The Costof Cloud
A Civo white paper looking into the complexity of cloud costs
for businesses and alternatives beyond the hyperscalers.
Behind the trend in rising costs, the hyperscalers have created an environment of obfuscation, with deliberately complicated pricing models for users. Many businesses report billing tools are difficult to use, lacking in transparency and hindering firms' ability to properly plan technology costs.
You only have to search Google for “AWS cost management”, and you'll find many different tools and organizations, such as The Duckbill Group, whose core function is to help you reduce and make sense of your cloud spend. It seems crazy it's got to this point where a whole industry is emerging solely to help you understand what your cloud bill means.
Our research showcases the opaque pricing that dominates cloud usage in today's market:
- We found that 37% of public cloud users have been stung by unexpected costs in the last 12 months.
- Users report struggling to keep up with costs, as 34% claim to find it difficult to calculate how much their cloud provider is going to charge them each month.
This evidence makes clear that the big cloud providers have a universal problem across their services with costs that are hard to monitor and difficult to control. Indeed, only 17% of respondents told Civo that there are no areas of their cloud usage where it is difficult to monitor costs.
These highly complex billing models can be highly damaging for businesses. In the search for sustainable growth, organisations rely on accurate cost planning. This can easily be put at risk if a business faces recurrent unexpected bills from cloud providers for simple, core functions of cloud computing like data transfer or compute.
For a large enterprise, such costs are damaging. For a start-up or organisation running on fine margins, they have the potential to be crippling.
In 2020, this fear became a reality for start-up Milkie Way. The firm's founder was exploring new directions to develop their product and set up a new project with a cloud billing budget of $7. In the process of just a few hours testing, the start-up accidentally incurred a bill of over $71,000. The founder set out the stark reality they now faced: “as a bootstrapped company, there was no way for us to come up with $72k”. Google cancelled the bill as a one-time gesture, but the incident demonstrated the potential dangers.
This world of opaque and unpredictable pricing cannot continue. The industry needs to put the needs of their customers first, offering businesses a streamlined approach to infrastructure that is transparent on pricing and delivers for the organisation. Cloud providers should remember that the goal is not to create additional anxieties and worries for IT teams about spiralling costs. We should be streamlining infrastructure management and developing features for tech professionals to focus on what these businesses do best: creating the innovative solutions that are essential for success in today's tech-driven world.