As users demand more robust and complex applications, cloud providers must deliver more effective and resource-intensive services, consequently increasing expenses. In addition, new technologies like AI and machine learning require substantial processing power, pushing the cost of cloud computing even higher. 

Simultaneously, the dynamics of data storage are also contributing to the rising trend in cloud computing costs.  With the exponential growth in data generation, the demand for storage has surged.  Despite technological advancements, the sheer volume of data needing storage escalates cloud storage pricing.  Moreover, more businesses are transitioning to the cloud for their data storage needs, further intensifying the demand and driving prices upward.  Hence, while cloud computing offers numerous advantages, the rising costs of computing power and data storage necessitate careful consideration and strategic planning for businesses looking to make the most of this technology. 

With a growing number of enterprises grappling with the surge in cloud service costs, it's critical to understand the factors underpinning this trend.  The sudden price escalation, the changing geopolitical landscape, and the transforming economics of computing are all reshaping how businesses manage their cloud expenses – and will leave many businesses searching for cost savings. 

The impact on Google Cloud costs 

Practical examples of cloud inflation reveal the economic and political forces driving these price alterations.  Google Cloud recently announced a significant increase in cloud storage costs, varying between 25 to 50 percent.  In addition, costs for operations (API calls to the storage data plane) have surged by an alarming 100 to 400 percent, predominantly affecting multi-region cold line storage.   

Object storage data transfer costs have shifted from free to two cents per GB, a seemingly small figure that could amount to hundreds or thousands of dollars per month for high-volume microservices architectures. For businesses tracking rising cloud costs, tools like the Google Scraper API can automate the monitoring of price changes on platforms like Google Cloud, allowing businesses to proactively adjust their cloud strategies and investments. 

The impact on AWS cost 

Amazon Web Services (AWS), the world's leading public cloud platform, provides a vital example of this trend with its spot instances feature. This function allows customers to rent EC2 instances at a fraction of their list price, offering a heavy discount, sometimes over 80 percent.  However, there's a caveat; AWS can terminate and reclaim these instances with just two minutes' notice.   

Many customers opt to avoid this unpredictability, despite the enticing value proposition.  AWS data shows that prices have risen significantly since 2022's outset.  Given supply and demand principles, it's reasonable to infer that AWS is grappling with replenishing supply amid strong demand.  

The impact on Azure costs 

As of April 1st, 2023, Microsoft is implementing a price increase for its cloud services, significantly impacting multinational, UK, and EU enterprises. This change will affect all Microsoft cloud offerings, including Azure, Dynamics 365, and Microsoft 365. The increase rates will vary by region and currency, with Swedish Krona seeing a 15% hike, Norwegian Krone and Danish Krone increasing by 11%, Euro increasing by 11%, and British Pound by 9%. 

As the cost of cloud storage escalates, many organizations find their budgets strained.  According to recent survey data, 69% of respondents reported that storage costs represent over one-quarter of their total cloud expenses.  Moreover, for 23% of respondents, this figure climbs to over half of their total cloud costs, underscoring the rising economic impact of cloud storage. 

The survey further revealed the absence of a dominant strategy when deciding which data to store in the cloud and which to retain in on-premise data centers. Instead, it appears that organizations are diversely split in their approaches.  A third of the respondents (33%) rely on the knowledge and expertise of their internal teams to make these decisions.  An equivalent percentage opts for automated solutions, utilizing third-party tools to aid their storage strategy.  Meanwhile, 31% of the respondents tend to follow recommendations from their Cloud Service Provider (CSP). 

These findings highlight the complex, multifaceted nature of decision-making strategies within cloud storage management, with no single approach reigning supreme.  As costs continue rising, enterprises may need to re-evaluate their current storage strategies to maintain cost efficiency and business effectiveness. 

Grasping the Return on Investment (ROI) for a Software as a Service (SaaS) solution should be straightforward, yet the reality has proven complex for many enterprises.  Ideally, ROI projections would model anticipated returns against present and ongoing investments.  Increasing cloud computing and storage costs make these calculations more complex because vendors' efficiency at generating and storing communications varies widely.   

To accurately forecast the investment, businesses must comprehend how their SaaS CCM solution is monetized and the cost per communication involved in generating and storing documents.  If the pricing is based on metrics beyond the user's control, routine activities—such as embedding fonts, incorporating graphics, and including attachments—can inadvertently escalate communication costs. 

Moreover, graphic designers failing to employ optimal image compression can induce substantial cost overruns if the contract employs a communication file-size billing metric.  This issue is challenging to manage because the team incurring the cost is typically oblivious to their SaaS CCM solution's specific terms and conditions.  It may take an extended period before the behaviour driving an upcharge is correlated to the costly activity in an audit. 

While evaluating solutions, confirming that all your applications can be delivered efficiently is crucial.  Despite the virtually limitless scalability of cloud technology, specific SaaS solutions may necessitate on-premises appliance options, which share a different limitless scalability.  Therefore, if your ROI projection hinges on standardizing CCM technology, challenge potential vendors with your most demanding applications during peak periods, and ensure you evaluate the efficiency of each vendor’s engine and output – to minimize per communication cloud computing and storage costs over time. 

Choosing the right vendor partner for cloud-based deployments of communication projects is crucial as the market shifts towards more efficient and comprehensive SaaS solutions. Organizations must ensure that costs for cloud storage services and cloud backups are predictable and manageable.  Key evaluation criteria should include:  

• The efficiency of the composition engine
• a real-time dashboard that compares actual versus projected usage
• regular cost reporting with project attribution
• metrics to gauge communication file size to better manage storage space
• clear tracking of actions that add extra costs 

Quadient provides the most efficient production engine and smallest file sizes in the industry – allowing customers to more efficiently scale their cloud applications while also balancing reliable solutions that balance functionality, storage capacity, and security.