Costs risen by up to 25% for the majority of hyperscaler users

The research of over 500 tech professionals using the hyperscalers, launched during the keynote from Civo CEO Mark Boost at Civo Navigate North America, examined attitudes towards the cost of cloud and how these perceptions have changed in the last 12 months. 

When it came to cost transparency, the research found that 42% of businesses using the hyperscalers cannot easily predict their cloud bill each month, and over a quarter (28%) reported receiving an unexpectedly large bill for cloud services.

At AWS Reinvent in 2012, then AWS CEO Andy Jassey promised that thanks to AWS’s scale, it could pass “savings onto customers in the form of lower prices”. Compare that to Civo’s research, where almost half of the respondents said they believe that the cost of cloud today is too high. And 37% went further, backing that the cloud has failed to live up to its promise of cost-effectiveness, indicating the impact that spiralling costs are having on users. 

This uncertain status quo has consequences for the future of cloud. Fifty-seven percent of hyperscaler users reported they are now taking actions to manage or reduce their cloud service costs. The most popular solution was internal cost-saving strategies or practices (79%), followed by deploying software tools for cost optimisation (58%). A significant segment (28%) admitted to hiring consultants specialized in cloud cost management.

And for an increasing proportion of businesses, staying on the cloud may no longer be viable. Civo’s research found 47% of businesses are considering moving away from the cloud. Analysts at IDC highlight the scale of the shift underway, revealing that 71% of users expect to move all or some of their workloads from the public cloud back to private IT environments over the next two years.

Mark Boost, CEO of Civo, commented: “The cloud is broken. That is the stark truth we all, as an industry, need to face up to. The hyperscalers have not delivered on their lofty promises of low costs at scale that they set out more than a decade ago. Instead, users are left with high prices, overly complex solutions, and ‘black-box’ proprietary tech that make it very difficult to move anywhere else. When you are in, you are in! This situation can be hugely damaging, especially for smaller businesses, making it very difficult for them to build a bespoke, affordable approach to cloud that suits their needs.

“But it doesn’t have to be this way. The tech sector still has time to take a different, more responsible path. Our focus should be on fairness, transparency, and the customer’s experience at every turn - not the shareholders’ bottom line. Cloud should be about empowering IT teams to experiment and innovate using the technology, finding the services they need, and paying a fair price for them. With this new approach, the cloud can become what it always had the potential to be: an incredible engine of equity in technology, levelling the playing field and ensuring anyone can access cutting-edge tech to innovate and build a successful business. I firmly believe that the future of the tech sector must be about fairness and social responsibility, giving back to users and building a better world for future generations.”