infoTECH Feature

February 21, 2023

Cloud Backup Costs: 2023 Guide

What Is Cloud Backup?

Cloud backup typically refers to a method of storing data backups on remote servers, accessed through the Internet, instead of on local storage or physical tapes. This allows for easy access to data and ensures data availability even in case of disaster or hardware failure on the local side. The data is typically stored in multiple, redundant locations for increased security and reliability.

However, there are other ways to store cloud data. In some cases, cloud backup solutions may provide on-premises or hybrid options for backing up the data used by cloud services. For example:

  • Public cloud backup: This involves storing data backups on servers that are maintained by a third-party service provider and made available to the public over the internet. Data is stored on shared resources in a multi-tenant environment, making it a cost-effective solution for small businesses and individual users.
  • On-premises backup of cloud data: This involves backing up cloud data to a local storage device or server that is located on the customer's own premises. This allows customers to have direct control over their data backups and provides an additional layer of security.
  • Hybrid cloud backup: This combines elements of both public and on-premises backups. Data is stored both on the customer's own premises and on remote servers, providing a balance of security, cost-effectiveness, and accessibility.
  • Hosted/private cloud backup: This involves storing data backups on servers that are owned and maintained by a third-party service provider, but are dedicated solely to a single customer. This provides a higher level of security and privacy compared to public cloud backups, as the customer's data is stored on isolated, dedicated resources. Hosted/private cloud backups are typically more expensive than public cloud backups, but are often used by large enterprises that have strict security and privacy requirements.

Why Is Cloud Backup Important?

There are several reasons why cloud backup is an important aspect of data protection and management.

Security and Compliance

A cloud backup solution typically provides enhanced security and compliance management capabilities, making it easier to meet the requirements of data security regulations. Data is stored on remote servers, away from the potential risks of local hardware failure, theft, or natural disasters. This makes it much less likely that sensitive data will be lost or stolen. Cloud backup solutions are often designed to meet various security and regulatory requirements, such as HIPAA or PCI DSS, which are critical for businesses that handle sensitive data.


As the amount of data grows, it becomes increasingly difficult to manage and store on local devices. Cloud backup eliminates the need for local storage capacity and enables businesses to scale their backup solutions as their data grows. This means that businesses can continue to protect their data without worrying about running out of storage space.

Another advantage of cloud-based storage and backup services is that they tend to have flexible pricing models. Thus, cloud backup solutions are easier to scale than on-premises backup systems.


Cloud backup providers typically invest in highly redundant systems, with multiple layers of backup, to ensure that data is protected even in the event of server failures. Storing backups off-site enables organizations to access their data even if the local system is down.

In addition, many cloud backup solutions use data deduplication and compression techniques to minimize the amount of data that needs to be stored, which reduces the cost of cloud backup and makes it more affordable.

Cloud Backup Pricing Breakdown

Organizations often miscalculate the cost of adopting a cloud backup solution because they overlook or underestimate the costs of data transfer, data storage, and ongoing maintenance and support. Cloud costs differ from on-premises costs because they often include hidden or unpredictable charges.

When adopting a cloud backup solution, there are two main cost factors that organizations need to consider:

  • Data storage costs: What an organization must pay to store their data on a cloud server. These costs depend on the amount of data being stored and the length of time that the data will be stored on the server. The cost of data storage can also vary depending on the level of security and redundancy provided by the cloud backup provider.
  • Data transfer costs: The cost of uploading data to the cloud server and downloading it when needed. Data transfer costs can be high if a large amount of data needs to be transferred, and the costs can be further impacted by the speed of the Internet connection. Organizations need to factor in the cost of data transfer when choosing a cloud backup solution to ensure that it is cost-effective for their needs.

For example, see the pricing structure for AWS, starting with storage costs. Here are some of the pricing option for the US East (Ohio) region:

  • S3 Standard Tier: Between $0.021 and $0.023/GB per month.
  • S3 Intelligent Tiering: Between $0.004 and $0.023/GB per month.
  • Standard Tier (infrequent access): $0.0125/GB per month.
  • S3 Glacier Tier: Between $0.00099 and $0.004/GB per month, depending on the retrieval options (deep archive, flexible retrieval, or instance retrieval).

There are other options available, but this sums up the range of pricing options.

Next, you have to pay for retrieval requests. For example (in US East):

  • COPY, PUT, POST, or LIST requests: From $0.005 per 1k requests (Standard Tier) to $0.05 per 1k requests (Glacier Deep Archive).
  • Other requests (SELECT, GET, etc.): From $0.0004 (Standard Tier) to $0.01 (Deep Archive) per 1k requests.
  • Data retrieval: From $0.025 per 1k requests (bulk retrieval from Glacier Deep Archive) to $10.00 per 1k requests (expedited archive access).

Most significantly, transferring data also costs:

  • Outbound transfer to the Internet: $0.09/GB for first 10 TB, $0.05/GB above 150 TB per month.
  • Outbound transfer to AWS services: Up to $0.02/GB per month.
  • Transfer acceleration: Between $0.04 and $0.08/GB, depending on the region.

In addition, AWS charges for data replication, management, analytics, and services like S3 Object Lambda. For example, monitoring in the US East region costs $0.20/million objects per month for the first 25 billion objects and $0.12/million objects after the first 100 billion objects. Analytics jobs cost $0.25 each (for batch processing). Thus, it is important to consider the cost of optional services and requests.

Key Points to Consider for Backups Using Cloud Storage

Here are some important things to consider when planning your cloud storage and backup strategy.

Monitoring Cloud Backup Costs

Regularly monitoring cloud backup usage and costs can help organizations identify aspects that they can optimize their usage and reduce costs.

Here are some steps to monitor cloud backup costs:

  • Use the cloud provider's management console: Most cloud storage providers offer a management console that provides detailed information about storage usage and costs. Use this console to regularly monitor and track cloud backup costs.
  • Set up alerts: Set up alerts to notify you when cloud backup costs exceed a certain threshold. This will help you quickly identify any unexpected spikes in costs and take action to reduce them.
  • Analyze backup patterns: Analyze backup patterns to identify any trends or anomalies in cloud backup costs. This can help you understand which backups are consuming the most resources and determine if any backups should be optimized.
  • Use reporting tools: Use reporting tools to generate reports that provide detailed information about cloud backup costs. This can help you better understand cost patterns and identify areas where you can optimize your backup strategy and reduce costs.
  • Regularly review cost optimization strategies: Regularly review and evaluate cost optimization strategies to ensure that they are still effective in reducing costs.

By following these steps, organizations can effectively monitor cloud backup costs and take steps to reduce costs as needed.

Know When to Choose Hot of Cold Storage Tiers 

Hot storage refers to data that is frequently accessed and requires fast retrieval speeds. This type of data storage is typically used for operational data, such as databases, and requires high-speed storage solutions, such as solid-state drives (SSDs) or RAM (News - Alert).

Cold storage refers to data that is infrequently accessed and has a slower retrieval speed requirement. This type of data storage is often used for archival data and requires low-cost storage solutions, such as magnetic disk drives.

In cloud offerings, different storage tiers are used to categorize data based on its frequency of access, cost, and performance requirements. For example:

  • High-performance storage: This tier is used for hot storage and includes fast storage options, such as SSDs or NVMe drives, for fast data retrieval and low latency.
  • Cost-effective storage: This tier is used for cold storage and includes magnetic disk drives for infrequently accessed data, and provides a balance between cost and performance.
  • Archive storage: This tier is used for long-term data retention and includes cloud-based solutions such as Amazon S3 Glacier and Microsoft (News - Alert) Azure Archive, which provide low-cost storage for infrequently accessed data.

It is important to choose the right storage tier for each type of data used in the cloud to ensure the right balance between accessibility or performance and cost effectiveness.

Implement Data Retention Policies

A data retention policy is a set of guidelines that specify how long a system must keep data, what types of data must be kept, and what data can be deleted. This policy helps organizations manage their data storage and ensure that they are in compliance with legal or regulatory requirements. For example, financial data must be kept for a certain number of years for tax purposes, while healthcare data must be kept for a minimum of 7 years to meet HIPAA regulations.

Compress and Deduplicate Data to Reduce Costs

Data compression and deduplication are two methods used to reduce the amount of data that must be stored and transferred, thereby reducing cloud backup costs.

Data compression involves reducing the size of a file by removing redundant data and using algorithms to compress the remaining data. Compressed data takes up less space, which means that organizations can store more data in the same amount of storage space. This reduces the cost of data storage and data transfer, as less data needs to be stored and transferred.

Deduplication is a process that eliminates redundant data, such as multiple copies of the same file, from a data set. This reduces the amount of data that must be stored and transferred, as only one copy of each unique file is stored.


Cloud backup is an essential part of data management for organizations of all sizes. However, the cost of cloud backup can vary greatly depending on a variety of factors, including data storage costs, data transfer costs, and the level of security and reliability offered by the cloud backup provider. Organizations must take these factors into account when choosing a cloud backup solution to ensure that it is cost-effective for their needs.

In the end, organizations must carefully evaluate their needs and choose a cloud backup solution that provides cost-effective data storage and data transfer options, as well as meets their data management, security, and regulatory compliance needs. With the right cloud backup solution in place, organizations can ensure the security, reliability, and scalability of their data and meet their data management needs in a cost-effective manner.


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