Key Strategies for Mitigating Cloud Storage Costs

In a hybrid cloud world, IT leaders continue to struggle with managing and optimizing cloud storage costs. There are many reasons behind this challenge, but repatriation has been on the rise in recent times after rushed and often poorly planned cloud migrations during COVID-19. A new wrinkle is that IT prices across the board are going up, driving a nearly 10% increase in spending this year, according to Gartner.

Understanding and managing the requirements and cloud storage pricing shifts is a critical component of reducing cloud-based and unnecessary spending. Attaining deep visibility on your unstructured data across all storage so that you can make optimal cloud decisions is another key piece.

Factors Driving Cloud Storage Cost Overruns

Several factors contribute to cloud storage cost overruns—from inadequate planning and understanding of cloud pricing models, which can lead to overprovisioning or misaligned spending, lack of insight into data usage and requirements, and spotty cost monitoring. The most common culprits are:

• Lack of sophisticated data management – In many cases, businesses have not fully assessed their data storage costs and needs or properly optimized their cloud usage, primarily because of unstructured data, which makes up at least 80% of all data today. Moving large volumes of data to the cloud without understanding access patterns or usage trends can lead to an inefficient cloud strategy. Furthermore, cloud providers offer a variety of storage classes, each with different cost implications. Without careful planning, businesses may allocate data to the wrong storage tiers, leading to unnecessary expenses. It’s imperative to leverage all the cloud storage tiers– from high-performance to glacial storage – to optimize your costs.

• Egress fees and cross-region transfers – Egress fees are another significant cost driver. These fees are charged when data is transferred out of the cloud to external services or across regions. Organizations often overlook the fine print of cloud providers’ pricing models, which can result in surprise charges when large amounts of data are moved or recalled. Cloud providers may offer lower rates for transfers within the same region or ecosystem, but moving data outside of this framework can quickly become expensive.
• Lack of data lifecycle management strategies – Still today, too many large organizations managing multiple petabytes of data are storing most or all of it on expensive primary storage. That data is backed up or replicated typically 3X for disaster recovery requirements, which constitutes the lion’s share of the storage budget. Backing up outdated and duplicate data and storing petabytes of cold data on expensive, primary storage is leaving a lot of money on the table. Also, data moved to the cloud might be on a high-cost file tier for relatively inactive data. A one-size-fits-all data storage strategy easily results in spend that is 70% higher than necessary.

See also: Is Hybrid Cloud the Way to Deal with Public Cloud Costs?

How to Better Predict and Manage Cloud Storage Costs

To address these challenges, IT should consider a more proactive and data-driven approach to cloud storage management. Here are several strategies that can help organizations better predict and manage their cloud storage expenses:

• Collecting new metrics – One of the first steps before you move any data to the cloud is understanding the full scope of data across your storage environments. Gathering detailed metrics such as data volumes and predicted growth rates, access trends, security and compliance requirements, and common types and sizes of your data delivers the insight you need to make the right decisions. Tracking data by ownership (i.e., which departments are generating the most data) can help organizations work with business heads to optimize costs. For example, large unstructured data files—think medical images, research files, and video—that are infrequently accessed can often be moved to cheaper storage tiers, reducing overall storage costs.

• Implement data tiering and migration plans – Effective data lifecycle management is crucial to minimizing storage costs. Once an organization has a better understanding of its data usage, implementing data tiering strategies becomes essential. Data tiering involves moving less critical data to lower-cost storage solutions, such as cold or archival storage. This can dramatically reduce storage and backup costs for inactive or infrequently accessed data. Additionally, organizations should consider storage-agnostic solutions that allow for direct migration of data between clouds and between storage platforms without rehydrating data—which requires buying more capacity in the original storage to house the data you moved to the cloud before you can move it again.

• Engage departments in data ownership – Many departments are unaware of the data they generate and its associated costs. By presenting data analytics to department heads and teams, IT can help them understand their storage consumption and its impact on the bottom line. This awareness can lead to better decision-making regarding data retention, usage, and archiving practices, ultimately helping cut unnecessary storage costs.

Adapting for the Future of Cloud Storage Pricing

Cloud storage pricing trends are likely to evolve as cloud services become more flexible and complex. Providers will continue to offer scalable storage options with varying pricing models, but the complexity of pricing could increase, particularly with pay-as-you-go features and new charges for rehydration or egress fees. To stay ahead of these changes, businesses should adopt flexible, automated data tiering strategies, regularly review their cloud provider’s offerings, and negotiate better rates. A hybrid cloud approach, which combines on-premises and cloud storage, remains a flexible and cost-effective way to manage storage across varying needs.

By gaining better visibility into data usage, implementing smart data management strategies, and engaging with cloud providers, IT can mitigate cloud storage costs while still delivering upon business requirements for access, performance, and compliance.