Dive Brief:
- Enterprise customers spend nearly half of their cloud data storage budgets on operations, retrieval, transfer, egress and analytics fees, according to a report commissioned by cloud storage solution Wasabi published last week.
- The other half of enterprise cloud data spending — 52% — goes to capacity procurements, according to the report, which surveyed 1,200 IT decision makers during the final two months of last year.
- More than half of respondents said spending on cloud object storage exceeded budgets last year, with 16% admitting their organization "massively" overshot budget expectations. Nine in 10 expect their organization’s capacity needs and consequent spending to increase this year.
Dive Insight:
Data storage is the unglamorous underbelly of cloud. Flashy, customer-facing applications and streamlined APIs showcase the technology’s prettier qualities, but it’s the data that makes digital tools transformative.
“In some ways, storage is an afterthought,” said Andrew Smith, senior manager of strategy and market intelligence at Wasabi. “Users just want it to be low-touch, automated, you turn it on and you get the storage you need and it performs how you expect it, with no outages and no data loss.”
For most end users, cloud storage checks all the critical service boxes, Wasabi found. But visibility into spending and fee structures remain a sore spot. While 9 in 10 respondents expressed satisfaction with current object storage solutions, price and billing complexity was the top reason for customer dissatisfaction.
“A lot of enterprises don't know what types of fees there are or how they're applied,” said Smith. “They think about the application, which is what a CFO or a FinOps professional will look at. But you have to dig one or two layers deeper to get to the storage cost problem.”
Compute costs, which constitute roughly half of most enterprise cloud bills, were the initial focus of optimization, as FinOps practitioners brought engineering, finance and business teams into alignment. But generative AI and the data-hungry LLMs that enable enterprise solutions have sharpened IT’s focus on data.
There’s ample room for optimization, Smith said.
“A lot of enterprises don't know what types of fees there are or how they're applied,” said Smith. “They don’t have visibility into their bill. There isn’t a single source of truth that they can go to on there to break down what they’re being charged for on a month-to-month basis.”
