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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.
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