Cloud storage costs are inflicting a serious financial toll on European businesses, according to new research from Wasabi Technologies, but many enterprises are biting the bullet and ramping up investments regardless.
Analysis from the firm revealed that over half of EMEA firms exceeded their budgeted spend on cloud storage across 2023, but in the year ahead are looking to expand storage portfolios.
Fees associated with cloud storage options are a particular pain point for many firms, the study found, with a significant portion of respondents spending half - or more - of their budgets on usage fees and data access rather than direct storage capacity.
EMEA businesses typically spent more on cloud storage fees than those based in other regions, according to the study, with the global average spend on cloud storage budgets absorbed by fees reaching 47%.
Andrew Smith, senior manager of strategy and market intelligence at Wasabi Technologies, said expanding public cloud budgets is a growing trend across the globe, and that the EMEA region displays a particular appetite for ‘cloud-first decision making’.
“Organizations worldwide are increasing their use and budgets for public cloud storage solutions, and Europe is no exception," Smith said.
“Like the rest of the world, European cloud storage users continue to struggle with storage fees, but despite this, the region continues to show a healthy preference towards “cloud-first” decision making when it comes to IT services adoption.”
The report specifically highlighted rapid growth in artificial intelligence (AI) adoption as a key factor in both surging cloud costs and efforts to expand budgets.
96% of EMEA respondents said they believe they will have to contend with new cloud storage concerns associated with AI and machine learning.
Of these concerns, the top ranking worries include demanding requirements to store data across a wider range of locations (46%), implementing robust mechanisms for data backup, protection, and recovery (43%), and new or expanding storage migration/movement requirements (42%).
Europe’s multi-cloud mentality
Wasabi’s report indicated that Europe is marginally ahead of global markets in terms of their commitment to a ‘cloud-first’ strategy for IT services adoption.
This means organizations in the region are less inclined to adopt private cloud or on-premises IT infrastructure.
The survey revealed that 44% of firms in Europe were pursuing a cloud-first approach compared to the global average of 42%. This difference was attributed to particularly strong commitments to cloud-first IT strategies in Germany (51%) and France (47%).
In addition, the study also recorded the importance of interoperability between cloud services for EMEA companies when choosing cloud storage providers.
Organizations in the region reported they prioritize integrations with existing third-party applications such as Salesforce and Veeam (43%), security and compliance features (40%), and sustainability (39%) when assessing which cloud provider to go with.
Wasabi asked respondents for the driving factors behind multi-cloud adoption in the region, 48% of whom revealed they are using multiple providers in a bid to avoid vendor lock-in.
Jon Howes, VP and GM of EMEA at Wasabi Technologies, noted the global trend toward off-prem cloud storage solutions is being driven by the AI explosion, but emphasized a growing dissatisfaction with exorbitant fees and cloud lock-in among EMEA companies.
“Wasabi’s annual research once again shows that progress towards off-premises cloud storage solutions is a direction nearly all enterprises are taking – and one that’s only made more necessary by the adoption of AI/ML applications”, Howes explained.
“However, the ever-growing frustration with unnecessary fees and vendor lock-in, as highlighted by the investigation by the UK’s market watchdog, provides a navigational challenge for cloud-first organizations in EMEA.”
