Why are cloud costs so high?
As stated in a recent TechCrunch article,
Cloud economist Corey Quinn writes that Google is “
In fact, an Anodot survey showed that almost a third of respondents saw a
Why are cloud costs so high? That’s partly because the very companies that offer cloud services are raising their prices. But there are also other factors at play. Let’s look at some of the reasons why cloud costs are so high and how to fix them.
One of the challenges of the cloud is what is called “
This means that if you want to move your data out of the cloud, you’ll likely have to pay hefty fees. HostDime explains that it can cost up to “
This discourages companies from moving their data out of the cloud and ultimately keeps it locked away. This is one of the main reasons why big companies like Amazon, Microsoft, and Google are able to maintain such a stranglehold in the cloud market.
Another cloud challenge is overprovisioning. This happens when companies pay for high availability access to rarely used data, often because it seems very affordable at the time.
However, over time, these costs add up and businesses can find themselves paying too much for data that is rarely accessed.
Reports indicate that almost
Another factor that contributes to high cloud costs is the abandonment of discounts. Companies often don’t take advantage of the discounts available when going cloud-based.
This is because they are unaware of available discounts or don’t want to spend time finding them. However, these discounts can save businesses a lot of money in the long run.
Another reason why cloud costs are so high is that there is often a lack of cost visibility. This can happen when companies don’t have a clear idea of what they’re spending on cloud services or when they don’t track their cloud usage.
This lack of visibility makes it difficult to control costs and often leads companies to overspend on cloud services. This ties into the next issue on rising cloud-related bills.
Cloud cost spikes often occur when companies do not fully understand their cloud usage patterns. As usage patterns change, so do costs. without a clear understanding of how usage patterns affect costs, it is difficult to predict or control expenses.
One of the main reasons cloud costs are so high is due to undetected usage spikes. This can happen when companies don’t have a clear understanding of their cloud usage patterns or when they don’t closely monitor their cloud usage.
An Anodot survey revealed that more than
Banned in 1890 in the United States by the Sherman Antitrust Act, monopolies nevertheless persisted in one form or another.
Although there is no single dominant player in the cloud computing market, a few large companies are beginning to emerge as clear leaders. AWS, Azure, GCP and Alibaba control most of the market, especially in the hyperscaler segment, in which
This concentration of market share is bad news for customers, who have a weakened bargaining power in terms of price or quality of service. It’s also bad news for startups and small businesses, struggling to compete with the deep pockets and vast resources of the cloud oligopoly.
Moreover, the price elasticity of public cloud is only
Complex cloud contracts can be confusing and often have hidden costs that can surprise businesses. It is important to carefully review any contract before signing and to be aware of potential exit clauses, data transmission and connectivity costs, and other additions that may not be immediately apparent.
The growing popularity of cloud services has led to an increase in demand for skilled negotiators who can help companies secure favorable terms. However, the complex nature of cloud contracts can often lead to confusion and litigation down the line.
All of these issues compound and intertwine to create the current state of high cloud costs. Businesses should be aware of the challenges they face when migrating to the cloud and take steps to address them. Only then can they hope to get their cloud costs under control.
So what can be done about the high costs of the cloud? As explained in an article by Usage.AI, a company that uses AI to automatically reduce cloud costs, there are many ways to reduce costs, including:
- Use cloud optimization frameworks
- Resource resizing
- Optimization of purchasing strategies
On the one hand, it is important to understand the reasons for the high costs. Once you have a better understanding of the factors contributing to high cloud costs, you can begin to address them. Businesses need to be proactive in negotiating beneficial contracts with cloud providers. This includes being aware of discounts and other potential savings opportunities.
Additionally, enterprises should take steps to improve their visibility into cloud costs. This includes carefully tracking usage and costs and using tools to help identify areas where costs can be reduced. Businesses should also be aware of their cloud usage patterns and take steps to avoid usage spikes that can lead to unexpectedly high costs.
Finally, it’s important to remember that the cloud is a long game. Upfront costs can be high, but over time the cloud can deliver significant savings. Businesses need to focus on the long-term benefits of the cloud and not be discouraged by the short-term costs.