’s market watchdog, provides a navigational challenge for cloud-first organisations in EMEA.”

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