Tony Stratton, driver of strategic growth in cloud innovation across the Asia-Pacific region
Australian cloud budgets are under compounding pressure. The Flexera 2026 State of the Cloud Report found that cloud-based AI workloads are driving wasted cloud spend up for the first time in five years, with organisations routinely exceeding cloud budgets by an average of 17%.
That is not a procurement problem — it is an architecture problem.
The structural answer is object storage. By separating large, unstructured data volumes from high-performance compute tiers and moving them to a dedicated tier with flat-rate pricing, organisations can stabilise a significant portion of their cloud spend regardless of what happens to global infrastructure pricing.
ThinkOn delivers object storage from Australian data centres — flat AUD pricing, no egress fees, Object Lock included, S3-compatible.
Glossary
Object storage: A storage architecture that manages data as discrete objects — each with its own metadata and unique identifier — rather than as a file hierarchy or block structure. It is optimised for large volumes of unstructured data such as backups, logs, archives, and media files.
Object lock (WORM): A data protection mechanism that makes objects immutable for a defined period — they cannot be modified, encrypted, or deleted. WORM stands for Write Once, Read Many.
S3-compatible: Refers to storage systems that implement Amazon S3’s API interface, allowing any backup or application tool built for S3 to connect without reconfiguration.
Egress fees: Charges applied by cloud providers when data is transferred out of their environment — to another provider, to on-premises infrastructure, or to the internet. Major hyperscalers charge between $0.05 and $0.20 per GB for egress.
Data sovereignty: The principle that data is subject to the laws of the country in which it is stored and processed. In Australia, this has specific legal implications under the Privacy Act 1988, the Privacy and Other Legislation Amendment Act 2024, and APRA CPS 234.
Immutable backup: A backup copy that is protected by object lock, preventing ransomware, accidental deletion, or malicious insiders from altering or destroying it during the lock period.
What is causing Australian cloud storage costs to rise?
Australian cloud storage costs are rising because AI infrastructure investment is flowing through to enterprise pricing, and hyperscaler billing complexity means hidden fees now account for nearly half of total cloud storage spend.
Two independent cost pressures are converging for Australian organisations in 2025 and 2026.
The first is the global surge in AI infrastructure demand. Hyperscalers are investing heavily in GPU capacity to serve generative AI workloads, and the capital costs of that build-out flow through to enterprise pricing. When organisations store backups, archives, and data lakes in compute-linked tiers used for high-performance workloads, their storage bills absorb a share of that infrastructure inflation — even if their own workloads have nothing to do with AI.
The second is billing complexity. According to the 2025 Wasabi Cloud Storage Index, additional fees beyond base storage capacity — egress, API requests, minimum duration charges, and lifecycle policy costs — accounted for 49% of total cloud storage spend for IT respondents in 2024. In one published AWS S3 example, 41% of the total bill came from fees beyond storage capacity alone. The Flexera 2025 State of the Cloud Report found 84% of organisations rate managing cloud spend as their top cloud challenge.
The fix is architectural, not contractual. Moving unstructured, high-volume workloads to a dedicated object storage tier with flat-rate pricing structurally separates those costs from the volatile compute market.
The fix is architectural, not contractual. Moving unstructured, high-volume workloads to a dedicated object storage tier, one with flat-rate pricing and no egress fees, structurally separates those costs from the volatile compute market.
What is the difference between object storage and block or file storage?
Object storage is optimised for large, unstructured data volumes at low cost — block storage is for high-performance workloads such as databases, and file storage is for shared access environments. The cost discipline principle: only pay for block storage when a workload genuinely requires it.
Block storage divides data into fixed-size blocks and is optimised for low-latency, high-throughput workloads such as databases and virtual machine operating disks. It is the most expensive tier and should be reserved for workloads that genuinely require it.
File storage organises data in a hierarchical directory structure, suited to shared workloads where multiple users or systems need concurrent access — network-attached storage, shared drives, and collaborative environments.
Object storage manages data as discrete objects with rich metadata, designed for large volumes of unstructured data that are written once and read occasionally — backups, long-term archives, log files, media assets, and data lakes. At scale, object storage is significantly cheaper per terabyte than block or file storage, and modern all-flash implementations have eliminated the performance trade-off that historically made it unsuitable for active workloads.
The cost discipline principle is straightforward: only pay for block storage when a workload genuinely requires block performance. Everything else should sit in object storage.
What are the hidden costs of hyperscaler cloud storage in Australia?
Australian organisations face four compounding cost variables in hyperscaler storage billing — egress fees, minimum duration charges, API request fees, and USD exchange rate exposure — none of which appear in initial estimates.
The main hidden cost categories to audit in any hyperscaler storage bill:
Egress fees. Major hyperscalers charge between $0.05 and $0.20 per GB when data moves out of their environment. For an organisation running 10 TB of monthly data movement, typical for backup restores, analytics, and DR testing, this equates to up to $900 per month in transfer costs alone. NAT Gateway and cross-AZ fees can add a further 50–200% on top.
Minimum storage duration fees. Some storage tiers charge for a minimum retention period — often 30 to 90 days — even after data has been deleted, making accurate budgeting difficult for workloads with variable retention.
API request fees. Reads, writes, lists, and lifecycle operations each carry per-request charges that accumulate rapidly at scale and are frequently the least visible line item on a cloud bill.
Currency exposure. USD-denominated billing means Australian organisations absorb AUD/USD exchange rate movements as an unbudgeted variable on every invoice. When AUD weakens, the cost of identical infrastructure increases without any change in usage.
ThinkOn’s object storage uses unit-based, AUD-denominated pricing with no egress fees and no minimum duration requirements, directly addressing each of these cost variables.
What Australian compliance requirements apply to cloud storage?
Australian organisations in regulated industries must satisfy the amended Privacy Act 1988, APRA CPS 234 and CPS 230, and sector-specific healthcare and e-discovery requirements — each with specific implications for where data is stored and under which legal jurisdiction.
Privacy Act 1988 and the 2024 amendments. The Privacy and Other Legislation Amendment Act 2024, which passed in November 2024 and took effect from December 2024, significantly strengthened Australia’s privacy framework. The OAIC now has expanded enforcement powers, with penalties for serious breaches reaching A$50 million or 30% of adjusted turnover. Organisations must demonstrate where personal data is stored, who can access it, and under which legal jurisdiction it operates.
APRA CPS 234 and CPS 230. CPS 234 requires all APRA-regulated entities to maintain information security capabilities commensurate with the scale of their data assets. APRA CPS 230, which took effect July 1, 2025, adds operational risk management requirements for service provider relationships. Both require documented data residency commitments from the storage provider.
Healthcare data. Clinical records, radiology images, and other health data carry specific residency and access obligations under Australia’s national health legislation. Storing this data with a provider subject to foreign surveillance legislation through a US parent company creates regulatory exposure that grows with each reform cycle.
WORM and e-discovery requirements. Regulated entities subject to legal-hold obligations need object storage with Object Lock capability — providing a verifiable, tamper-evident record that records have not been altered or deleted during the mandated retention period.
ThinkOn’s Australian infrastructure is physically located in Australia, operated by a locally incorporated entity, and offers contractual data residency guarantees — addressing the data residency and jurisdictional requirements under the amended Privacy Act.
What workloads are best suited to object storage in Australia?
| Workload category | ThinkOn fit |
| Backup & Disaster Recovery | Offload Veeam or Commvault backups to an S3-compatible tier with no egress fees during restores. |
| Long-Term Archiving | Move “cold” data out of expensive primary storage and into a secure, immutable archive. |
| Big Data & AI Lakes | Store massive amounts of unstructured data for analytics without the compute tax of high-performance instances. |
| Media Production & Streaming | High-throughput storage designed for video editing, rendering and content delivery. |
| AI/ML Data Lakes | Fast, parallel access to training datasets and inference data for machine learning models. |
| Analytics & Log Storage | A reliable repository for application, security and observability logs that require frequent queries. |
| Cloud-Native Applications | Backend storage optimised for microservices, web applications and SaaS platforms. |
| Collaboration & File Sharing | A scalable content repository for team workspaces and shared file systems. |
| Healthcare | “Hot” storage for radiology images and clinical data that require immediate accessibility. |
| Financial Data | Low-latency storage for financial records, accounting data and sensitive tax information. |
| Compliance & E-Discovery | Immutable, WORM-protected storage for regulated records and legal-hold requirements. |
| IoT & Telemetry Ingestion | High-volume landing zone for sensor data, device telemetry and edge-computing streams. |
What is Object Lock and how does it protect against ransomware?
Object Lock makes individual storage objects immutable for a defined period — enforced at the storage layer, not the application layer — so that even an attacker with full administrative credentials cannot encrypt or delete locked backup copies.
In a ransomware attack, the objective is typically to encrypt or destroy backup copies before triggering the ransom demand. An object-locked repository is structurally immune to this because the lock is enforced at the storage layer, independent of the operating system or application layer. Even if an attacker obtains full administrative credentials for a backup application, locked objects cannot be altered.
For Australian organisations subject to APRA CPS 234, an immutable, object-locked backup repository is one of the most auditable controls available — providing a verifiable, tamper-evident record that a clean recovery point exists regardless of what else may have been compromised.
ThinkOn integrates Object Lock across its object storage platform, enabling organisations to configure immutable retention policies aligned to their specific regulatory requirements.
How does ThinkOn’s object storage differ from hyperscaler alternatives?
ThinkOn’s object storage delivers flat-rate AUD pricing with no egress fees, Australian data residency, Object Lock, and S3-compatible connectivity — removing the three main sources of hyperscaler billing unpredictability and the foreign jurisdiction exposure that creates compliance risk for Australian regulated-sector organisations.
On pricing, ThinkOn uses flat-rate, AUD-denominated billing with no egress fees — removing egress charges and currency exposure from the cost model entirely. Minimum duration fees are also absent. For MSPs managing multiple customer environments, the multi-tenant architecture and partner-aligned pricing model keep storage costs predictable as the customer base scales. For enterprise IT teams, this means a single, variance-free infrastructure line item in annual budget planning.
On residency and compliance, ThinkOn’s infrastructure is physically located in Australia and operated by a locally incorporated entity. Object Lock is integrated across the platform. S3-compatible connectivity means Veeam, Commvault, and other leading backup platforms connect without reconfiguration.
ThinkOn’s all-flash object storage architecture is documented in a published case study with Pure Storage, covering how ThinkOn built a massively parallel object storage environment that eliminates the performance trade-offs historically associated with cloud archiving.
Ready to move backup, archive, and data lake workloads to a fixed-cost, Australian-hosted object storage platform? Explore ThinkOn Object Storage or contact the ThinkOn Australia team.
Key statistics and sources
- 17% average cloud budget overrun in 2026 — AI workloads driving wasted spend up for the first time in five years (Flexera 2026 State of the Cloud Report)
- 49% of total cloud storage spend accounted for by fees beyond base capacity — egress, API, minimum duration (Wasabi 2025 Cloud Storage Index)
- 41% of one AWS S3 bill came from fees beyond storage capacity alone (Wasabi, 2025)
- 84% of organisations rate managing cloud spend as their top cloud challenge (Flexera 2025 State of the Cloud Report)
- A$50 million or 30% of adjusted turnover — maximum penalty under the amended Privacy Act 1988 (OAIC, 2024)
- $0.05–$0.20 per GB egress fees charged by major hyperscalers (EgressCost.com, April 2026)
Sources: Flexera 2026 State of the Cloud Report; Wasabi 2025 Cloud Storage Index; Flexera 2025 State of the Cloud Report; OAIC Privacy Act 2024 amendments; EgressCost.com April 2026; APRA CPS 230 July 2025.