SMEs plan cutbacks to combat rising cloud costs
Wed 13 Sep 2023
With a 10% increase in cloud costs expected this year, a third of SMEs plan to reduce the amount of data they store in the cloud. A further 24% will expect to reduce the number of cloud services they use.
Almost two-thirds (62%) of UK SMEs that use cloud computing will take steps to combat these rising costs by the end of 2023,
According to Beaming’s Making the cloud work for UK businesses report, UK SMEs spent an average of almost 2% of their turnover on cloud services in 2022. This amounts to more than £4 billion across the whole population.
While more than a quarter (27%) of SMEs initially adopted cloud to reduce computing expenditure, companies expect a 10% increase in the cost of cloud services during 2023.
Several major cloud providers have introduced double-digit price increases for services used by SMEs this year.
“While the cloud has delivered many benefits to businesses, the cost of cloud has been creeping up for some time now, and at some providers, that creep is starting to look unjustified to businesses dealing with wider inflationary pressures,” said Sonia Blizzard, Managing Director at Beaming.
Facing increases in the cost of cloud computing that far exceed inflation, just one in five (20%) SMEs using cloud said they would absorb the extra costs.
“Many SMEs, some of which rushed to the cloud to support remote working during the pandemic, are questioning the value of these services for the first time and taking action to get on top of those cost increases,” added Beaming.
More than a quarter (21%) of SMEs said they would downgrade some subscriptions to basic services.
One in six (17%) plan to move data or applications from the cloud to on-premise systems.
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