Cloud costs are sky high. How do mid-sized businesses cope?

Gartner made a bold prediction two years ago that cloud computing will become a business necessity by 2028, and this has proven prescient. The reasons are clear: businesses need to be agile and innovative yet cost-efficient to stay competitive, and the cloud is the foundation of those objectives.

This is reflected among Australia’s mid-sized businesses, which are on a growth trajectory driven by a strong emphasis on innovation. Many are prioritising investments in emerging technologies like AI, digital security, and data analytics. These capabilities demand a reliable, scalable computing infrastructure, and the cloud often marks the first step.

Yet cost remains a major roadblock, even for enterprises. Foundry’s Cloud Computing Study 2024 found that the cost of cloud services, particularly with global hyperscalers, remains the single biggest impediment to cloud adoption.

As a result, many mid-sized businesses are left with the choice of taking on significant financial risk with a transformation potentially beyond their means or facing potential decline with their legacy environment.

Addressing the cost conundrum with a local solution

According to James Braunegg, Managing Director at Micron21, monthly cloud spend for mid-sized businesses can range from A$2,500 up to A$50,000, depending on the complexity and scale of operations. This is on top of potential hidden costs such as data egress fees, underutilised resources, and unexpected spikes from dynamic workloads. Figures may not even include additional spending on essential SaaS tools like CRMs or ERPs, further inflating operational expenditure.

This is worsened by recent shifts in licensing and pricing models. VMware’s move towards subscription-based pricing has disrupted many long-standing IT strategies, while global providers continue to raise their rates. For IT decision-makers in the mid-market, this environment calls for cautious budgeting and a more strategic approach to cloud investments.

“VMware hyperconverged infrastructure was central to our cloud offering. However, price increases by Broadcom were going to hurt our customers,” explains Braunegg. “We looked around for alternatives but faced the same challenges of vendor lock-in and high prices, and found nothing that came close to what we were doing with VMware.”

Seeing the gap in the market as an opportunity to provide a real alternative by leveraging its infrastructure and network at a fraction of the cost, Micron21—an Australian-owned and operated Tier IV data centre and cloud infrastructure provider—invested in building mCloud.

Through mCloud, Micron21 offers a platform purpose-built for businesses that demand flexibility, performance, and cost-efficiency. Its design is rooted in the company’s proven infrastructure and commitment to resilience, providing 100 per cent uptime backed by enterprise-grade hardware and dedicated support.

What sets it apart is its open-source foundation, which empowers users with greater control and flexibility. This not only eliminates the risk of vendor lock-in but also significantly reduces the TCO. With many global providers tying clients to complex, rigid pricing structures, the ability to operate with transparency and control is a needed breath of fresh air.

Micron21’s cloud platform is built on an Australian Ceph cluster that spans three fully independent data centres. This architecture ensures data redundancy, resilience, and high availability, crucial for businesses with mission-critical workloads. It also utilises Intel® Xeon® Gold CPUs and enterprise-grade hardware to guarantee reliable and consistent performance across workloads. The result is a data centre solution that provides both affordability and performance.

Service levels dedicated to Australia’s mid-market

In contrast to the often remote and impersonal service offered by larger providers, Micron21 delivers hands-on, local support. This includes onsite assistance for deployments, troubleshooting, and ongoing infrastructure optimisation—enabling businesses to resolve issues faster and scale more efficiently.

“Having worked closely with many Australian mid-sized businesses, we know full well the impact of the skills shortage on them. By working with a provider such as us, who knows the ins and outs of the local business environment and regulatory landscape, mid-sized firms gain cost and performance advantages as well as the expertise to make the most of their investment,” says Braunegg.

Rob Hore, Director at Webres Solutions, echoes Braunegg’s point. “Having that is very important to us. Larger public cloud providers lack that personal connection and contact point. We appreciate Micron21’s localised support, they have been wonderful in that sense, not to mention a great initial experience running an instance on mCloud within just a few minutes,” adds Hore.

With increasing focus on compliance, privacy, and cybersecurity, many Australian businesses are re-evaluating their data handling and storage strategies. Micron21’s 100% Australian ownership and operation ensure full data sovereignty, a crucial consideration for industries handling sensitive customer data or operating under strict regulatory frameworks.

Equally important is how mCloud offers versatile deployment models across public, private, and hybrid cloud environments. This empowers businesses to design infrastructure aligned with compliance obligations, security requirements, and performance expectations. Critically, the platform also allows businesses to deploy their own hardware within the Micron21 ecosystem—a unique proposition that can unlock substantial savings while maintaining cloud scalability.

For Grant Morschel, owner of The Web Factory, the takeover of VMware and rocketing prices have forced the company to look at all availability alternatives, but it couldn’t find one that offers the high availability needed. That was until it engaged with Micron21. “mCloud has given us a fantastic degree of flexibility and the ability to tailor our solutions to our customers, and with no limitations,” says Morschel.

With the right tools, support, and cost controls in place, mid-sized businesses can fully harness the power of the cloud without being held back by cost uncertainty or one-size-fits-all providers.

Want to experience the difference mCloud can make to your business? Try the free trial.