Hybrid Cloud vs. Public Cloud: Which is More Cost-Efficient?


The public cloud has transformed business computing environments by enabling new levels of agility, scalability and innovation. Yet many IT leaders aren’t entirely satisfied with their cloud journey. More than two-thirds (67%) say they have yet to realize a substantial return on their cloud investments, according to KPMG’s 2022 technology survey. Forty-two percent say their cloud implementations do not yet meet their operational needs. 

For these reasons, organizations are now focusing on optimizing the cloud environment to create tangible value. The hybrid cloud model is increasingly seen as the most logical way forward. 

In a hybrid cloud, public and private clouds are integrated with on-premises infrastructure through a single management interface. It is an appealing approach because it delivers the scalability and elasticity of the cloud along with the control and reliability of on-premises infrastructure. Perhaps most important, it can create the cost optimization benefits often promised but rarely delivered by the public cloud.

Hidden Costs Add Up 

Gartner estimates that 60 percent of public cloud customers experience cost overruns. That’s often due to fees that cloud providers charge for moving data out of the cloud. According to an IDC study, 99 percent of cloud storage users say they have incurred planned or unplanned data egress fees. 

Egress fees are hidden costs because they are billed after the fact, on top of the regular monthly invoice. They are hard to predict because it is difficult to know how much data you’ll be moving out of the cloud. Egress fees are incurred when applications write data out to your network, when remote workers download data to work locally, when you pull data from the cloud for analytics or when you move data from one cloud to another. 

Major cloud providers charge between 5 cents and 20 cents per gigabyte for data moved from their cloud to an on-premises location. Large data transfers can add thousands of dollars to your monthly bill.

Controlling Egress Fees 

Hybrid cloud supports several techniques for keeping egress fees in check: 

  • Keep data on premises. “Cloud-adjacent” storage eliminates many costly data transfers — cloud applications can pull data from your repository at no cost because providers don’t charge for ingress. 
  • Use private network circuits between cloud locations and your data center. A direct connection to the cloud provider reduces egress fees by removing the need to move data across the Internet to your on-premises infrastructure.  
  • Use a software-defined cloud interconnect (SDCI) to connect branch offices with multiple clouds directly from an SD-WAN controller. Cisco reports that this technique can reduce data egress fee costs by up to 54 percent and network charges by up to 75 percent. 

How We Can Help

The cloud is an essential element of any IT environment, but unpredictable costs can make it difficult to achieve positive ROI or justify continued cloud migrations. Contact us to learn more about creating a hybrid cloud environment with the capacity to reduce cost overruns and meet your changing operational requirements.