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Civo has released its latest report highlighting the increasing cost of cloud services across the industry, finding that 59% of organizations reported an increase in cloud spend over the past 12 months.
Drawing on a survey of over 500 industry professionals, the report aims to understand the trends, challenges, and strategic responses shaping the future of cloud, particularly in relation to the dominance of the “Big 3” cloud providers. Thirty-seven percent of organizations believe that the cloud has failed to live up to its promise of cost-effectiveness.
The research found that price increases were not uniform across respondents:
31% of organizations experienced an increase of up to 10% in cloud spend.
32% saw an increase between 11% and 25%.
37% reported a rise of over 25%.
Significantly, 32% of smaller organizations with fewer than 50 employees reported monthly cloud bills exceeding $10,000, with some reaching up to $5,000,000. Over half (54%) of mid-sized businesses, with between 100-499 employees, indicated monthly expenditures ranging from $10,000 to $499,000.
The report also found that 37% of organizations are considering a move to alternative infrastructures, with a further 7% actively in the process of transitioning away from the hyperscalers. Notably, 40% of organizations have yet to take any action to manage or reduce their cloud service costs, with billing and service complexity putting obstacles to cost reductions.
Mark Boost, CEO of Civo said, “Inflationary pressures and the rush to deploy AI have likely been key external factors in increasing cloud spend over the previous year, but pricing complexity can still increase costs unnecessarily for individual customers.”
“Yet there are alternative methods for successful deployment. No matter the size of an organization, transparency over billing and cloud usage can help manage cloud costs, even as external market and economic pressures look to increase them. Simplified services without egress fees that truly enable interoperability can help businesses make the most out of all the cloud has to offer.”
