S3 object storage cost comparisons between public cloud options and private data centers reveal crucial differences in long-term expenses and scalability. Public cloud providers offer readily available infrastructure and flexibility, but data storage and retrieval costs escalate rapidly with high-volume usage.
In contrast, an on-premises S3 storage solution involves a larger upfront investment but provides predictable and lower costs for high-demand storage needs over time.
This blog breaks down each cost component, enabling an informed decision for your organization’s storage strategy.
Understanding the Total Cost of Ownership for Public Cloud Storage
Public Cloud Storage Cost Breakdown
Public cloud S3 storage costs vary by provider, storage tier, and data volume.
For instance, AWS charges approximately $0.023 per GB for the first 50 TB on its Standard tier, totaling $1,150 per month for 50 TB, reducing to $0.022 per GB beyond 50 TB, and further reducing to $0.021 per GB for over 500 TB.
Google Cloud offers similar Standard storage at $0.020 per GB for the first 50 TB, costing $1,000 per month, while Microsoft Azure’s Hot tier costs $0.018 per GB, totaling $900 monthly for 50 TB.
IBM’s rates start higher at about $0.0255 per GB, with 50 TB costing around $1,275 monthly.
Hidden Cloud Costs Beyond Storage: Data Access Fees
Access fees add significant cost to public cloud storage, as charges apply for retrieval, frequent access, and data egress.
AWS imposes retrieval fees for data pulled from cold tiers, while Google Cloud’s Nearline and Coldline tiers charge $0.01 and $0.004 per GB respectively, affecting total expenses based on usage frequency.
Egress fees further add to the cost, especially when transferring data outside of the cloud, with fees ranging by provider.
The Price of Connectivity: Network and Transfer Fees in Public Cloud
Data transfer fees can quickly accumulate when moving data within or out of a public cloud.
While intra-region transfers are typically lower-cost or free, cross-region or external transfers incur fees. For AWS, egress costs can reach $0.09 per GB after the first free GB. This adds substantially when moving large datasets, especially in multi-cloud setups.
The Price of High Availability: Redundancy and Backup Costs
Enhanced redundancy—such as AWS’s multi-zone replication—increases durability and availability but involves additional costs.
For example, replicating data across multiple regions raises the total storage cost by replicating charges across each zone, often essential for enterprises requiring high availability, but a factor to consider in overall budgeting.
Cost of Private Data Center/Private Cloud S3 Object Storage
The Upfront Investment Required for On-Premises S3 Object Storage Infrastructure
Building S3-compatible storage infrastructure in a private data center requires upfront spending on hardware, networking equipment, and software licenses.
Key components include high-density storage drives (such as HDDs for cold storage and NVMe SSDs for hot storage tiers), RAID controllers for redundancy, network switches, and backup power systems.
While initial costs can be high, the declining price of enterprise storage hardware reduces CapEx, and many organizations see higher ROI due to complete ownership of resources, lack of ongoing rental fees, and avoidance of public cloud price increases over time.
Storage appliances can also be designed for modular expansion, allowing future storage needs to be met without drastic infrastructure overhauls.
Understanding the Costs of Managing On-Premise S3 Storage
On-premises storage provides organizations with flexibility to set and adjust their own storage policies, such as tiered storage management, replication, and backup. This requires dedicated IT staff or managed services but enables customized policies that reduce OpEx.
For example, data classified as cold can be moved to lower-cost storage tiers without incurring retrieval fees.
Redundancy can be achieved through multi-zone and multi-cluster replication, reducing the risk of data loss and avoiding the per-use redundancy and replication fees typically found in cloud services.
The Price of Control: Ongoing Operational Costs of On-Premises S3 Object Storage Infrastructure
A private data center incurs predictable costs for power, cooling, and physical maintenance, but these expenses generally remain fixed compared to variable cloud expenses. Power usage effectiveness (PUE) is a crucial metric, with modern facilities designed to reduce cooling costs via efficient airflow management and other techniques.
Regular maintenance, firmware updates, and hardware checks can be scheduled to minimize disruptions, unlike in cloud storage, where companies rely on the provider’s schedule and associated costs.
Additionally, operational control over power and cooling reduces unexpected OpEx fluctuations, helping organizations budget accurately over the long term.
Licensing & Software Costs of On-Premises S3 Object Storage Infrastructure
Both cloud and on-premises S3 object storage involve software licensing fees, but private data centers offer more tailored licensing models that align with the organization’s exact needs, often with lower incremental costs as data scales.
On-premises object storage solutions also offer flat-rate licensing or perpetual licenses, which avoid the monthly or annual scaling fees of cloud solutions. Licensing fees might cover specialized software for data deduplication, compression, access management, and security, often with additional flexibility in configuring and integrating these with existing IT systems.
Long-Term Cost Analysis of S3 Object Storage in the Cloud vs On-Premises
5 Year Cloud vs On-Premises Object Storage Cost Projections
When comparing public cloud S3 object storage to an on-premises/private cloud setup over a 5-year period, the financial implications become clear.
Public cloud services, with their ongoing OpEx model, accumulate monthly costs for storage, data access, and additional services. For example, 50 TB of data on public cloud S3 storage with standard retrieval rates can amount to over $60,000 annually, not accounting for potential price increases.
Over five years, this cost scales directly with data growth and additional access needs, often resulting in total costs that significantly surpass initial estimates.
In contrast, an on-premises S3 storage solution requires a substantial initial investment in hardware, networking, and software, but these are largely one-time CapEx costs. With depreciation and hardware refresh cycles factored in, private data center costs tend to be lower in the long run for organizations with high or expanding data volumes.
Maintenance, power, and licensing fees represent ongoing costs, but they are predictable, often resulting in overall cost savings after the initial 1-2 years of operation.
The Long-Term Cost of Scalability in the Cloud vs On-Premises
As data needs grow, the cost of scaling can vary greatly between public cloud and on-premises solutions. Public cloud providers often offer scalable storage, but this scalability incurs higher incremental costs as storage volume and access frequency increase. Expanding from 50 TB to 100 TB, for example, can lead to a proportional increase in monthly cloud costs, compounded by rising retrieval and transfer charges.
In an on-premises setup, however, scaling is more cost-effective with a modular approach. Expansion typically involves adding additional storage units or drives, which is a one-time expenditure rather than an ongoing OpEx. Organizations can also prioritize certain storage tiers for scalability, such as adding low-cost HDDs for cold storage, effectively controlling the cost of scaling.
Over the long term, this approach not only enables larger capacity management but also allows organizations to plan and budget for expansion without unpredictable monthly fees.
Conclusion
While cloud storage offers flexibility and avoids initial CapEx, its monthly expenses, especially for large and frequently accessed data sets, can quickly add up.
Conversely, investing in on-premises S3 storage infrastructure can reduce cumulative costs over time, provide stable operational expenses, and allow for predictable scaling without recurring access fees.
For companies managing high data volumes, prioritizing data security, or requiring budget control over extended periods, on-premises S3 object storage may offer a more sustainable and cost-effective solution.
Looking to build a cost-effective S3 object storage solution? StoneFly provides ransomware-proof air-gapped and immutable physical, virtual, and cloud S3 object storage solutions. Contact [email protected] to custom-build your storage solution.