The results from Wasabi’s 2024 Cloud Storage Index (CSI) survey are in, and this year we’ve gathered some insightful data points on the cloud storage market. The 2024 Cloud Storage Index covers topics specific to cloud storage data growth and budgets, service billing and fee challenges, user satisfaction, vendor selection, and the key drivers and challenges associated with cloud storage for AI/ML adoption. 

Before we jump into the most important findings, and the “five data points you need to know” from the 2024 Cloud Storage Index, here’s a little background on the research process and survey sample: 

• This is the second consecutive year Wasabi has produced the Cloud Storage Index 

• Survey work is fielded and managed by Vanson Bourne, and the results are analyzed by Wasabi’s strategy and market intelligence team 

• This year 1,200 respondents participated in the online survey, all of whom were qualified based on their role, background, and level of involvement in their organization’s public cloud storage purchase process.  

• Respondents use a range of cloud infrastructure and storage services (not just Wasabi). 44% of respondents have been using public cloud storage services since 2020, 56% adopted public cloud storage prior to 2020. 

• Respondents span North America, EMEA, and APAC regions, with country representation including (but not limited to) Japan, UK, Germany, Canada, India, and South Korea 

• Respondents span all major industry verticals, including (but not limited to) healthcare, finance, media & entertainment, education, managed services providers, state/local government, and federal government.  

Finding #1: The cloud storage market is poised for growth in 2024​

Market growth for the cloud infrastructure-as-a-service (IaaS) segment as a whole (the combination of compute, networking, and storage services) slowed down in 2023. Most leading hyperscalers posted contracting growth rates throughout the year and lamented cost consolidation measures as one of the key reasons. The slowdown in growth was consistent enough that analyst firm Gartner revised down its IaaS forecast for 2024, from $195 billion to $182 billion.

For anyone watching the market, the next logical question becomes: how will this slowdown impact cloud storage services? The Cloud Storage Index provides some valuable data to help inform this question:

• 93% of respondents say they expect their cloud storage capacity to increase in 2024, and;

• 90% of respondents say they expect their cloud storage budgets to increase in 2024

High rates of both storage budget and capacity increase are impressive, but equally important are the year-to-year comparisons to 2023. Data growth increase is up 9 points compared to 2023, and budget increase is up 6 points from 2023. Overall, these data points provide a confident outlook for cloud storage data growth and budget expansion in 2024 and should serve as a positive market indicator for the year ahead.

Finding #2: The cloud storage market has a fee problem

Anyone familiar with the cloud infrastructure market knows usage fees for compute, storage, and networking exist, but there is a significant lack of understanding when it comes to accurately measuring their impact. This lack of understanding is partly due to the complexity and granularity of many of these fee structures and the fact that it is nearly impossible for some organizations to create an accurate, high-level picture of service billing across their entire organization, and fee cost breakdowns at the individual service and account/subaccount levels.

The Cloud Storage Index attempts to shine a light on cloud storage billing practices by providing a measured breakdown of average billing structures in terms of storage capacity vs storage usage fees. For two year’s in a row, our survey respondents have shown in glaring detail that the market has a fee problem. To be precise: 47% of public cloud storage user billing is attributed to fees, not storage capacity.

Unfortunately, there’s more bad news: it turns out that “egress” fees for moving your data out of a specific public cloud environment or moving data among regions within the same public cloud – which are one of the most recognized and talked about fees in the IaaS industry – are just the tip of the iceberg. When we asked respondents to rank various storage fees and their impact on cloud storage budgets, egress came in last, below API call fees, data operations fees, data retrieval fees, and data deletion fees.

Finding #3: The cloud storage market benefits from extremely high satisfaction

This year the Cloud Storage Index asked about user satisfaction. Interestingly, 90% of respondents say there are “satisfied” with their cloud object storage solution. This result is surprisingly high. For context: SaaS companies typically set target goals for satisfaction within the 60% to 80% range – making it impressive that our respondents returned such a high rate of satisfaction beyond this range.

We believe the high rate of satisfaction is a reflection of the inherent ease-of-use and simplicity of today’s cloud storage services, and their ability to act as a seamless ingredient in modern ​IT infrastructure and application ecosystems. Put simply: choosing a cloud storage service means organizations don’t need to manage hardware and disks, negotiate system refreshes, or worry about maintaining the performance/accessibility of their storage systems and networking topology. Since cloud services providers take on all of the tasks related to storage hardware provisioning, management, availability, and resiliency, IT professionals can shift their time and people to higher value tasks. In our opinion, this is one of the major contributing reasons to the cloud storage market’s high satisfaction rate. We did ask a follow-up question about the reasons for user dissatisfaction. The #1 reason organizations are not completely satisfied with their public cloud object storage service is pricing.

Wasabi context: we ran a separate survey of 107 Wasabi customers to gain a better understanding of their level of satisfaction. 92% say they are “satisfied” with their use of Wasabi. Likert scaling for satisfaction was identical in both surveys.

Finding #4: Artificial Intelligence (AI) and Machine Learning (ML) adoption will create new infrastructure and storage challenges

To no one’s surprise, 99% of respondents in the 2024 Cloud Storage Index say that their organization plans to adopt or has already adopted AI/ML applications and/or services. The hype around this technology reached fever pitch in 2023 thanks to the popularity of generative AI applications. We believe AI/ML adoption will catalyze exciting, innovative infrastructure change, but it will also create significant challenges. Industry analysts are giving the same warning:

• McKinsey believes only 36% of organizations have deployed ML past pilot stage​

• Gartner says only 54% of AI projects make it to production​

• IDC has uncovered that many organizations struggle to manage enterprise data foundational to Generative AI, with 24% of organizations saying they do not trust their data​ and 29% reporting issues with data quality

This year, the Cloud Storage Index uncovered some of the key cloud storage-related concerns organizations are thinking about when it comes to their AI/ML adoption, including:

• 49% of respondents say requirements to storage data across a wider range of locations (e.g., core data centers and edge/remote locations) will be a top cloud storage concern related to AI/ML workload adoption

• 44% of respondents say new or increasing storage migration/movement requirements (including hybrid or multicloud storage) will be a top cloud storage concern related to AI/ML workload adoption

• 43% of respondents say addressing new data security and compliance requirements will be a top cloud storage concern related to AI/ML workload adoption

Finding #5: Organizations care about sustainability when choosing a cloud service provider

For two years in a row, we’ve asked respondents to rank their most important considerations when it comes to choosing a cloud storage service provider. The top three choices have remained the same for both years:

1. 40% of respondents say integration with specific third-party applications/platforms (e.g., Veeam) is an important consideration

2. 38% of respondents say native data protection, security and compliance features/capabilities (e.g., immutability, replication, disaster recovery) is an important consideration

3. 38% of respondents say sustainability (in terms of infrastructure architecture, service provider commitments, or built-in tools for things like carbon footprint calculation) is an important consideration

Last year, we were surprised to see sustainability among the top three reasons driving vendor selection. This year sustainability remained in the top three and, when we looked at the rounded numbers, was technically tied for #2 with native data protection in terms of selection rate, meaning it gained ground in the rankings compared to last year when sustainability was ranked a more distant third.

This result reflects the fact that sustainability and ESG initiatives continue to grow in importance within many enterprises. Many organizations begin with initiatives to accurately measure the carbon footprint of their IT solutions and services, in order to develop a baseline measurement that they can then improve upon over time. Accurate measurements of carbon emissions are also increasingly important due to potential regulatory requirements.

For two years in a row, we’ve asked respondents to rank their most important considerations when it comes to choosing a cloud storage service provider. The top three choices have remained the same for both years:

1. 40% of respondents say integration with specific third-party applications/platforms (e.g., Veeam) is an important consideration

2. 38% of respondents say native data protection, security and compliance features/capabilities (e.g., immutability, replication, disaster recovery) is an important consideration

3. 38% of respondents say sustainability (in terms of infrastructure architecture, service provider commitments, or built-in tools for things like carbon footprint calculation) is an important consideration

Last year, we were surprised to see sustainability among the top three reasons driving vendor selection. This year sustainability remained in the top three and, when we looked at the rounded numbers, was technically tied for #2 with native data protection in terms of selection rate, meaning it gained ground in the rankings compared to last year when sustainability was ranked a more distant third.

This result reflects the fact that sustainability and ESG initiatives continue to grow in importance within many enterprises. Many organizations begin with initiatives to accurately measure the carbon footprint of their IT solutions and services, in order to develop a baseline measurement that they can then improve upon over time. Accurate measurements of carbon emissions are also increasingly important due to potential regulatory requirements.

Independent market research consistently shows that cloud infrastructure is more environmentally friendly than traditional on-premises computing. However, the optics of massive data center facility buildouts and headlines claiming exorbitant electricity and water consumption often create negative perception regarding “the cloud’s” impact on sustainability and ESG. This perception is likely part of the reason why so many enterprises are elevating sustainability topics when in conversations with cloud storage providers.

We believe this is a positive development for the market as a whole. As more enterprises adopt cloud infrastructure services, they will rely on services providers to deliver accurate, reliable measurements to inform the full spectrum of their Scope 3 emissions. This data will be critical to helping organizations benchmark their overall ESG performance. Wasabi remains dedicated to helping customers understand and measure their carbon footprint with a free-to-use carbon calculator tool.