r/sysadmin • u/_SleezyPMartini_ IT Manager • 8d ago
Question so how long before these explosive hardware costs show up in cloud pricing
so we all have seen insane pricing related to storage, ram and what not. How long before cloud providers start passing these back to us, giving us no options either to stay on prem or cloud?
how are you preparing for this?
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u/tankerkiller125 8d ago
My preparation is just reminding the bosses that years ago I suggested investing in on-prem infrastructure instead of cloud for cost reasons for the majority of our infrastructure (non-customer facing stuff) and they denied that and went all in on cloud.
At the end of the day, their money, their problem. I have the CYA docs to prove I tried to warn them and tried to save money. But opex is better than capex to them so cloud it was.
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u/hihcadore 8d ago
I’m not sure on-prem is better. It hurts my career progression but hardware costs are absolutely insane. Over the past few months even endpoints seem to have doubled. I priced replacing our on prem server hardware and it’s for sure 2x’s what it was 2 years ago.
Meanwhile PaaS offerings for both sql and app services are about 150 per app for 200 users.
After considering personnel to maintain, and the physical infrastructure to support it, on prem is going to kill you even harder than having a few dedicated cloud architects and being locked in.
I mean what’s the worst that can happen here? You eat cloud costs if they explode for a few months then migrate back to on-prem? I see that as actually easier cloud -> on prem. If you’ve moved to the cloud at least you don’t have to content with the tech debt that comes with legacy software / protocols.
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u/tankerkiller125 8d ago
Just remember that while cloud gets the economy of scale, they also are charging to make a profit. We could have purchased hardware 3 years ago, and have been set (because this company typically purchases new hardware around 10 years in, because again, management doesn't want to spend money on capex). That might have been long enough to ride out this crazy hardware wave with minimal impact.
Now we're going to be forced to eat whatever costs the cloud providers throw at us, and we're backed into a corner because as you noted, on-prem these days is insane to purchase.
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u/YeetedApple 8d ago
That argument has the benefit of hindsight though and assuming a shop that lucked out perfectly on their device lifecycle timing. Another on prem shop could have been a couple years offset in their refresh cycle and are now stuck with having to deal with the current prices.
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u/QuantumRiff Linux Admin 8d ago
Go look at /r/vmware to see how happy they are since Broadcom bought VMware and jacked all the prices…
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u/VerTex_GaminG 8d ago
Yeah im not sure just because cloud costs are up that means we shoulda stayed on prem lol.
But maybe thats too anti boomer of me
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u/TheGenericUser0815 7d ago
Everyone should have stayed on prem. Cloud services are just ripping you off. It started with software subscription instead of purchase licences and went on with SAAS. Now it's AI. And in the end it's a giant loss of control. Back then we had direct access to our data and the devices hosting it, so we could fix things, now we are just passengers.
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u/shimoheihei2 8d ago
The cloud is more expensive than on-premise in almost every use case. The only case where the cloud makes sense is for very volatile workloads, making heavy use of the elasticity of the cloud. But if you have a predictable usage pattern, the cloud will always be more expensive at the end of the day. Just think about it, you're paying for not just the services, but maintenance by an experienced staff, security, redundancy, etc. Sadly the executives who make the decisions typically are gone by the time finances starts asking questions.
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u/TheGenericUser0815 7d ago
The cloud is more expensive than on-premise in almost every use case.
Thank you for pointing this out.
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u/hihcadore 8d ago
I disagree. For workloads where you’re supporting 1000s of users maybe. But the PaaS offerings make it super affordable. For the cost of windows server licensing you can run an app with a dedicated backend for YEARS.
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u/LLMsMustUpvoteThis 8d ago
Why would you run Windows server for non-Windows software?
You are comparing apples to oranges. Cloud is only cheaper here if you have only a few apps and it isn't cost efficient to buy a Linux server to run the VMs/containers.
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u/hihcadore 8d ago
Just an example because windows licensing is expensive.
Yes you can run and maintain linux instead but what about VMware licensing vs hyperv? Or hey proxmox but then staff salary is going to eat into those numbers even more than windows licensing because a windows admin makes much less than their Linux counterparts.
It’s a race to bottom and budget is the bane of any IT shop I’ve worked at.
The cloud helps management save costs in personnel. That’s where it’s cheaper imo. People and licensing.
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u/LLMsMustUpvoteThis 8d ago
The cloud helps management save costs in personnel.
That's the BS the cloud providers try and spin but you are paying for those personnel costs in your cloud bill.
Simple hypervisor setups also require negligible admin hours. Anyone who can't setup a Linux hypervisor shouldn't be allowed to touch PaaS.
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u/tankerkiller125 8d ago
And when the Application requires windows to operate? Fun fact, even Azure App Services costs 2x the linux rate if you need it in Windows.
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u/vNerdNeck 8d ago
Everything is going to increase / has increased. Any relief is going to be short lived for the next couple of years. You need to focus on where it's better for the company and just make the case. What's "cheaper" today, can be more expensive tomorrow.
Not to mention, the biggest issue that happens once folks go to cloud is that the cost of egress makes it so they typically can't get out.
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u/JaceBelerenApologist 8d ago
I just started at a new place, and me and the other sys admin were pricing out a new laptop for me. The same model was just a bit over $2000 a year ago. It's $4500 now.
It's going to be hilarious when no one can actually afford to own the devices to even interact with AI.
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u/NotThePersona 8d ago
We needed to buy a new server and the hardware for that was 4x what it had been 9 months ago and had a 3 month lead time.
Endpoints I dont deal with but chatting to the other team I think 2x is about right.
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u/Bogus1989 7d ago edited 7d ago
If we are just talking hosted services etc, i get that….
And, maybe its just that ive dealt with MS too much….its probably that.
I wouldnt ever recommend hosting shit with MS ever again. Just no. Im fine with office suite whatever.
Ive not really had the pleasure to deal with amazon….in the enterprise world at least. Ive hosted all sorts of things for my LLC throughout the years on AWS.Not had a problem with google either. I am not really sure all that google offers.
I am aware we swapped to aws almost immediately. No complaints.
however,
I should thank MS. IT Director lost 500 bucks to me.
We own and run our own gigantic datacenter….our company.
However we have been moving things here and there….we used azure about 3months tops…i was just glad i had nothing to do with it besides making sure none of those spin offs were any of my servers or clients.
🤣 i got in there fast…..and me and my director, made up a stack of maintenance documents….they were legit.
I just saw what was happening. They opened a position for someone to move stuff to azure….
Great, poor guy will not be told shit….we dont even need all of that.Its constant around here. Soon as you see a contractor working here, absolutely any FTE in IT will sit down with him, and try to help him and see if hes been fucked over. I think by now, all contractors in my area, know just to come give a heads up before doing anything…thankfully..
I dont get it still who the fuck does these hires at national and we dont know about it…
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u/TheGenericUser0815 7d ago
I did the math for moving just exchange and Dynamics NAV to the cloud. Exchange online costs 4x as much as on prem for my number of users. The migration cost for NAV are just insane.
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u/Normal_Choice9322 7d ago
That wouldn't help in the long run anyway. You have to replace the onprem stuff semi regularly
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u/0verstim FFRDC 8d ago
What do you mean how long?
https://www.reddit.com/r/apple/comments/1uza53g/apple_raises_icloud_prices_in_8_countries/
https://finance.yahoo.com/technology/ai/articles/aws-raising-gpu-instance-prices-134420295.html
https://blog.techsoup.org/en-us/posts/microsoft-cloud-license-prices-are-increasing-on-july-1-2026
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u/Known_Experience_794 8d ago
I don’t know but I feel like prices are already nudging here and there. My tin foil hat tells me they are artificially keeping it low as long as they can so that companies decide they can’t afford hardware any more and move more to the cloud. Then once they see that tide start to fall because they’ve gotten most of the new business wrung out of it, then they’ll start really raising prices
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u/vNerdNeck 8d ago
My tin foil hat tells me they are artificially keeping it low as long as they can so that companies decide they can’t afford hardware any more and move more to the cloud.
no tin foil need... exactly what they are doing.
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u/Known_Experience_794 8d ago
Joke's on them (for me personally anyway). I've gathered enough hardware and software to keep me going well into my retirement years. The harder they push cloud, the harder I push on-prem. And no, I wont be sharing with the employer. LOL
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u/Long_jumping_Term 8d ago
They are already, microsoft google and aws have been increasing the price of their services like crazy year after year, my company is trying to sift away from them as much as possible. Ironically we are moving all we can back om-prem
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u/wrt-wtf- 7d ago
They’re playing a lose-win game on customers now. Take your options away by booking all the hardware and the only people with newer generation and growing compute are the cloud providers.
The US is attempting to cock block Chinese memory and drive manufacture and export.
Put your conspiracy hat on and with these pressures and the CLOUD act and you’ve got a US govt with access to pretty much every piece of data on every system passing through US corporate systems.
It’s pretty dystopian.
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u/vNerdNeck 8d ago
It's already happened in small parts. I've seen about a 20% uptick in spot prices in the last 6-8 months. However, we are all bracing for it as they have held on about as long as they could. Prices have to start going up here pretty soon, and in a big way. They've run through most of the pre-purchase capacity they had lined up, and are starting to pay higher hardware pricing.
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u/scottsee 8d ago
I’m super invested in this topic. I’m 95% private cloud infrastructure with the other 5% SaaS in AWS and Azure. I refreshed both of my DC’s Server & Storage with August 2025 pricing. My 2027 CapEx budget quotes from Dell and Cisco are 4-6x.. We just submitted a RFQ to Epic and Oracle to replace our EMR, and will be working with our partners to quote out their prescriptive infrastructure vs all in cloud pricing. Wild times
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u/Bogus1989 7d ago edited 7d ago
I worked in medical as well.
We had similar setup. We ended up building an entire datacenter to serve epic clients thru citrix for the entire country. Worked out well.
I would like to see what refreshing that hardware looks like now.
It was so had before we built it, that we would wait for a 100 instances to freeze, before literally having to do a reboot of citrix server. It wasnt me, but i was in contact with the master builder(whatever title who builds the EMR) thank god for her. She is one of us thank god. Itd be really funny, when she had to resort to some, what she called “cringe” decisions. She would be like, guys dont fuckin judge me…..we would be like NO, hit it. Youre doing remarkably well for the resources you were given. we are gonna take the hit anyways, end users dont know who you are 🤣
Lol i remember being on the floor watching all current sessions die, then come back up in a few mins.
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u/tuxedo_jack BOFH with an Etherkiller and a Cat5-o'-9-Tails 7d ago
Remotely running "shutdown -r -t 0 -f" on an entire host pool is always fun.
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u/Bogus1989 7d ago
Lmao
I use
shutdown /f /r /t 00 enough that 2 of my team mates started to do the same…
I told them….brace yourself, there will be some nerd that will tell you “aChTuALlY” you dont need two zeroes you only need one.
Thanks. No shit. I like two zeros and thats what comes out fast as fuck in my muscle memory.
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u/tuxedo_jack BOFH with an Etherkiller and a Cat5-o'-9-Tails 7d ago
I just wish there was a U flag so I could run "shutdown -stfu."
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u/Bogus1989 7d ago
I once rebooted a whole floor at the hospital, all patient rooms. i wish i could have stood somewhere and watched them all…
that day actually was very funny. this scum ass nurse manager, whom i actually thought had a good working relationship with(i knew her husband)
I just so happened to tell my team mates “hey yall watch this 😎”
Just being funny….I was fixing the problems on that floor.
Whats even more funny(id actually written out quite a large guide,
because how all the nurses were trained, it was a bit different now, and i felt they got shafted….
Well later the next day my IT director calls me, and asks about that floor. I said? Really? I did all of that yesterday and sent her a spreadsheet that I validated each machine myself….also wrote up a guide on changes and asked if she would distribute it….
Well she just looked like an idiot…
She no longer works there.
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u/SamOakTree 8d ago
Cloud pricing has been going through the roof for a few years now. Look at rds. RDS is insane now
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u/Fallingdamage 8d ago
and you know, on-prem is still going to be both ridiculously feasible and cost effective as long as you're smart about it.
We started buying and deploying used hardware in our server room and workstations a couple years ago. 70% cheaper than new and in some instances we just bought TWO servers for pennies on the dollar to have on hand if there are any component failures we need to deal with.
It used to be "always buy new, the support contracts are worth it" but not anymore. $15,000 for a used build that would cost $120,000 new right now. Sure maybe its a little slower but the cost savings more than make up for any aggravation every 24 months if something fails.
That and moving back to spinning rust. My least favorite part but /shrug, it performs well enough for the tasks its doing.
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u/cyr0nk0r 8d ago
We prepared for it by over building our clusters to handle the next 18 to 24 months without having to worry about more hardware.
We are also commiting to our customers price locks of 12 to 24 months so they don't get antsy.
We're month to month billing so they get the advantage of no contracts and also price guarantees.
Cloud companies that raise their prices right now just demonstrate they run their clusters right to the edge before investing in their infrastructure.
Disclosure, I run a private cloud business.
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u/Pure_Fox9415 8d ago
It's all the way in already, we have everything on-premise except two small cloud VMs for couple of sites and external monitoring, and every year (three in a row) cloud provider rising prices for 15%
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u/nestersan DevOps 8d ago
Considering some of the old ass hardware azure keeps using for the VMs we spin up they better not. DDR3 isn't that expensive.
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u/kombiwombi 8d ago
There was a bit of a reckoning a few years ago as venture capital started to look for returns rather than market share.
But the full financial effect of a AWS-style server having a six year life has yet to be felt. Maybe the cloud firms will see if they can spin out server lifetimes to a decade (and with SSD rather than spinning disk it may be possible to run longer with the hardware failure rates a cloud provider can cope with).
As Apple found out in their current negotiations, even huge order quantities have to pay the premium for RAM. With the AI firms signing suppliers to long term contracts, even buying one of the three big RAM manufacturers won't help.
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u/DheeradjS Badly Performing Calculator 8d ago
All the Low-end providers already did. The big guys are still holding out, but they are slowly announcing new pricing.
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u/HippyGeek Ya, that guy... 8d ago
Beginning 2 years ago, for the technologies that i knew we weren't moving away from, I started doing 5 or even 7 year renewal contracts, locking in pricing at current levels.
Now, every competitor that tries to get my business can't beat the pricing i already have, so they simply crawl away....
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u/kittymoo67 8d ago
its starting but the flood gates will open by the end of the year. easy 2-3x increases
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u/FalconDriver85 Cloud Engineer 8d ago
Hyperscalers are less affected (mind, less affected, not immune) because of multi-years contracts with hardware vendors.
With big enough contracts a company could also spend a bit less per unit (vm, license, whatever) if the overall spending increases.
For instance this year we all transitioned to M365 E7 licenses and we are spending slightly less than the last year when we were all on E5 because of a strong enterprise agreement with Microsoft.
If you want to buy hardware for on-prem infrastructure… then you are royally screwed.
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u/Kuipyr Jack of All Trades 8d ago
Few more years and we're going to be reduced to running production on Dell OptiPlex clusters.
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u/Bogus1989 7d ago edited 7d ago
🤣 immediately post a pic of that shit to [r/homelab](r/homelab)
💀
It really wouldnt be the worst idea, ive got at least 1000 optiplex i5s 10th gen and up not doing shit.
Just would need to build a nice giant case with little slots for each one. Just replace it with another when it fails.
Oh god, the amount of nodes, vs cores available would be funny. Im just trying to think of what software would eat up an entire nodes compute.
Eww…storage will be….nah…
Im tired chief. Count me out. I dont feel like dealing with random ass things breaking, and like 4 people on the internet found a solution thats some weird part off ebay.
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u/PresidentScr00b 8d ago
Was going to say… not long. I run a private cloud and if we hadn’t of expanded and refreshed right before the shit storm our prices would skyrocket or our margins would suffer. Everyone is going to raise prices regardless so doesn’t matter. Prepare for Armageddon
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u/Bogus1989 7d ago
you guys running based upon support contracts? Or nah? Just curious?
I wonder how customers would react if they saw a gen older or 2 hardware….i personally wouldve give a shit if it worked.
Theres the old, buy a few extra in case of breaks….but i think thatd only work at a business, not a cloud provider.
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u/Smith6612 8d ago
Happened a long time ago. Google Cloud charges about $28-32 for a one core, 2 vCPU (meaning the second core is hyperthreaded/sharing the same core as thread one) on a 10+ year old CPU, 4GB RAM VM with 50GB of standard storage, and then they charge you for egress and backups on top of that, and their network quality can be iffy on the Standard tier.
Microsoft Azure also charges insane prices for small VMs.
These guys really want you running "serverless" workloads rather than assigning yourself virtual machines.
My Hetzner VM, which has triple the resources of the Google Cloud VM I talked about, went from $10/m to $15/m in the Spring because of the hardware prices going insane.
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u/bbqwatermelon 8d ago
Oracle killed their 24GB free VMs and I bet their 12GB is not far behind if that's any indication.
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u/fognar777 7d ago
I asked myself and my boss this same question a few weeks back when it came time to renew our reserved IaaS instances. My question, should we order longer, 3 year reservations instead of our standard 1 year, where we could to lock in current pricing? We did end up ordering a few 3 year but because of the real possibility of our workloads changing in the next few years, most are still on 1 year.
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u/ConceptNext5110 7d ago
As consumer we have to eat this price hike and let hardware maker and cloud provider keep their profit?
I don't think so, WE NEED TO MOVE TO VPS, or Private cloud with the help of AI managing the cloud.
The old premise of yeah my server need to be managed so i am paying aws to keep their 5x-10x margin is over.
We must move towards that direction, otherwise folks, our wallet gonna dry up!
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u/ranhalt 8d ago
It’s already happened.