3 Cloud Computing Cost Trends Today

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Application modernization efforts that support the aggressive deployment of digital strategies have paved the way for accelerated cloud adoption. This has led businesses to spend a higher percentage of their IT budget in the cloud. To effectively increase the cost of cloud operations, companies need to understand the underlying reasons for their rising costs.

A study by Andreessen Horowitz found that enterprises typically spend 20% more than expected on public cloud infrastructure. The unpredictability of enterprise cloud spending is driven by three key factors: more applications bundled with multi-cloud, increased fees charged by cloud service providers (CSPs) for pay-per-use services, cloud consumption and waste.

The last three years have seen a dramatic increase in the use of cloud computing as companies more fully embrace the technology to meet the challenges of the global pandemic, including distributed workforce and digital footprints constantly expanding needed to provide better employees. and customer experiences. The State of Multi-Cloud Infrastructure Report and the Application eXperience Infrastructure Study (AXIS) found that cloud-related spending accounted for 31% of overall US IT budgets last year. Similarly, International Data Corporation (IDC) showed cloud infrastructure spending grew 13.5% year-over-year in the fourth quarter of 2021 to $21.1 billion, marking the second quarter consecutive year-over-year growth.

IDC also predicted that by the end of 2022, cloud-related spending will exceed non-cloud computing infrastructure spending for the first time. As businesses have shifted from short-term, connectivity-focused requirements to digital strategies for long-term growth, there is an increasing focus on application modernization and increased lifting strategies and travel solutions supported by the cloud. In fact, the AXIS study found that nearly half of enterprises expect more than 75% of their applications to be in the cloud within 12 months.

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register here Cloud costs are rising due to the global economic crisis

In March, Google Cloud announced significant price increases for a number of core services under the guise of wanting to provide "more flexible pricing models and options." However, all cloud service providers (CSPs) have increased their prices to varying degrees. This can be attributed to the chip shortages that made national headlines last year as well as the rising cost of goods due to supply chain issues and inflation that we are all experiencing right now. The war in Ukraine has only exacerbated the problem as Ukraine produces 70% of the world's supply of neon gas used in semiconductor lithography.

Hidden Exit Costs: A Major Challenge

Another major cloud cost management challenge for enterprises is hidden egress costs. Although most cloud providers generally don't charge for cloud data transfer ("in"), they do charge for data egress in most situations. Data output occurs whenever your application...