Mastering Cost Optimization: A New Look at Tiered Storage Solutions for MSPs

In today’s cloud-focused world, managed service providers (MSPs) are under constant pressure to deliver top-quality data management and performance while keeping costs affordable for their clients. One increasingly popular strategy to achieve this is cloud storage tiers—where “hot” data is stored in the highest-performance (and most expensive) storage tiers and “cold” data is stored in less costly lower-performance storage tiers. With tiered storage, the goal is to find the ideal balance between performance and cost-effectiveness in storing client data. On the surface, this can seem like a smart, simple approach: use high-performance storage when it matters most, and lower-cost options when it doesn’t.

Reality, however, isn’t so simple. According to the 2025 Wasabi Cloud Storage Index report, 62% of companies still find themselves going over budget when using cloud storage. The main problem isn’t poor planning, it’s the growing complexity of tiered storage solutions and the various hidden fees built into hyperscale cloud pricing models for each storage tier.

What should be a straightforward way to control costs has evolved into a tangle of tiered pricing combined with a myriad of add-on fees. The big cloud providers quickly realized they could turn cloud tiering into a whole new revenue stream, which is in direct opposition with your own revenue potential. It’s time for MSPs to regain control and deliver what their clients need—without the creeping costs.

How a traditional cloud tiering service works

Hyperscalers offer a range of tiered storage solutions to help clients get a mix of high-performance storage for their most critical data and lower-priced storage for rarely accessed data. The higher the performance, the higher the price. This cloud tiering strategy is supposed to enable clients to optimize storage costs based on a balance between costlier, high-performance storage and more cost-effective storage that doesn’t require the same level of performance.

However, the data storage tiers offered by hyperscalers are complex. For instance, AWS offers six different storage tiers, each with different pricing and fees that vary in type and cost based on the tier of service and storage region selected. Fees for access and retrieval (among other things) can add up quickly and billing isn’t straightforward or transparent.

The problem with multi-tiered cloud storage

Depending on how often your clients access their data and the number of objects stored, it’s very likely that cooler or cold object storage class tiers will not end up saving you money.

Hidden fees make colder tiers much more expensive

Hyperscalers charge small fees for many different actions, from initial upload (PUT fees) of data, to monitoring and automated tiering fees, to data retrieval. And because cold storage tiers theoretically store data that will not be accessed (or very rarely), those data retrieval fees are actually the highest priced out of all the tiers. That means the ultra-low cost of cold storage can be misleading if you need to access your data.

Here’s a more detailed breakdown of fees:

Initial upload of data to storage

In data storage, a PUT request refers to an order to write or upload data to a storage location, such as a cloud storage bucket. Most cloud storage is object storage, which means data is broken into many objects. For instance, a 100 TB data backup could be made up of 100 million individual objects of 1 MB each. Each object needs to be written to storage, and each requires a PUT request. PUT fees are charged per 1,000 requests, so writing 100 million objects to storage means 100,000 individual PUT fees (100 million divided by 1,000).

Using current AWS S3 storage tiers pricing as an example, data stored in S3 Standard costs $23 per TB per month—so the 100 TB backup would cost $2,300 each month. However, the PUT fee per 1,000 requests is $0.005, which would add $500 to the bill the first month for initial upload.

AWS’s least expensive tier, S3 Glacier Deep Archive, costs $0.99 per TB per month—so storing the 100 TB backup there would cost only $99 each month (at least on the surface). The PUT fee per 1,000 requests in this tier is $0.05, which is 10 times higher than the PUT fee on the highest tier. So initial upload of the 100 TB backup to this tier will cost $5,000.

To sum up, the cost to upload and store that 100 TB backup for one month on AWS S3 tiers would be:

• S3 Standard – highest-performance, highest-cost storage tier - $2,800

• S3 Glacier Deep Archive – lowest-performance, lowest-cost storage tier - $5,099

Index

Many hyperscalers charge monitoring and automation fees when they perform regular checks on stored data to determine when and where it should be moved. While AWS doesn’t charge for data transfer between their own tiers of service, it does charge for automated tiering. These fees are typically $0.0025 per 1,000 objects per month, so the more data your clients have under monitoring, the more expensive this will be. In our example of the 100 TB backup, this adds $250 per month to storage costs.

Exit

It’s very expensive to retrieve data from archived storage tiers. Many storage providers also have specified wait times, such as 30 or 90 days after initial upload, before clients can retrieve stored data without incurring fees that are triple the regular cost. Other retrieval fees include:

• API request fees – Clients pay just for the request to retrieve their data, such as the GET S3 API request.

• Data retrieval fees – If a client’s data is stored in cold storage or Glacier tiers like S3 Glacier Flexible Retrieval or Deep Archive, they’ll be charged a per-GB fee to access it.

• Egress fees – Finally, clients pay an additional charge for transferring any data out of the cloud.

All of these fees can add up to unwelcome surprises on monthly bills. Depending on how often your clients need to access their data, fees can make even the lowest-priced storage cost-prohibitive. This combination of fees across hyperscale cloud tiers makes it extremely challenging for MSPs to price cloud storage offerings and not lose their margins or their clients as storage costs balloon.

Your clients’ data is hotter than they might realize

It might be easy for a client to say that inexpensive cold storage, even with higher fees, is fine—because they’ll never need to access that data. But can they be completely sure?

The 2025 Wasabi Cloud Storage Index report found that organizations classified only 18% of their data as cold, and that the remaining 82% is categorized as “active.” That’s a lot of active data that clients will want to retrieve, and even once-a-month retrieval can result in skyrocketing fees that blow a storage budget. And if the worst-case scenario occurs and a client needs to retrieve their coldest data, they could be hit with a surprising bill at the end of the month.

Take a new approach to cloud storage with Wasabi

Cloud storage doesn’t have to be so complicated—or costly. With Wasabi, you get cloud storage that truly is simple and straightforward. We don’t offer complex storage tiers or charge hidden fees that boost storage prices sky-high.

Wasabi Hot Cloud Storage is a single tier of highly performant cloud storage (comparable to AWS S3 Standard in terms of performance) with no fees for egress or API requests for predictable, affordable total costs. No billing surprises. No worries about blowing clients’ budgets. Which means it’s easy to price out an offering for your clients and grow your margins with confidence.

We also offer solutions that make it even easier to serve your clients while also supporting your bottom line:

• Reserved Capacity Storage – Purchase cloud storage in 1-, 3-, or 5-year increments and get deeper discounts for term and capacity.

• Wasabi Account Control Manager – Greatly simplify cloud object storage-as-a-service with the comprehensive tool that simplifies multi-tenant account management, billing, and reporting.

• White-labeled storage with Custom Cloud Console – Offer clients Wasabi cloud object storage with your own branding and messaging to enhance your client experience and drive your brand forward.

Build your cloud offering with confidence 

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