Everyone wants to reduce their cloud storage costs. However, most organisations approach it back to front: negotiate with vendors or shop around for cheaper platforms before understanding what they’re really paying for.
Here’s the truth: cloud storage costs are directly related to how much data you’re storing. Before you can reduce costs, you need to understand your data.
Start With Your Data, Not Your Bills
Finance teams see cloud storage as a monthly spend that keeps going up. IT looks at utilisation charts that trend upward. Everyone will agree something needs to change, but nobody knows where to start.
The problem? You’re looking at costs as a symptom without understanding the cause that’s driving them.
Before you can optimise your spending, you need to take a picture of your data estate. Not just “how many terabytes,” but what’s consuming your capacity:
- Is it active project data that users access daily
- Is the data old and aging out from completed projects just sat on expensive storage
- Are there duplicate files scattered across different systems
- Is there any ROT data (Redundant, Obsolete, Trivial) that should have been deleted years ago
To give a conservative estimate: at least 20% of your data is either duplicate or ROT data. For most organisations it’s closer to 40%. That means one-fifth to two-fifths of your cloud storage budget is paying for stuff you don’t need.
The Cost of Doing Nothing
Ignoring the problem doesn’t make it go away. It compounds it.
Runaway cloud storage spend becomes a budget black hole. What began as a planned £5,000 monthly spend becomes £15,000, then £30,000 when you add in overages and hidden costs. Your operating costs increase while the competitors who have figured out data management can run leaner operations.
For the record, this is not an IT efficiency problem. It’s a competitive disadvantage to your entire organisation. Every penny wasted on storing duplicate files or obsolete data is money not invested in your sales, product development or marketing teams that drive revenue.
Group Your Spending: CapEx vs OpEx
Once you have a picture of what data you have, the next step is to understand how you’re paying for it. Cloud storage costs fall into two categories:
CapEx spend – usually covers on-premises or co-lo hosted infrastructure like NAS systems. You make a capital investment upfront, you amortise the cost over a number of years. For this type of storage, calculating cost is easy: apply a simple $/TB based on your total investment divided by the usable capacity you have.
OpEx spends – this where cloud storage costs can get complicated. You have monthly consumption costs for AWS, Azure, Google Cloud, or SaaS platforms like Box and Dropbox. They all vary, and sit on your P/L as ongoing operational expenses.
And there’s one more surprise… OpEx cloud storage costs aren’t just a simple $/TB.
The Hidden Costs That Destroy Your Budget
Cloud providers always lead with “per-gigabyte pricing”, but the real costs come later on down the line. Along with storage fees, you need to consider Egress charges (which are much more than the storage cost). API requests nickel-and-dime you with every access. For archive classes there are usually minimum retention periods that lock you into paying for storage even after you’ve deleted the data. Plus Retrieval fees for certain storage classes based on moving data between storage tiers.
Realistically, to get an accurate picture of your costs, you should be grouping your spends by supplier (AWS, Azure, etc.) and calculate a true $/TB cost that includes all these factors.
Where Your Money Is Actually Going
Now that we have both pieces: a complete picture of your data, and an accurate cost per storage type; the usage (or waste) becomes obvious.
If we multiply data volume by cost per TB across each storage platform, you can see exactly whether you are bleeding money:
- A 50TB three-year-old project with data sitting on a premium NAS?
It might be costing £5,000 monthly when it could live in S3 Glacier for £50 - Duplicate files that are consuming 200TB sitting on both Box and OneDrive?
You’re literally paying twice for the same data - ROT data that’s eating 20-40% of your storage budget?
Move it to archive tiers or delete it entirely
Organisations who implement proper unstructured data management usually see between 25-35% cost reduction within the first year. We’re not talking about negotiating better rates or switching vendors, this is purely from putting data in the right place and eliminating waste.
Think Like You Manage Personal Subscriptions
Reducing cloud storage costs is pretty much the same as auditing your streaming subscriptions.
If you review your monthly subscriptions and realise you’re paying for four different video services when you only actively use two, you probably forgot to cancel the ones you started on a free trial but then rolled into a monthly cost.
The key thing is that first you need to look at what you’ve got. And pay attention to what that means in monetary terms.
The same logic applies to cloud storage: you might have different platforms serving overlapping needs – perhaps premium storage tiers with rarely-accessed data, archive storage paying retention fees for data you should have deleted.
The solution isn’t always cutting services. It’s right-sizing them. Keep what you use, eliminate the redundant waste.
But first you need visibility. You need to take a picture of what you’ve got.
Simple Strategy, Easy Execution
The strategy is simple: understand your data, calculate true costs, optimise its placement.
With the right unstructured data management platform, execution becomes easy too. By unifying visibility across all storage platforms, having accurate cost modeling calculations that account for hidden fees, and an ability to move data where it needs to be – the outcome can be achieved without complex scripting or consultant engagements.
Without proper tooling, you’re left to do things manually across multiple storage platforms and thousands of projects. That’s just not practical, which is why most organisations just keep paying increasing bills year after year.
The alternative is continuing to pay for unmarked boxes in an increasingly expensive digital warehouse, watching your operating costs climb while competitors optimize their way to leaner operations.
Choose visibility over blind spending. Your bottom line depends on it.