The announcement of price increases for cloud services—particularly when rates for certain storage or egress components are doubling—represents a significant shift in the cloud economy. For businesses currently undergoing digitalization, this creates a "Cloud Inflation" challenge that can erode the ROI of digital transformation.
Based on the market trends and the specific impact on your business model, here is a point of view (POV) and a management strategy.
1. A Strategic Shift in Cloud Economics
End of the "Cheap Storage" Era: For years, cloud providers competed on low prices to lock users in. Now that massive amounts of data are stored in the cloud, providers are shifting focus toward profitability. For SMEs, this means storage is no longer a "commodity" but a "premium asset" that must be managed tightly.
The "Egress Trap": Large increases in data transfer (egress) fees are designed to make it expensive to move data out of a specific cloud. This increases "vendor lock-in," making it harder for businesses to switch to cheaper alternatives once their data footprint grows.
2. How to Manage the Price Increase
To protect your margins and help your SME clients, you should implement a Cloud Cost Optimization (FinOps) strategy:
A. Audit and Data Tiering (Immediate Action)
Identify "Cold" vs. "Hot" Data: Not all data needs to be instantly accessible. Move older logs, historical invoices, and backups to "Cold Storage" tiers (like Archive or Coldline), which usually remain cheaper despite general price hikes.
Clean Up "Ghost" Resources: Cloud bills are often inflated by unattached storage disks or idle virtual machines. Perform a "Scream Test" (turn off idle resources and see if anyone complains) to eliminate waste.
B. Leverage Sovereign Cloud & Local Hosting
Local Advantage: Since you are in Malaysia, emphasize Sovereign Cloud. If global providers (like Google or AWS) increase prices globally, local data center providers may offer more stable, ringgit-denominated pricing that isn't as sensitive to global corporate shifts.
Hybrid Approach: Store sensitive/compliance-heavy data on your own localized IaaS while using global clouds only for specific SaaS tools.
C. Implement Egress Optimization
Reduce Data Movement: Redesign software architecture to process data where it lives. Avoid pulling large datasets out of the cloud to local servers for reporting; instead, use cloud-native BI tools that stay within the provider's network to avoid egress fees.
Commitment Discounts: If you know your minimum usage, sign Committed Use Discounts (CUDs). Most providers offer 50-70% off in exchange for a 1-year or 3-year commitment, which can offset the price doubling.
D. Strategic Communication to Your Clients
Reframe the Value: When communicating this to SMEs, don't just talk about "costs." Frame it as the "Cost of Compliance and Security." With the 2026 e-Invoicing mandate, the security provided by these platforms is more critical than ever.
Bundled Pricing: As a provider, bundle the cloud cost into a flat-rate "Digitalization Package." This hides the fluctuating cloud rates from the SME and allows you to optimize the backend without constantly renegotiating prices with the client.
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