Price shock: IBM to increase cloud costs by up to 26% from 2024

IBM is all set to increase its cloud services costs by up to 26% from January 2024. The new price rise will affect infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) offerings, the company said in a GitHub post. International customers will witness a steeper price hike compared to their US peers. 

IBM PaaS services — slated for a 3% price hike globally — include IBM’s Kubernetes Services, RedHat OpenShift, all security services, and all cloud database offerings including Message Hub, Cloudant, and SQL query services.

On the IaaS offerings front, the price hikes will be applied to bare metal servers, virtual server instances, file and block storage, and networking infrastructure for both classic and virtual private cloud (VPC) offerings, the company said.

However, with the exception of Cloud Object Storage costs, the prices for IaaS offerings will increase only for international data centers while they remain constant for US customers.

While the costs at Amsterdam, Montreal, and Toronto data centers will increase by nearly 3%, London data center costs will go up by 5.6%, the company said, adding that costs at Frankfurt, Milan, and Paris data centers will increase by 5.5%.

Data centers in Sao Paulo, Brazil will be the most impacted with an effective price change of 7.5%, followed by IBM data centers in Osaka, Singapore, and Tokyo, which will get a price hike of 6.2%.

There will be no price increase at Chennai, Sydney, Dallas, Washington, and San Jose data centers, the company said. IBM already charges a 20% premium over US base prices for customers using its data centers in Chennai and Sydney.

IBM’s Cloud Object Storage service will get dearer by 25% globally for Accelerated Archive storage, and 26% globally for Deep Archive storage, the company said, adding that there will be no changes to the existing pricing for Power Systems Virtual Server, third-party software, or network bandwidth.

The last few months have also seen technology vendors such as Microsoft and Salesforce hiking prices for their products and services in order to combat inflation and the rising cost of hiring staff.