Cloud storage costs are taking a serious financial toll on European businesses, according to new research from Wasabi Technologies, but many companies are making the effort and increasing investments anyway.
The company's analysis revealed that more than half of EMEA companies exceeded their budgeted spending on cloud storage in 2023, but in the coming year they are looking to expand their storage portfolios.
Fees associated with cloud storage options are a particular problem for many businesses, the study found, with 92% of respondents spending half (or more) of their budgets on data access and usage fees in direct storage capacity location.
According to the study, EMEA businesses typically spend more on cloud storage fees than those in other regions, 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 around the world, with the EMEA region showing a particular appetite for “business-centric decision making.” Cloud”.
“Organizations around the world are increasing usage and budgets for public cloud storage solutions, and Europe is no exception,” said Smith.
“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 for cloud-first decision-making when it's about the adoption of IT services.”
The report specifically highlighted the rapid growth in artificial intelligence (AI) adoption as a key factor in both rising cloud costs and efforts to expand budgets.
96% of EMEA respondents said they believe they will have to deal with new cloud storage concerns associated with artificial intelligence and machine learning.
Of these concerns, the highest-ranking concerns include demanding requirements for storing data in a broader range of locations (46%), implementing robust mechanisms for data backup, protection and recovery (43%), and storage migration/movement requirements new or expanding. (42%).
Europe's multi-cloud mentality
The Wasabi report indicated that Europe is slightly ahead of global markets in terms of its commitment to a “cloud-first” strategy for the adoption of IT services.
This means that organizations in the region are less inclined to adopt a private cloud or on-premises IT infrastructure.
The survey revealed that 44% of companies in Europe were adopting a cloud-centric 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%).
Additionally, the study also recorded the importance of interoperability between cloud services for EMEA businesses when choosing cloud storage providers.
Organizations in the region reported prioritizing integrations with existing third-party applications such as Salesforce and Veeam (43%), security and compliance features (40%), and sustainability (39%) when evaluating which cloud provider to choose.
Wasabi asked respondents what the factors are driving multi-cloud adoption in the region, with 48% of whom revealed that they are using multiple vendors in a bid to avoid vendor lock-in.
Jon Howes, vice president and general manager of EMEA at Wasabi Technologies, noted that the global trend toward off-premises cloud storage solutions is being driven by the explosion of AI, but emphasized growing dissatisfaction with exorbitant fees and cloud dependence among EMEA companies.
“Wasabi's annual research shows once again that progress towards off-premises cloud storage solutions is a direction that almost all companies are taking, and that becomes more necessary with the adoption of AI/ML applications “Howes explained.
“However, growing frustration with unnecessary fees and vendor lock-in, as highlighted by research from the UK market watchdog, represents a navigational challenge for organizations prioritizing cloud in EMEA”.
