Quick Overview:

  • According to a report commissioned by Wasabi Technologies and released Tuesday by Vanson Bourne,AI drove a surge in data consumption last year, significantly exceeding enterprise cloud storage budgets.The survey, the third annual Wasabi Global Cloud Storage Index, polled 1,600 enterprise cloud storage decision-makers.
  • The problem is worsening: the share of respondents experiencing cloud storage cost overruns rose from 53% in 2023 to 62%, a 9-percentage-point increase. A quarter of respondents reported severe budget overruns in 2024.
  • Data egress and usage fees are impacting broader enterprise initiatives. More than half (56%) of respondents said unexpected data costs caused cloud-related business delays. "Storage remains an unpredictable expense for many organizations... hindering business plans and slowing innovation," Andrew Smith, director of strategy and market intelligence at Wasabi Technologies, said in the announcement.

Deep Dive:

Cloud storage can be a cost-effective choice for enterprises until they need to process or migrate data. While hyperscalers offer volume purchase discounts and on-demand scalability, they also provide low-cost tiering options for large volumes of infrequently accessed data.

"When organizations believe they won't need to access certain data, they choose the cheapest storage tier, which is logical," Smith told CIO Dive. But when plans change, costs rise.

Cloud storage capacity itself is relatively inexpensive, accounting for only 51% of cloud data bills, Wasabi found. Network fees, API calls, and data egress and usage charges consume the rest.

Early last year, Google Cloud was the first toeliminate some data egress feesin response to regulatory scrutiny, with AWS and Microsoftquickly following suit. The three cloud giants dominated the global storage market last year, capturingtwo-thirds of all spending。

As hyperscalers increase capacity and enterprise purchasing scales up, Lidice Fernandez, group vice president and general manager of IDC's Worldwide Enterprise Infrastructure Trackers, told CIO Dive thatthe unit cost of storagehas declined.

Despite this trend, unexpected storage spending remains a pain point.

Organizations are often satisfied with cloud storage until they need to access their data. Nearly nine in ten respondents in the Wasabi survey expressed satisfaction with their current object storage provider, but 39% cited billing complexity and fee structures as issues.

"We often think of object storage as the place for all cheap, unused data," Smith said. "But the reality is that organizations are accessing this data quite frequently. Data that hasn't been touched in a year or more may suddenly become valuable for analytics or training AI models."