Public clouds are often seen as the go-to choice for startups and SMBs looking to save costs, increase efficiency, and scale for growth. The big three public cloud providers, Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, promise agility, scalability, and reduced infrastructure burden.
However, this is far from the reality that countless organisations believe. Many businesses soon realise that what began as a cost-effective migration can quickly transform into a nightmare of spiralling costs and operational lock-in.
The reality of cloud computing is not as simple as it seems and is far more complex and needs a closer look. The public cloud challenges encountered are not just technological, but also in our perceptions. This is where the sunk cost theory and vendor lock-in problem in cloud computing come in.
In this guide, BlackBox Hosting breaks down the cloud-cost saving myths, what the sunk cost fallacy is, and the enduring vendor lock-in problem in cloud computing, so that you gain a balanced perspective of your cloud choice, without becoming trapped.
What’s the Sunk Cost Fallacy?
The sunk cost fallacy isn’t just related to technology, but is the tendency to continue a behaviour or endeavour once an investment in money, time, or resources has been made – even if it’s no longer beneficial. This bias is a result of ongoing commitment, which can distort thinking into making decisions that may not be favourable for the long term, but seem too overwhelming to change course.
In cloud computing, this fallacy shows up when teams stick with a public cloud platform because they’ve already invested time, effort and money, even as costs rise exponentially and flexibility is limited.
We tend to justify this approach and overlook better services by different cloud providers that may serve your needs better. Instead of switching, we decide to stick with the initial choice due to the sunk costs, thereby potentially compromising a better future outcome.
Hundreds of organisations, from startups to enterprises, face the same problem every year. What your business needs is a more rational approach and to move beyond the perception that a public cloud will be better for your business.
The Hidden Cost Curve of AWS, Azure, and Google Cloud
Public cloud services are easy to get into, onboarding is free or cheap, dashboards are intuitive, and managed services promise to “just work.” But behind the initial simplicity lies a long tail of costs:
- Egress fees: Data egress charges that punish you for moving your data out. Charges are typically between 5 and 20 cents per GB every time you move.
- Vendor lock-in problem in cloud computing: Proprietary services that lock you into a specific ecosystem.
- Complex pricing models: Pricing options make planning and forecasting cloud budgets nearly impossible.
- Technical debt: Accumulating cost of rework due to quicker vendor-specific implementations (think Lambda functions, Azure Functions, BigQuery schemas).
Over time, cloud bills creep up. What began as £500 per month becomes £5,000, then £50,000, in small incremental steps that you find yourself justifying. In reality, you may be underestimating or overlooking the unexpected expenses that add up to the hidden costs in public clouds.
Why Leaving Becomes So Hard
Cloud migration is sold as “flexible,” but in reality, the deeper you go, the more you’re entangled:
- Data gravity makes it expensive to move large datasets elsewhere.
- DevOps tooling becomes customised to each provider’s ecosystem.
- Internal training and hiring are often aligned to a specific cloud skillset.
- Compliance and architecture are built around vendor-native services.
By the time your team realises they’ve overcommitted, you’re facing a choice between paying more every month or paying a lot to leave.
Breaking Free – What You Can Do
The first step towards breaking free from this decision dilemma is understanding and accepting these public cloud challenges. Here’s what you can do:
Run a Cloud Cost Audit
Use independent tools or advisors to analyse what you’re really spending, including hidden fees and inefficiencies.
Prioritise Portability
Where possible, move to open standards like containers over functions, PostgreSQL over proprietary DBs, and Terraform over CloudFormation.
Hybrid or Private Cloud Models
For some workloads, especially predictable or heavy-lift ones, moving to a managed private cloud or colocation setup can deliver significant savings without sacrificing control. Learn more about our private hosting services and sign up for a 30-day trial to experience the difference.
Avoid Vendor Lock-In from Day One
New deployments? Think twice before diving into proprietary services just because they appear convenient.
Overcome Public Cloud Challenges & Reclaim Your Cloud Strategy with BlackBox Hosting
The cloud is a great option for businesses looking to move away from on-premises servers and enjoy the benefits of flexibility, scalability, and potential cost efficiencies. But this is only possible when you plan ahead and read the fine print when choosing a cloud hosting provider.
If you’re feeling trapped by your cloud provider, it’s your sign to make a change. But admitting the sunk cost is just that, a sunk cost, is the first step toward regaining financial and technical control.
Recognising the sunk cost fallacy in your cloud spend can free your team to make smarter and more strategic decisions. Whether that means optimising your public cloud usage, reassigning workloads, or exploring alternative platforms, one thing is clear:
It’s not too late to pivot to BlackBox Hosting’s services.
With us as your private cloud hosting partner, you gain:
- BlackBox’s single server hosting at 43% and 50% cheaper than Azure and AWS servers, respectively.
- 99.999% network uptime guarantee.
- No lock-ins and restrictions.
- Transparent billing that never punishes you for scale.
- UK-based ISO 27001-certified data centres.
- Clear BlackBox Hosting Service Level Agreement (SLA) for the highest levels of service.
But the longer you wait, the more expensive your burden can get for you.
Take action today; call us on +44 (0)203 740 7840.
