The Real Cost of Hyperscalers: "Low-Cost Computing" Not So Cheap After All

25 Aug 2025, by Micron21

For more than a decade, businesses have looked to modernise their IT infrastructure by moving away from older, often on-premises hardware to more scalable and future-proofed solutions. The promise was enticing: cost-effective, infinitely scalable cloud computing through major hyperscalers like AWS, Microsoft Azure, and Google Cloud.

The numbers reflect this massive shift. Most sources indicate that over 90% of organisations now use cloud computing, with more than 50% of business data stored in the cloud. The appeal is clear - public cloud environments allow you to "right-size" your systems and build only what's required at any given moment, avoiding large capital outlays for server hardware.

However, what many organisations are discovering is that the scalability and lack of upfront costs aren't quite the bargain they initially appeared to be. While the entry point remains fairly affordable for those just starting out, all those previously small costs - such as data transfer fees - add up significantly as you grow. Eventually, these expenses can exceed what you would have spent using your own hardware.

Making matters worse, cloud providers have started increasing their costs in recent years, creating an even bleaker situation for businesses that find themselves stuck on these platforms.

What Are the "Hidden Costs" of Using Public Cloud Resources?

Data Transit Costs

One of the most overlooked aspects of cloud budgeting involves data transit costs, specifically ingress and egress data transfers. Ingress refers to data moving into the cloud provider's infrastructure, while egress covers data leaving their systems.

Providers often offer free ingress to make migration easier - essentially encouraging you to move your data to their platform. However, they charge substantial fees for outgoing data or inter-regional data transfers. This creates a financial trap where moving your systems to another provider or platform becomes extremely expensive once you're established.

These IP transit costs can represent a significant portion of your monthly cloud bill. Many businesses are caught off-guard when they discover that their data transfer costs alone can consume 20-30% of their total cloud spending, particularly as their operations scale and require more data movement between regions or external systems.

Unpredictable Scaling

Infrastructure as a Service (IaaS) offerings - such as database services like Amazon RDS, message queuing services like Amazon SQS, or serverless compute services like AWS Lambda - can cause considerable bill shock when they scale unpredictably.

There are numerous examples of businesses experiencing viral success, only to face crippling cloud bills they hadn't anticipated. When your application suddenly handles ten times to a hundred times the normal traffic due to unexpected popularity, the automatic scaling that seemed like a benefit can become a financial nightmare. Without adequate monetisation strategies in place, success can literally cost you more than failure.

Vendor Lock-in

While hyperscalers offer great convenience, their services are often highly individualised, custom, and completely non-portable. This proprietary approach makes it extremely difficult to move away should you want to change providers due to pricing, technology concerns, or dissatisfaction with the service.

Once you've built your infrastructure around AWS', or Azure's, or any hyperscalers highly unique ecosystem, extracting yourself becomes a complex and expensive undertaking. This vendor lock-in represents a significant business risk that many organisations only fully appreciate when they attempt to migrate elsewhere.

What Alternatives Are There? Look to Utilise Your Own Hardware

Recognising these mounting costs and limitations, many companies are choosing to step back from hyperscalers after realising their true impact on business finances. Some organisations are opting for hybrid cloud arrangements, maintaining some cloud presence with hyperscalers while bringing other workloads back to their own infrastructure. Others are making a complete move to private cloud architectures using their own hardware.

Private clouds provide full control over your environment and allow you to cut monthly infrastructure costs significantly. After experiencing the constraints of vendor lock-in, many businesses now view heavy integration with highly specific technology stacks as a risk to be managed rather than a convenience to embrace.

Additional advantages of using your own infrastructure include:

• Predictable costs: No surprise bills from unexpected scaling or data transfer spikes
• Enhanced security: Complete control over your data and how it's processed
• Compliance benefits: Easier to meet regulatory requirements when you control the entire stack
• Performance optimisation: Ability to fine-tune hardware and software configurations for your specific workloads

The Best of Both Worlds: Get "Public Cloud" Benefits Using Your Own Hardware with mCloud

One unique offering that addresses these challenges is Micron21's mCloud platform, which allows you to contribute your own hardware to our public cloud infrastructure. This innovative approach lets you benefit from the cost savings of owning your hardware whilst still accessing the redundancy and scalability of public cloud infrastructure.

With mCloud, you can scale above your dedicated hardware capacity when required, making capacity management less of a concern while still benefiting from reduced cloud computing costs. Our platform provides high-availability failover as standard, meaning you get protection against downtime that hardware clustering provides without needing to invest in multiple physical servers yourself.

We've explored this concept in detail in our recent article about high availability, which demonstrates how proper infrastructure design can eliminate single points of failure.

If you're interested in seeing potential savings, we've created a pricing calculator that shows how much you could save by moving from hyperscalers to a more sustainable infrastructure model.

Have Questions About Saving Money by Moving from Hyperscalers?

If you have questions about what your infrastructure would look like using your own hardware, we're here to help. Our team can recommend appropriate hardware configurations and hypervisors, as well as calculate potential savings for your specific situation.

You can reach us via email at sales@micron21.com or by phone on 1300 769 972. We're committed to helping organisations find the right balance between performance, scalability, and cost-effectiveness in their cloud strategy.