Sharply rising IT costs have CIOs threading the needle on innovation

“For many years, CIOs were taught that in the cloud, either prices went down, or you got more functionality, and occasionally both, that the economies of scale accrue to the cloud providers and allow for at least stable prices, if not declines or functional expansion,” he says. “It wasn’t until post-COVID in the energy crisis, followed by staff cost increases, when that story turned around.”

Faiz Khan, founder and CEO of multicloud services provider Wanclouds, agrees that cloud prices are likely to go up this year. “That doesn’t necessarily mean that most enterprises are expanding the amount of cloud storage they need,” he says. “The Gartner folks are right in saying that there is continued inflation with IT costs on things such as storage, so companies are paying more for essentially the same storage this year than they were the year prior.”

But in some cases, organizations are moving to a multicloud approach, giving them additional IT resources as they pay more for cloud services, he says. In addition, demand is growing for cloud-based GPUs used for AI model training.