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Civo study highlights surge in cloud costs for major users
Fri, 1st Mar 2024

New research conducted by Civo, a solely cloud-native service provider, reveals that 64% of users of the Big Three hyperscalers (Amazon Web Services (AWS), Microsoft Azure, and Google Cloud) have noticed an increase in cloud costs over the past year. The study further reveals that costs have risen by up to 25% for 69% of the survey respondents.

The research survey involved over 500 tech professionals utilising the hyperscalers, and its findings were launched during the headline speech at Civo's Navigate North America event. The discussion was centred on the cost of cloud usage and how perceptions have changed over the past year.

One significant finding pertains to cost transparency, with 42% of businesses using the hyperscalers unable to easily predict their monthly cloud bill. More startlingly, over a quarter (28%) of respondents confessed to having received an unexpectedly hefty bill for cloud services.

In a rather poignant comparison, the study draws attention to a promise made by then AWS CEO, Andy Jassey, in 2012. He stated that due to AWS's considerable scale, it could extend savings to customers through lower prices. This claim starkly contrasts with the outcome of Civo's research. Almost half of the respondents (47%) have suggested that current cloud costs are too high. Furthermore, 37% expressed that the cloud has failed to fulfil its promise of cost-effectiveness, indicating the impact that escalating costs are having on users.

The escalating costs and uncertainty of the cloud have forced users to reconsider and take decisive action. About 57% of hyperscaler users reported attempts to manage or reduce their cloud service costs. The most popular method adopted was the implementation of internal cost-saving strategies or practices (79%), followed by the deployment of software tools designed for cost optimisation (58%). Notably, a significant portion of respondents (28%) admitted to hiring consultants specialising in cloud cost management.

The research also highlighted an increasing likelihood of businesses departing from cloud services. Almost half (47%) of the businesses surveyed are considering moving away from the cloud. Additionally, analysts at IDC pointed out an emerging trend: a whopping 71% of users are planning to relocate all or some of their workloads from the public cloud back to private IT environments within the next two years.

Commenting on the situation, Mark Boost, CEO of Civo, warned, "The cloud is broken." He argued that the hyperscalers have failed to deliver on their early promise of low costs at scale, leaving users grappling with high prices, complicated solutions, and proprietary tech that make migration difficult. He expressed particular concern for smaller businesses, for whom this situation could be significantly damaging.

However, he was hopeful about the future. There is still room for the tech sector to adopt a different, "more responsible path," as he put it. Boost urged for a focus on fairness, transparency, and customer experience - not solely shareholder profits. He envisioned a cloud that empowers IT teams to experiment and innovate, to find the services they require and to pay reasonable prices for them. Asserting that the future of tech must embody fairness and social responsibility, he concluded, "Cloud should be about... levelling the playing field and ensuring anyone can access cutting-edge tech to innovate and build a successful business."