Cloud Storage
Object Storage
local storage is cheaper than object storage
Rethinking Total Cost: Why Object Storage is More Economical Than Local Storage
Many IT leaders believe local storage is cheaper than object storage based on hardware costs alone. This overlooks the substantial operational expenses that accumulate over a 3- to 5-year lifecycle. A total cost of ownership analysis shows a different picture.
The topic briefly and concisely
The belief that local storage is cheaper than object storage is misleading; a Total Cost of Ownership (TCO) analysis reveals on-premise hardware is only 25% of the total expense, with 75% consumed by hidden operational costs.
A predictable object storage model with no egress or API fees eliminates budget surprises and provides stable, defensible margins for MSPs and channel partners.
EU-sovereign object storage with geofencing is essential for GDPR, NIS-2, and EU Data Act compliance, providing a crucial defense against the reach of the U.S. CLOUD Act.
The assertion that local storage is cheaper than object storage is a common one, but it often crumbles under a full Total Cost of Ownership (TCO) analysis. While the upfront capital expenditure for on-premise servers is clear, it represents just 25% of the total cost over time. The other 75% is consumed by hidden operational costs: power, cooling, 24/7 staffing, hardware refreshes every 3 to 5 years, and complex software licensing . This article unpacks the true financial picture, demonstrating how a predictable, EU-sovereign object storage model eliminates these variables, offering a more cost-effective, secure, and resilient alternative for enterprise data.
Uncover the 75% of Hidden On-Premise Expenses
Initial hardware purchases for local storage are deceptive, often accounting for only 25% of the total cost . Operational expenditures frequently make up the other 75%, including significant electricity and cooling costs that can represent up to 40% of an IT budget . Furthermore, on-premise solutions demand constant management from dedicated IT staff for monitoring and troubleshooting around the clock .
Organizations must also factor in recurring costs that are often overlooked in initial calculations. These include:
Hardware Depreciation: Most server hardware becomes obsolete and requires a costly refresh every 3 to 5 years to maintain performance and security .
Physical Space: Data centers require dedicated, secure real estate, which carries its own set of costs for rent, construction, and maintenance .
Software Licensing: Managing on-premise storage often involves complex and expensive licensing for backup, recovery, and network management software .
Downtime Risks: Localized events, from power outages to natural disasters, pose a significant threat to data availability, with recovery costs running into the millions for a single incident .
Many businesses underestimate the 20-25% annual depreciation of their hardware assets . When you consider these ongoing expenses, the idea that local storage is cheaper than object storage becomes a financial fallacy. This complex cost structure makes budgeting unpredictable and scaling a slow, expensive process .
Shift to a Predictable, Zero-Egress Cost Model
In contrast to the unpredictable nature of on-premise costs, modern object storage provides financial clarity. Impossible Cloud offers a transparent economic model with no egress fees, no API call costs, and no minimum storage durations. This approach converts unpredictable capital expenditures into a stable, manageable operating expense, allowing for precise budget forecasting with over 95% accuracy.
This predictability is a strategic advantage for Managed Service Providers (MSPs) and resellers. By eliminating variable costs like data retrieval fees, partners can build BaaS and archiving services with defensible, predictable margins of 30% or more. The partner-ready platform includes a multi-tenant console and robust automation via API/CLI, facilitating onboarding in under 24 hours. Learn more about our transparent pricing model.
This model directly addresses the primary pain points identified by EU decision-makers: cost transparency and the risk of vendor lock-in. With expanding local access through distributors like api in Germany and Northamber plc in the UK, the transition to a predictable cost structure is more accessible than ever.
Achieve Digital Sovereignty and Regulatory Compliance
Beyond cost, data location is a critical factor for European businesses. Storing data on-premise does not automatically guarantee compliance with regulations like GDPR, especially if the controlling company falls under non-EU jurisdiction. The U.S. CLOUD Act, for instance, can compel U.S.-based tech companies to provide data regardless of where it is stored globally, creating a direct conflict with EU privacy laws .
Impossible Cloud is sovereign by design, operating exclusively in certified European data centers. This provides a definitive solution to regulatory challenges. Key compliance features include:
Country-Level Geofencing: Guarantees data remains within a predefined EU region, satisfying stringent data residency requirements for sectors like finance and healthcare.
GDPR and NIS-2 Alignment: Our operations are built to meet the continuous security and reporting requirements of the NIS-2 Directive, which mandates stricter cybersecurity measures for essential entities .
EU Data Act Readiness: From September 2025, the EU Data Act will enforce data portability. Our S3-compatible architecture ensures you can move data and metadata without lock-in .
Choosing a strictly EU-centric provider eliminates exposure to the CLOUD Act entirely. This legal certainty is a competitive advantage that local storage solutions tied to non-EU entities cannot offer. Explore our approach to sovereign, compliant storage.
Fortify Ransomware Defense with Immutable Storage
Ransomware attacks continue to rise, with recovery costs averaging over €1.5 million per incident. Local storage backups are a primary target for malware, which seeks to encrypt or delete them. Immutable storage with S3 Object Lock provides a powerful, modern defense that renders data unchangeable and undeletable for a set period .
This technology ensures that even if your primary systems are compromised, a clean, unalterable copy of your data is available for immediate recovery. This capability reduces potential downtime by over 90% compared to traditional recovery methods . Immutable backups mean you can restore operations in minutes, not days, without paying a ransom.
Implementing a 4-2-2 backup strategy (four copies, two locations, two immutable) with Impossible Cloud strengthens your resilience posture significantly. Our full S3-API compatibility ensures seamless integration with leading backup tools like NovaBackup, making it simple to add a secure, off-site, immutable copy to your existing workflows. This is a level of security that makes a compelling case against the idea that local storage is cheaper than object storage when risk is factored in.
Simplify Operations with an 'Always-Hot' Architecture
A common strategy to reduce costs in both local and cloud storage is data tiering—moving infrequently accessed data to slower, cheaper media . However, tiering introduces significant operational complexity and risk. Manual tiering workflows are inefficient, often resulting in less than 10% of cold data being moved, and automated policies can fail, leading to restore delays and unexpected retrieval fees .
Impossible Cloud’s “Always-Hot” object storage model eliminates these challenges entirely. All data is immediately accessible without tier-restore delays, which simplifies operations and ensures predictable performance for all applications. This architecture avoids the pitfalls of tiering, such as:
Lifecycle Policy Drift: Prevents misconfigurations that can lead to API timeouts or failed restores from cold tiers.
Hidden Retrieval Costs: Eliminates surprise fees for accessing tiered-away data, a common issue with hyperscaler pricing .
Backup Inefficiency: Avoids proprietary block-based tiering that can break backup applications and erode savings .
An always-hot model reduces operational complexity by an estimated 40% by removing the need to manage data lifecycle policies. This simplified approach, detailed in our guide to object storage savings, keeps your tools stable and your recovery times predictable.
Ensure Future Flexibility with S3 Compatibility and Portability
Vendor lock-in is a major concern for over 80% of IT decision-makers. Local storage often relies on proprietary hardware and software, making migrations complex and expensive. Impossible Cloud mitigates this risk by adhering to the industry-standard S3 API, ensuring your existing tools, scripts, and applications continue to work without code rewrites.
This commitment to open standards is not just about easy migration; it is about preserving your long-term freedom of action. Our support for advanced S3 capabilities like versioning, lifecycle management, and event notifications protects your past investments. As you plan your data strategy, consider how an S3-compatible platform provides a clear exit path, a core principle of the upcoming EU Data Act .
By choosing a platform built on interoperability, you retain negotiation power and can adapt your strategy as business needs change. This flexibility is a core component of a modern, cost-effective infrastructure. See how our S3-compatible storage compares.
Take Practical Steps Toward a Modern Storage Strategy
Additional useful links
Federal Statistical Office of Germany (Destatis) provides information and statistics related to economic prices in Germany.
Bitkom offers its Cloud Report 2024, containing charts and data on cloud computing trends and adoption in Germany.
Deloitte presents an article discussing technology, media, and telecom (TMT) predictions for 2025, with a focus on how FinOps tools can help lower cloud spending.
PwC provides an article (in German) on transparently saving costs through demand-oriented cloud resources, emphasizing cloud transformation.
Forrester offers a report titled "Embrace Cloud Economics For On-Premises Enterprise Storage," discussing the application of cloud economic principles to on-premises storage solutions.
KPMG features an article (in German) that aims to clarify cloud costs, discussing management and optimization strategies for cloud services within the financial services sector.
FAQ
What is the main advantage of object storage over local file storage?
The main advantage is scalability and cost-efficiency for large volumes of unstructured data. Object storage eliminates the high upfront costs and ongoing maintenance of local hardware. With a provider like Impossible Cloud, you also benefit from predictable pricing with no egress fees, enhanced durability, and built-in features for compliance and ransomware protection.
How does S3 compatibility help my business?
Full S3 compatibility ensures that your existing applications, backup tools, and scripts work seamlessly without any code changes. This protects your current technology investments, simplifies migration, and prevents vendor lock-in, giving you the freedom to move your data as needed.
What does 'Always-Hot' storage mean?
'Always-Hot' storage means all your data is instantly accessible at high performance speeds, without the delays or retrieval fees associated with tiered storage (moving data to 'cold' or 'archive' layers). This simplifies operations, makes costs more predictable, and ensures your data is always ready for immediate use.
How does Impossible Cloud ensure data sovereignty?
Impossible Cloud ensures data sovereignty by being a European company that stores all data exclusively in certified EU data centers. We offer country-level geofencing to keep your data within specific national borders, ensuring compliance with GDPR and protecting you from extra-territorial laws like the U.S. CLOUD Act.
Is it difficult to migrate from local storage to Impossible Cloud?
No, migration is straightforward due to our full S3 API compatibility. Most standard data management and backup tools can be configured to point to our storage endpoint in minutes. We provide expert support to help you plan and execute a smooth migration.
What makes your pricing model predictable?
Our pricing is predictable because we have eliminated the variable fees that cause budget overruns. We charge a simple, transparent rate for the storage you use and never charge for egress (data retrieval), API calls, or have minimum storage durations. You only pay for what you store.
