Changing Attitudes Toward Public Cloud Storage Adoption

Here are 3 market reports commissioned by Wasabi Technologies, Inc. and conducted by Vanson Bourne.

WW Public Cloud Spend Shows No Fear of Recession

Enterprises are going all-in on cloud storage, with average stored capacity in the public cloud expected to reach 43% of their total storage footprint by 2024, and the vast majority (84%) are increasing their budgets to make that a reality, according to part 1 of Wasabi’s 2023 Global Cloud Storage Index. The series seeks to uncover the changing attitudes toward public cloud storage adoption, the factors that influence storage buying decisions, and the top priorities when it comes to budget, use cases, security, and cloud data migration.

“The world is storing more capacity in the public cloud than ever before, and enterprises are adopting multiple cloud storage providers in an attempt to maximize both performance and cost efficiencies,” said Andrew Smith, senior manager of strategy and market intelligence, Wasabi, and former IDC analyst. “We also gathered important data to inform understanding of new trends: the fact that more than 50% of organizations exceed their budgeted spend on cloud storage; and that many struggle with security due to inadequate training and user experience with cloud storage.”

Enterprises see the value of cloud storage over on-premises storage

• In the last year, 89% of enterprises migrated data from on-premises storage to the public cloud, and 84% of all respondents expect to increase the amount of data they store in the public cloud during 2023.
• More resilient infrastructure (42%), needing to scale (38%), and access to global locations (35%) were major factors driving migration from on-premises to cloud.
• Over half (51%) of respondents cited they use the public cloud to support their critical business applications, like enterprise resource planning and customer relationship management, as opposed to using the public cloud as a backup and archive repository (38% and 41%, respectively)
• When it comes to C-Suite decision makers, 48% cited better performance of cloud over on-premises storage as the top factor driving the migration.

Organizations are not afraid to spend money on cloud storage, but still struggle to manage costs, billing, and fees

• 84% of respondents expect to increase their public cloud storage spend in 2024.
• The leading factors of this increase are IT initiatives like infrastructure migration (56%), business initiatives like digital transformation (45%), and new data security initiatives, including backup/data recovery (44%).
• Although there is willingness to invest in cloud storage, 52% of respondents exceeded their previous year’s budget, primarily due to fees charged by their cloud storage vendor, including data operations, egress fees and API requests.
• In fact, understanding their cloud storage bill was the number one challenge associated with cloud storage migration (40%).
• The survey data also sheds light on one of the industry’s unfortunate truths: a large proportion of storage bills are allocated to various fees. Specifically, respondents said storage fees account for 48% of their total cloud storage bill on average.

“Today’s enterprises are required to be agile, and the insights gained from data lend a competitive advantage,” said Smith. “However, while the perceived value of enterprise data might be limitless, storing and accessing that data, on the other hand, has a very real cost. Unfortunately, the complexity and uncertainty of storage fees are major factors which led more than half of organizations to exceed their cloud storage budget in 2022. This highlights a significant pain point for enterprises, and an opportunity to improve as they assess cloud storage spending for 2023.”

EMEA

Wasabi is releasing Part 3 of its 2023 Global Cloud Storage Index, analysing the key findings from EMEA-based organisations. The series seeks to uncover the changing attitudes toward public cloud storage adoption, the factors that influence storage buying decisions, and the top priorities when it comes to budget, use cases, security, and cloud data migration.

“EMEA is an incredibly important segment of the overall cloud storage market. This global region and market have unique security, data movement, data sovereignty and accessibility requirements,” said Smith. “These unique requirements can add complexity to cloud infrastructure decisions and migration initiatives. Nonetheless, our survey data indicates EMEA is poised to continue expanding both stored volumes in the cloud, as well as their cloud storage budgets, as we move further into 2023.”

According to the survey findings, 83% of EMEA respondents expect to increase the amount of data they store in the public cloud in the next year, and 81% plan to increase their budgets for public cloud storage. Additionally, the survey found that EMEA organisations are prioritising placement of data in cloud (both public and private) environments, as opposed to traditional IT environments. However, many EMEA organisations struggle to manage the fee and cost structures associated with public cloud storage.

EMEA prioritising cloud storage over on-premises storage, but security concerns remain paramount
• 87% of enterprises migrated storage from on-premises to public cloud in 2022, with Germany and the Netherlands exceeding the EMEA average at 98%, and 97% respectively. UK and France came in below the regional average at 78% and 85% respectively.
• 90% of EMEA enterprises expect the amount of data they store in the cloud to remain the same or increase in 2023.
• More resilient infrastructure (43%), avoiding costs on refreshing old or purchasing new hardware (40%), and need to scale resources (38%) were the top three factors driving migration from on-premises to cloud. France stood out from the rest of EMEA respondents, with access to global regions chosen as their top factor (44%)
• When it comes to cloud migration challenges by country, UK and Germany respondents both indicated that meeting compliance and regulatory requirements was their top issue.
• Regarding the specific regulatory requirements on the mind of EMEA respondents: GDPR was far and away the number one choice for UK organizations. France and Germany both ranked ISO standards at their top requirement
• In France 40% of the companies stated that the lack of cloud platform experience/insufficient training is their biggest security concern. UK respondents ranked unauthorised access or insight into one’s data as their top security concern. Germany ranked lack of storage identity and access management policies/tools as their number one cloud storage security concern. And finally, respondents from Netherlands chose lack of native backup, DR, and data protection tools as their primary security concern.
• When it comes to cloud storage vendor selection criteria, EMEA also put security at the top of the list, ranking “data protection, security and compliance features/capabilities” as the number one consideration.
• However, there are important nuances by country. UK respondents indicated price / TCO is their top vendor selection consideration. In contrast, sustainability was the primary vendor selection criteria for France and Netherlands respondents.

EMEA enterprises plan to increase spending on cloud storage, but struggle with managing cost and fees
• EMEA enterprises allocate an average of 14% of their total IT budget to cloud storage, compared to the global average of 12%, and 81% plan to increase their cloud storage budget in 2023.
• IT initiatives (51%), business initiatives (47%) and new data security, backup and recovery requirements (43%) were the top three reasons driving budget increases in public cloud storage over the next 12 months.
• 52% of the EMEA organisations surveyed reported going over budget on public cloud storage spending over the last year, with the UK being the most efficient (only 45% of UK enterprises went over budget).
• Top reasons for EMEA orgs exceeding budget included: storage usage was higher than anticipated (39%); data operations fees were higher than forecast (37%); additional applications were migrated to the cloud (37%); storage list prices increased (37%); higher data retrieval (35%); API calls (31%); egress fees (26%) and more data deletion (26%) fees than expected.
• Overall, EMEA respondents indicate that 48% of their cloud storage bill is allocated to fees, and 51% allocated to storage capacity, on average. Netherlands indicated the highest proportional spend on fees at 51%, UK indicated the lowest at 45%.

“Today’s enterprises are required to be agile, and the insights gained from data lend a competitive advantage,” said Smith. “However, while the perceived value of enterprise data might be limitless, storing and accessing that data, on the other hand, has a very real cost. Unfortunately, the complexity and uncertainty of cloud storage fees can be a major challenge, and a key reason why more than half of organisations exceeded their cloud storage budget in 2022. This highlights a significant pain point for enterprises, and an opportunity to improve as they assess cloud storage spending for 2023.”

AsiaPac

AsiaPac organizations are embracing the public cloud to store fast-growing volumes of data, specifically for backup, archive and DR initiatives, but are hit the hardest by public cloud storage fees compared to their global counterparts, according to Part 2 of Wasabi’s 2023 Global Cloud Storage Index that presents results from 200 IT decision-makers across Australia, Japan and Singapore.

“The AsiaPac market is unique in its ambitions to adopt new technology and implement cloud services to support digital transformation projects,” said Smith. “Even with storage fees from API operations, egress, and data retrievals accounting for over half of APAC organizations’ cloud storage bills, the region still indicated some of the highest forecast growth rates for cloud storage volumes and budgets over the next year.”

APAC organizations capitalize on public cloud storage, and adopt multiple providers
• 85% of APAC companies expect the amount of data they store in the public cloud to grow over the next year compared to global average of 84%
• 87% of IT decision-makers in APAC expect their cloud storage budget to grow in 2023 compared to 84% globally
• 93% migrated storage from on-premises to the cloud in 2022, higher than the global average of 89%
• 61% of APAC organizations use more than one public cloud storage provider, which is higher than global the average of 57%

Australian businesses lead regional forecasts for cloud storage budget and capacity expansion
• 92% of Australian respondents expect the amount of data they store in the public cloud to increase in 2023, compared to Japan (84%) and Singapore (78%)
• 98% of Australian IT-decision makers expect their cloud storage budget to grow in 2023, much higher than the overall APAC average of 87%
• Australian companies allocated an average of 14.4% of their organization’s total IT budget to public cloud storage services while Japan and Singapore respondents had an average budget of 13.3% and 12.2% respectively
• 60% of Australia respondents exceeded their budget expectations for cloud storage last year, the highest among APAC countries

Japan shows high prevalence of cloud storage migration in order to scale beyond on premises limits; but struggles with fees and budgets
• Japan indicated the highest proportional mix of cloud storage billings allocated to fees, at 51%.
• #1 reasons for excessive spend in Japan was higher actual data and storage usage than forecast, combined with higher data operations fees (e.g., cross-region replication) than expected
• The #1 factor driving Japanese respondents to migrate storage capacity to the public cloud is the need to scale resources beyond what they can do on premises (43%)
• However, when it comes to migration challenges, Japan indicated that planned/unplanned downtime associated with the migration process is their #1 issue (40%)

In Singapore, sustainability placed #1 on the rank list of most important considerations when choosing a cloud storage provider
• Respondents ranked sustainability at the top of the list (52%), compared to the APAC average of 43%, and global average of 43%
• 96% of organizations in Singapore migrated storage from on-premises to cloud storage last year, higher than the global average of 89%
• Only 28% of organizations in Singapore exceeded their cloud storage budget last year, compared to the APAC average of 51% and a global average of 52%
• New regulatory and compliance requirements are an important factor driving cloud storage budget growth in Singapore in 2023 (49%), compared to Japan and Australia (both at 35%)

“The APAC segment of the cloud storage market is typically the fastest-growing part of the market, and it has some of the most diversity when it comes to cloud maturity and vendor adoption. Region-specific insights into this market segment are extremely important to our understanding of market direction and end user requirements,” said Smith. “Also of note is the important role sustainability plays in the vendor selection process for APAC organizations, particularly in Singapore, where sustainability is ranked as the most important vendor selection consideration.”