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Tech News : Rising Data Management Costs Affecting Businesses

A report from Seagate has highlighted how the rising costs of storing and managing data is 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 per year!

Sleeping Giant 

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, as well as 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 do 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 pushing up data storage and cloud services prices, e.g. Google Cloud raising its prices in March this year. Reasons why cloud prices are rising include disruption in the semiconductor supply chain, rising energy prices, huge demand causing cloud companies to reach scale, and an uncertain geopolitical landscape (in Europe) stalling data centre expansion plans.

Innovation Suffering 

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 is bad for competitiveness and industries.

Similar Findings To IDC 

The Seagate report echoes some of 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 are spending $41.1 billion annually on “Data Management”. 

What Does This Mean For Your Business?

Data is now a central and vital component for businesses and 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 which are causing concern.

Over half those surveyed for the report thought that they wouldn’t be able to sustain these kinds of costs in 3 years’ time with data-management spending having risen by 30 per cent this year alone. As noted in the report, there may be a lack of management awareness about the scale of the problem, yet many businesses are now looking at all their costs anyway at this time and their data management costs are now 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 save 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 so 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.