Cloud storage has become an increasingly useful tool in the operations of many organizations, allowing businesses to store and access their data with unprecedented levels of efficiency. According to a survey by Wasabi, a majority of organizations will expand their cloud storage capacity and spending in 2023, seeking to capitalize on improvements to billing/fee structures and multicloud deployments.
For those looking for better insight into the challenges associated with managing this aspect of business operations, understanding how peers have approached their cloud storage strategy can provide valuable guidance.
Data stored in the public cloud will increase in 2023
When asked about their organization’s approach to cloud IT services adoption, including storage, 41% of respondents said they follow a cloud-first approach whereas, for 18% of respondents, the majority of IT infrastructure is on-premises. Remaining 41% have a balanced approach to cloud adoption and storage.
The survey data conclusively shows the continued proliferation of cloud storage with 84% expecting a rise in usage by 2023. Furthermore, it confirms that enterprises are increasingly transitioning from traditional IT environments to more modern approaches such as public and dedicated clouds for their total storage solutions.
Enterprises expect to increase their cloud storage budgets
At present, organizations are actively allocating 14% of their total IT budgets to cloud storage solutions. This allocation is expected to expand further in the year 2023 due to the slow growth or stagnation in overall IT budgets and more budget being allocated for high-growth IT segments such as cloud infrastructure. Most enterprises are increasing their cloud storage budgets to meet the needs associated with expected capacity growth. Unfortunately, more than half of organizations have gone over their budgeted spending on cloud storage – an issue that could be addressed in 2023.
52% of organizations spent more than they budgeted for public cloud storage. New public cloud storage adopters were most likely to exceed their budget with 72% going over budget in the past 12-24 months.
High data operations fees – the top reason to exceed cloud storage budget
As per the survey, enterprises are spending almost as much on storage fees as they are on storage capacity, which is a major reason for many of them blowing their budgets. When asked for reasons why organizations exceeded their budget expectations, 3 out of the top 4 reasons reported by organizations were fee related.
Businesses that have adopted public cloud storage as part of their operations have experienced an increase in spending beyond projected budgets. One of the main drivers was the fees associated with data operations, such as cross-region replication, object tagging, and transfer acceleration, which can quickly add up.
Additionally, companies often found themselves migrating more applications and data to the cloud than originally planned, which in turn incurred additional fees. Furthermore, higher API call fees associated with puts/gets and reads/writes as well as higher data retrieval costs contributed to spending increases that were not envisioned at the start.
Better infrastructure is driving the demand for cloud data migration
Organizations are embracing cloud IT to meet their increasing data needs, with 90% of respondents recently migrating storage from on-premises environments. Interestingly, cost considerations were secondary for these users who instead prioritized the resilience, durability, and scalability offered by public clouds.
- The key factor that led organizations to migrate capacity from on-premises to the public cloud was better infrastructure resilience/durability than they could deliver on-premises.
- They also needed to scale resources beyond what they could do on-premises, and they needed to avoid the costs of refreshing/purchasing new hardware.
- Additionally, the public cloud provides access to global regions and locations that organizations don’t have on-premises.
Different industries are moving to the cloud for different reasons.
- Businesses and professional services companies want to avoid refresh costs for their hardware.
- Companies in the energy, financial service, manufacturing, and retail industries need to be able to scale beyond what they can do on-premises.
- IT, technology, and telecom companies believe that data security is better in the cloud than on the premises.
- Managed service providers want access to global regions and media and entertainment companies want better infrastructure resilience/durability.
- The public sector is migrating workloads to the cloud for better infrastructure resilience/durability.
57% of organizations depend on multiple cloud providers
There are multiple reasons why people are choosing to use more than one public cloud storage provider. The top reason for this is that different business units within the organization are making their own purchase decisions. Specific storage or infrastructure-related features, and different application requirements that need specific storage environments are the other major reasons why organizations are favoring multicloud adoption.
By deploying a multicloud strategy, organizations can take advantage of powerful cloud solutions that cater to the unique needs and requirements of their applications. They have access to greater choices in terms of regions/availability zones and cost-effectiveness, enabling them to optimize performance while staying on budget.
Organizations have identified three major challenges in their pursuit of a multicloud solution. These are:
- Lack of consistent storage features/tools across all clouds
- Differences in data operations and access depending on service providers
- Difficulties encountered when sharing or migrating large amounts of data between clouds
Cloud storage security concerns
As the infrastructure of public cloud services and storage becomes more central to enterprise IT environments, a heightened emphasis on data security, compliance regulations, and organizational state is being demanded. This has led organizations to prioritize secure cloud storage as they recognize that cloud architecture needs to remain robustly protected. When selecting a cloud storage provider, the two key factors organizations consider are the native data security and protection features offered by that solution as well as its compatibility with third-party applications.
According to the survey the top security concern organizations raise is the lack of experience with cloud platforms or proper security training.
These valuable insights into the challenges associated with managing cloud storage and how businesses have approached their strategies can help other organizations for planning their cloud strategy in 2023 and beyond.
Source: Wasabi
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