Cloud Hosting Costs: What to Watch For

Cloud hosting is cheap. That's the story most providers tell, and on paper it's true. A virtual machine with 4 cores and 8 GB of memory costs 40 to 80 euros per month. Compare that to a physical server costing thousands of euros and the answer seems simple.

But the monthly VM price is the start of the story, not the end. Anyone who judges cloud hosting solely on compute costs misses a large portion of the actual expenses. The Flexera State of the Cloud Report 2025 shows that 84% of surveyed organisations struggle to control their cloud spending. Budgets are exceeded by an average of 17%. That's not a small difference.

This article lays out the actual cost items. Not to scare you off, but to help you make an honest comparison.

The visible costs

The costs you see on a cloud provider's pricing page are typically compute, storage and network. That's what you pay for processing power (vCPUs and memory), storage space (SSD or HDD, per GB per month) and data traffic.

With the major hyperscalers (AWS, Azure, Google Cloud), compute is by far the largest item. Storage is relatively cheap: a few cents per gigabyte per month for standard SSD storage. Network is where it gets complicated, but more on that later.

With managed hosting and Dutch providers, the visible costs are often more straightforward. You pay a fixed amount per month for a package that bundles compute, storage, network and management. No surprises, but also less flexibility to choose exactly what you need.

The hidden costs

This is where most organisations get surprised.

Egress fees (outbound data traffic). With the major cloud providers, you pay not only for your server but also for every bit of data that leaves your network. AWS charges roughly $0.09 per gigabyte above the first 100 GB per month (that free tier was raised from 1 GB in 2024). That sounds negligible until you're running a web application that serves hundreds of gigabytes of content daily. At 1 TB per month, you're already at 80 to 90 dollars in pure data traffic, on top of your VM costs.

In the industry, this is called the "Hotel California effect": your data gets in easily, but getting it out is expensive. The EU Data Act (Article 34, in effect since September 2025) requires cloud providers to charge no more than actual costs for data transfer when switching to another provider. In practice, the regular egress rates haven't disappeared.

Cross-region and cross-AZ traffic. If you run workloads in multiple availability zones for redundancy, you also pay for traffic between those zones. At AWS, that costs $0.01 per GB in both directions. That sounds marginal, but for databases synchronising across multiple zones it adds up.

Management costs. A cloud VM doesn't manage itself. Someone needs to patch the operating system, configure the firewall, set up and test backups, set up monitoring, implement security updates and respond when something goes wrong. With managed hosting, that's included in the price. With IaaS, it isn't. Expect 4 to 8 hours per month when things are quiet. At an hourly rate of 80 to 120 euros, that's 320 to 960 euros per month in hidden costs.

Support. With most cloud providers, basic support is free, but if you want to speak to someone who understands your problem, you pay extra. AWS Business Support costs 10% of your monthly cloud spend, with a minimum of $100 per month. Enterprise Support starts at $15,000 per month. With a managed hosting provider, personal support is typically included.

Licences. If you run Windows Server or commercial databases like SQL Server on your cloud VMs, you pay licence costs on top of the compute price. These can double the costs. With managed hosting, this is often already factored into the monthly fee.

Pay-per-use vs. fixed rate

The pay-per-use model of cloud hosting sounds logical: you only pay for what you use. In practice, it works differently. Most organisations overestimate their resource usage. They provision VMs larger than needed, leave test environments running that nobody uses anymore, and forget to delete snapshots that cost a few euros every month.

Flexera reports that cloud spending exceeds budget by an average of 17%. 84% of surveyed organisations call cost control their biggest cloud challenge. That's not because cloud is inherently expensive. It's because the cost model is complex and requires active management to keep under control.

A fixed rate from a managed hosting provider works the opposite way. You know in advance what you'll pay. That makes budgeting easier, but it also means you pay for capacity you don't always fully use. The difference is predictability versus flexibility.

For organisations with stable workloads (a website, an online shop, an application that runs fairly constantly), a fixed rate is almost always more advantageous. Pay-per-use only becomes truly interesting with highly variable workloads: an online shop with peak traffic around Black Friday, a SaaS platform with unpredictable growth, or a media application with viral peak moments.

What does it actually cost?

Let's get concrete. A medium-sized company running a web application on a cloud VM with 4 vCPU, 16 GB RAM and 200 GB SSD:

With a major cloud provider (IaaS, self-managed):

VM: €70-100/month. Storage: €10-20. Egress (500 GB): €40-45. Backups: €15-25. Monitoring: €10-30. Management (external, 6 hours): €480-720. Support: €100+. Total: €725-1,040 per month.

With a Dutch managed hosting provider:

Everything included: €250-600/month. Including management, backups, monitoring, support and typically unlimited traffic.

The difference in monthly amount is clear. Cloud IaaS looks cheap on the pricing page but becomes expensive once you include the total operational costs. Managed hosting is more expensive in the base price but cheaper in total costs, unless you already have a team that can manage the cloud.

Controlling costs: where to start?

Whether you choose cloud IaaS or managed hosting, there are a few basic principles to keep costs under control.

Right-sizing. Most VMs run at 10 to 20% of their capacity. Monitor your actual CPU and memory usage and scale back to what you need. With the major providers, you can automate this with tools like AWS Compute Optimizer or Azure Advisor.

Reserved instances. If you know you'll need a VM for at least a year, reserved instances offer 30 to 60% discount compared to on-demand rates. The trade-off is commitment: you pay for the reservation whether you use the VM or not.

Tag everything. Give every resource a tag with the department, project and owner. Without tags, it's impossible to find out where your money is going. This sounds like administration, but it's the difference between control and guessing.

Clean up automatically. Set alerts for unused resources. A test VM that runs for three months without anyone accessing it quietly costs hundreds of euros. Create a policy: resources without activity are automatically stopped after 30 days.

Minimise egress. Use a CDN for static content, compress what you send, and consider whether you can keep your data in the same region as your users. Every gigabyte that doesn't leave your network is a gigabyte you don't pay for.

The bottom line

Cloud hosting isn't cheap or expensive. It depends on how you use it, what you count, and how well you control the costs. The VM price on a pricing page is the start of the story. Actual costs are 2 to 4 times higher when you include management, support, licences, data traffic and wasted resources.

The most important question isn't "what does a cloud VM cost" but "what does it cost to run my application reliably, securely and managed". Answer that question with all costs included and you'll make a choice based on facts rather than marketing prices.

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