Cloud storage fees hit nearly half of bills, survey reveals
A new global survey of cloud storage decision-makers has found that data egress and access fees continue to hinder IT and business activities, as organisations struggle with complex and unpredictable billing models.
The third annual Wasabi Global Cloud Storage Index surveyed 1,600 leaders responsible for cloud object storage procurement in businesses across 11 countries, including the United Kingdom, United States, Australia, Germany and Japan.
Fees remain a persistent issue
The research highlights that organisations allocate, on average, 49% of their monthly cloud storage bills to fees associated with networking, API calls, operations, egress, and retrieval, with the remaining 51% applied to actual storage capacity. This ratio has shown little change over the past two years, which the report notes indicates stubborn complexity in cloud storage billing practices.
More than half (56%) of organisations reported that data egress and access charges have stifled their IT or business operations, underscoring the ongoing impact of these fee structures.
Budget overruns in cloud storage are also becoming more frequent, with 62% of decision-makers stating their organisations exceeded planned spending for 2024, up from 53% in 2023. Contributing factors include difficulties in forecasting usage and higher-than-expected operations fees.
Andrew Smith, Director of Strategy and Market Intelligence at Wasabi Technologies, said:
"Unfortunately, cloud storage remains an unpredictable expense for many organizations, and fees associated with moving and accessing stored data only exacerbate the nature of this unpredictability, ultimately stalling business initiatives and slowing innovation. It is imperative that organizations eliminate and minimize these fee structures whenever possible. Cloud object storage is only growing in capacity and usage, as organizations are demanding more and doing more with their data, often driven by new AI-based initiatives to explore use cases like GenAI or agentic AI. Controlling costs associated with these new workloads will be critical to long-term business success, and legacy fee structures and billing models will only slow progress and punish innovators."
Security remains paramount
Security features continue to be a top priority for organisations selecting cloud storage services. The quality and robustness of encryption was cited as the most important factor by 32% of respondents, followed by ransomware protection capabilities (29%) and data durability and availability service-level agreements (28%).
Virtually all respondents (99%) said their use of public cloud storage has led to data security improvements for their organisation, including better security capabilities and enhanced loss prevention measures compared to previous environments. The same proportion said they are able to recover data from their public cloud environments.
However, only 47% of surveyed users reported utilising object lock or immutability as part of their backup procedures, despite its recognised role in data protection. Of those not currently using it, 49% indicated plans to implement object lock within the next year or more.
More than half (53%) of organisations are restoring data from their public cloud environment on a weekly or biweekly basis, either for backup or regular testing, pointing to active use of cloud storage for secondary storage and recovery use cases.
Challenges in cold storage
Use of low-cost 'cold' storage tiers remains associated with significant challenges, according to the findings. Nearly all users of cold tiers (98%) experience data performance degradation and access penalties, with one in five businesses saying these factors have a negative impact on their operations.
Despite expectations that data stored in such tiers will not frequently need to be accessed, 84% of organisations report accessing their cold-tier data weekly or monthly, often experiencing reduced performance or incurring additional costs.
Half of respondents utilise active archive storage for analytics and data processing, and 49% for security analytics and forensics. Regulatory compliance and the need to respond to security events, such as ransomware or malware, were cited as primary reasons for often-unplanned data access, making it difficult for organisations to accurately forecast associated costs.
Dave Friend, Founder and CEO of Wasabi Technologies, said:
"The Wasabi Global Cloud Storage Index provides valuable data about how organizations are using their cloud storage, and the pain points they encounter. We use the Global Cloud Storage Index to align our development priorities with the needs of our customers, and one of the interesting findings in this most recent Index is that nearly all organizations using cold or archive tiers experience data performance degradation in addition to often-burdensome data retrieval costs. Another striking statistic is that egress and other charges associated with the hyperscalers' cloud storage amount to almost half the total storage costs. At Wasabi, we don't charge for anything other than the storage and we don't complicate our users' lives with multiple data storage tiers. Instead, we provide one high-performance tier of hot cloud storage with predictable pricing so businesses can focus on innovation instead of trying to manage their cloud storage costs."
Survey methodology
The Global Cloud Storage Index was compiled by Vanson Bourne, an independent market research firm. The survey targeted IT decision-makers from organisations with more than 100 employees, spanning both public and private sectors across North America, Europe, Asia Pacific, and Australasia, using a multi-level screening process to ensure relevancy of respondents.
