Cloud storage cost overruns are increasing
Cloud storage should be predictable, but it’s not. Companies are burning through budgets because they don’t see the hidden costs upfront. Data storage is cheap, until you need to use it. AI-driven workloads are pushing data consumption through the roof, and enterprises are realizing too late that retrieving, processing, or moving that data comes with a steep price.
Cloud providers structure pricing to encourage adoption, but once you’re in, accessing data becomes the real cost driver. A report by Wasabi Technologies found that 62% of enterprises faced cost overruns in 2024, a sharp increase from the previous year. A quarter of those companies described their overruns as massive.
The issue? Data egress fees. These are charges imposed when moving data out of a cloud provider’s storage system. Businesses don’t think much about these costs until they start using their data at scale, like training AI models or running large analytics workloads. The more important cloud storage becomes, the more unpredictable it gets.
Rising cloud costs are disrupting business operations
Unpredictable cloud costs are slowing down innovation. Companies plan for cloud spending, but unexpected fees force them to rethink projects, delay timelines, or even halt AI and data initiatives entirely. Over half of enterprises (56%) reported that cloud storage expenses caused business delays.
Cloud storage should accelerate progress, not stall it. But many companies don’t fully understand the hidden costs, data retrieval fees, API calls, and networking charges that kick in when scaling operations. These costs aren’t well-documented or easy to predict, which means companies often discover them only after projects are underway.
“In an economy driven by data, the last thing an enterprise needs is a financial barrier between its teams and the information they need to operate effectively.”
Cost structures for cloud storage are misleading
At first glance, cloud storage pricing looks simple. Providers offer tiered storage models, cheap for data you don’t touch, expensive for data you do. The problem? Most enterprises misjudge how often they’ll need access to their data.
Cloud providers give options:
- Hot storage: Expensive but fast for frequently accessed data.
- Cold storage: Cheaper but slow, with retrieval costs.
- Deep archive: Extremely cheap, but costly and time-consuming to retrieve.
Companies often opt for cold storage, thinking they won’t need the data regularly. But then, AI projects, audits, or unexpected business demands require them to pull that data, and suddenly, they’re hit with egress and retrieval fees they didn’t anticipate.
According to Wasabi Technologies, only 51% of a company’s cloud bill is for actual storage. The rest goes to hidden costs, networking charges, API requests, and access fees.
Cloud providers are reducing some fees amid regulatory scrutiny
Cloud providers have noticed the backlash. Google Cloud, AWS, and Microsoft, the dominant forces in cloud storage, have started reducing some egress fees. Not because they want to, but because regulators and customers are pushing back.
There’s a reason these hyperscalers control two-thirds of the global cloud storage market. They’ve built systems that lock enterprises in with attractive pricing, then charge them heavily when they need to move data. The scrutiny from regulators is changing that.
Google Cloud led the way by eliminating some egress fees early last year, and AWS and Microsoft followed suit. But the changes are minimal. The core issue remains: pricing models still favor storing data cheaply while making retrieval costly.
“As enterprises demand more flexibility and cost transparency, hyperscalers will have to continue adjusting.”
Enterprises are largely satisfied with cloud storage, until they need data
Most enterprises don’t complain about cloud storage itself. In fact, 89% of businesses say they’re satisfied with their cloud storage providers. But satisfaction drops when they need to access and use that data. That’s when pricing complexity becomes a major frustration.
Companies treat cloud object storage like a dumping ground for unused data. But AI, machine learning, and analytics are changing that. Businesses are discovering that data once considered inactive is now invaluable. When they go to retrieve it, they run into retrieval costs they didn’t expect.
Billing complexity is the top frustration for enterprises. Nearly 40% of businesses cite unclear fee structures as a problem. They’re not wrong. Cloud providers don’t make pricing transparent, and when companies scale their data operations, they find themselves dealing with unexpected costs.
This isn’t sustainable. Cloud storage should enable data-driven innovation, not create barriers. Enterprises that want to control their costs need to demand better transparency from cloud providers or look for alternatives that offer cost-predictability without sacrificing accessibility.
Final thoughts
Cloud storage should be an asset, not a liability. Right now, its pricing structure is deliberately opaque, favoring hyperscalers while leaving enterprises with unpredictable expenses. The companies that understand how costs are structured and push for change will be the ones that maintain control over their cloud budgets while staying competitive in the AI-driven economy.
Key executive takeaways
- Cloud storage costs are increasingly unpredictable: Hidden fees from data retrieval, API calls, and egress charges are driving unexpected budget overruns, with 62% of enterprises exceeding their cloud storage budgets in 2024. Leaders should reassess cloud cost structures to prevent financial strain.
- Uncontrolled storage expenses are delaying business growth: Over 56% of enterprises report that surprise cloud costs have stalled critical projects, slowing innovation. Decision-makers must demand clearer pricing models and cost forecasting tools from providers to maintain operational momentum.
- Storage pricing is structured to appear cheap but becomes costly with data movement: While 51% of cloud costs go to basic storage, the real expenses come from accessing data. Enterprises should regularly audit storage tiering strategies to minimize retrieval and transfer fees.
- Regulatory pressure is forcing cloud providers to adjust pricing: Google Cloud, AWS, and Microsoft have begun eliminating some egress fees, but cost opacity remains. Executives should use this competitive shift to negotiate better terms and push for pricing transparency.
- Satisfaction with cloud storage drops when data access is needed: While 89% of enterprises are satisfied with their providers, 39% cite billing complexity as a major issue. Leaders should prioritize providers with predictable cost structures and scalable access models to avoid unexpected financial burdens.
