The Cost of Data Managing is Rising
A report from Seagate has highlighted how the rising costs of storing and managing data are hitting businesses hard.
One-Third Of Company Budgets
The report highlights how up to a third of company IT budgets are being eaten up by data management and storage costs at an average spend of £213,000 annually!
Seagate describes the problem as a “sleeping giant” for businesses, and over half (52 per cent) of the senior IT decision-makers at companies with more than 1,000 employees who were surveyed for the report described this level of spending as “unsustainable.”
Also, the report revealed that companies are prioritising spending on data over energy costs and employee welfare and training.
Why Is It Happening?
There are several main reasons why companies are spending so much on data management and storage. These include:
– Businesses are using and storing data at unprecedented levels.
– Management does not always realise the scale of the problem (51 per cent of those surveyed thought this), thereby allowing costs to continue spiralling.
– Tough economic conditions are pushing up data storage and cloud services prices, e.g. Google Cloud is raising its prices in March this year. Cloud prices are rising, including disruption in the semiconductor supply chain, rising energy prices, colossal demand causing cloud companies to reach scale, and an uncertain geopolitical landscape (in Europe) stalling data centre expansion plans.
The Seagate report highlights how nearly two-thirds (64 per cent) of those surveyed think that how data storage and management is now priced also discourages innovation. This isn’t good for competitiveness and industries.
Similar Findings To IDC
The Seagate report echoes some of the findings of a recent (November 22) International Data Corporation (IDC) report which highlighted how “the largest share of enterprise IT infrastructure spending in the first half of 2022 (1H22) was Structured Databases/Data Management” with organisations spending $6.3 billion on compute and storage infrastructure to support this workload (8.5 per cent of the market total). The IDC report found that businesses worldwide spend $41.1 billion annually on “Data Management”.
What Does This Mean For Your Business?
Data is now a central and vital component for businesses. Although a move to the cloud has facilitated its storage and management while providing ways to create more value from that data, the costs of cloud services (among others) are rising at rates causing concern.
Over half of those surveyed for the report thought they wouldn’t be able to sustain these costs in 3 years, with data-management spending having risen by 30 per cent this year alone. As noted in the report, there may be a need for more management awareness about the scale of the problem, yet many businesses are now looking at all their costs anyway, and their data management costs are likely to be on that list too. Some approaches that companies could try to reduce those costs (without affecting growth) include optimising existing cloud resources, incentivising behaviour that saves cloud costs, more proactive budget controls, keeping scalability and savings in balance, finding/removing underused but costly processes, plus prioritising those processes and tools that best serve business needs. The fact remains, however, that data costs are likely to keep rising. Hence, businesses need to act now to take a close look at the sources of their data management costs and identify which steps can be taken to keep them down without hurting competitiveness.