Cloud Costs Continue To Rise Among IT Commodities
SearchCIO, Monday, August 14,2023
CIOs can expect higher cloud costs as the U.S. government's wholesale inflation index hits its highest rating for the technology category that includes this IT model.
The U.S. government's inflation index recorded the highest-ever reading for a technology category that includes cloud computing, which has become a core component of enterprise IT strategies.
The Producer Price Index (PPI) for July, released late last week, reported a year-over-year price hike of 2.8% for data processing, hosting and related services, a grouping in which cloud is an important contributor. Prices in this sector, which saw a month-over-month uptick of 0.5%, have been growing steadily since September 2022.
Increasing labor costs have contributed to rising cloud prices, according to industry watchers. Another factor is the rise of generative AI. Cloud providers are embedding the technology in their offerings, which has begun to influence their pricing.