Managing cloud spend is the number one challenge for MSPs in 2026. Not cybersecurity. Not talent. Not AI adoption. Cloud spend.
That is what Flexera found when it surveyed 753 cloud decision-makers and IT leaders for its 2026 State of the Cloud Report — 85% of respondents named managing cloud spend as their top challenge, and organizations continue to report cloud costs exceeding budget year after year. For MSPs running client workloads on hyperscaler infrastructure, the problem is structural. The billing model was never built for predictability. It was built for growth.
The Billing Model Nobody Reads Carefully Enough
Hyperscaler pricing looks simple on the surface. Pay for what you use. Scale up, scale down. No long-term commitment.
In practice, MSPs managing multiple client environments deal with a pricing structure that touches compute, storage, networking, egress, API calls, support tiers, premium features, and licensing — each with its own rate card, tiering logic, and usage dependencies. A client with a busy month, a backup job that runs heavier than expected, or an application that generates more data movement than scoped can push a monthly invoice well past what was quoted.
Egress fees are among the most common culprits. Moving data out of a hyperscaler environment — to a client’s on-premises setup, to a backup destination, or between regions — triggers charges that are difficult to forecast and easy to underestimate. Cloud egress fees can increase storage bills by three to five times compared to base storage costs, creating the kind of budget unpredictability that MSPs absorb directly when running fixed-fee service contracts.6
When an MSP bundles cloud infrastructure into a flat monthly fee, a client-side spike in egress or API usage does not show up on the client’s invoice. It shows up on the MSP’s margin.
The Margin Trap
The cloud billing problem does not stay contained. It creates a margin trap with no easy exit.
MSPs in 2026 are being squeezed from two directions simultaneously. On the client side, businesses facing economic uncertainty are scrutinizing IT spend more closely, asking harder questions about ROI, and pushing back on renewals. On the cost side, MSPs are absorbing higher expenses for talent, security infrastructure, and tooling — without the ability to raise prices to match.4 The managed services market is growing, but as Omdia’s 2026 MSP analysis makes clear, true organic growth is difficult amid commoditization and margin compression.3
Hyperscaler billing adds a third variable that MSPs cannot fully control: the cost of the underlying infrastructure itself. And unlike labor costs or tool spend, it can change from month to month with no warning and no ceiling.
The MSPs losing ground are the ones trying to hold margin by billing clients at a markup on consumption spend. Every spike in the hyperscaler invoice becomes a conversation nobody wanted to have.
What the Data-Conscious MSPs Are Doing
The MSPs holding their margins are removing that variable from the equation.
Rather than reselling hyperscaler capacity at a markup, they source wholesale cloud infrastructure at predictable, fixed pricing — and build their margin in deliberately, rather than hoping it survives each billing cycle.
Flexera’s 2026 report shows that organizations are already shifting left on cost discipline, investing earlier in architectural and cost planning rather than attempting to optimize after the fact.2 For MSPs, that shift starts at the infrastructure layer. You cannot build predictable service pricing on top of unpredictable infrastructure costs. The math does not work.
The alternative does not require sacrificing performance or coverage. Wholesale cloud infrastructure built specifically for MSPs offers the same range of compute, storage, and networking capabilities — with fixed pricing that makes margin calculation straightforward from day one.
What Predictable Infrastructure Pricing Changes
When you know exactly what a workload costs to run, you can price it with confidence.
You can quote a fixed monthly fee without building in a buffer for billing surprises. You can take on new clients without worrying that a high-usage month will turn a profitable engagement into a loss. You can model margin at the service level rather than reconciling it after the invoice arrives.
It also changes what you can offer. MSPs running on wholesale infrastructure — with access to a broad range of locations, compliance-ready data centers, and white-label delivery — can serve clients that the hyperscaler resale model never made viable. Clients with data residency requirements. Clients in regulated industries. Clients who want a branded experience from their MSP rather than a sub-account with a hyperscaler they already have their own relationship with.
Built for MSPs, Not Enterprise Buyers
AVETTA Cloud was built for managed service providers. Not enterprise IT departments. Not startup dev environments. MSPs who need wholesale infrastructure they can deliver under their own brand, at a price that makes sense across their entire client base.
With 29 owned and operated locations across the US, Canada, Mexico, London, and Amsterdam — and access to 71 locations worldwide — AVETTA Cloud gives MSPs the geographic coverage to serve multi-location clients without routing workloads through a single hyperscaler region. Pricing is fixed. Support is live. The infrastructure is yours to brand.7
If your cloud spend has been harder to predict than your service contracts allow for, the conversation about alternatives is worth having.
References
- Flexera, 2026 State of the Cloud Report (May 2026) — managing cloud spend named top challenge by 85% of respondents; 753 cloud decision-makers and IT leaders surveyed.
- Flexera, 2026 State of the Cloud Report — cost optimization after migration dropped from third to fifth ranked challenge as organizations shift left on cost planning.
- Omdia / Acronis, MSP Trends and Predictions 2026 (February 2026) — managed services market growing at 10% in 2026; true organic growth difficult amid budget pressure, commoditization, and margin compression.
- NetSuite, Top 10 MSP Challenges in 2026 (May 2026) — budget pressure squeezing MSPs from client-side ROI scrutiny and rising internal costs simultaneously.
- NinjaOne, The Price Gap Problem: Why MSP Margins Are Quietly Shrinking (June 2026) — Omdia 2026 MSP market analysis: total managed services revenue $635 billion, growing at up to 10% year over year; true organic growth difficult for most providers.
- Impossible Cloud, Google Cloud Egress Fees Explained — cloud egress fees can increase storage bills by three to five times; when MSPs bundle cloud storage into fixed-fee contracts, egress spikes directly erode service margin.
- AVETTA Cloud, Overview — 29 owned and operated locations; access to 71 worldwide; fixed pricing positioning versus hyperscalers. (AVETTA Cloud proprietary data.)
