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Tech debt is the concept of taking shortcuts in the short term, leading to issues in the long term. In the same way as taking a loan to solve a present issue will lead to costs in the future when it comes to repayment, making short-term decisions for your infrastructure in the present will lead to long-term issues, both financially and in time needed for resolution. 
There are many ways a business can accumulate tech debt in the realm of cloud hosting, but the most common is opting for a seemingly cheap cloud solution without consideration of the long-term impact of this choice. In this insight, we explore several ways in which this tech debt can manifest, the issues this can cause, and how to avoid taking on tech debt in the first place. 
<h2>The hidden costs of cheap cloud solutions</h2>
Businesses are often initially drawn to cloud solutions which, at first glance, appear cheap. This could be a public cloud environment with a hyperscaler, or a platform with a budget cloud provider. Whether you are a startup, small business, or a larger organisation looking to set up your infrastructure on a budget, the low upfront costs of these options can be appealing. Many providers will also advertise their cloud solutions as ‘plug and play’ &#8211; ready to use without an initial configuration process &#8211; giving the impression of rapid deployment. The combination of these factors can make these solutions seem ideal for initially setting up your infrastructure, either with the aim of scaling the solution for the long-term, or as a starting point to be upgraded as the business grows. 
However, there are a number of ways in which these seemingly cheap solutions can actually end up costing you more, further down the line. 
<h3>Low performance</h3>
With many cheap, multi-tenant cloud solutions, there are insufficient resources available for the number of users. This occurs when the provider is looking to increase their profits by having as many users as possible on the shared hardware, but in practice, when all users are trying to run their platforms, resources are spread too thinly. You may also experience the ‘noisy neighbour’ problem with these solutions, where another user is heavily using the shared resources, meaning fewer are available for you. The effect of this on your sites or applications include slowed performance, bottlenecks, latency and downtime, all of which end up costing your business. 
<h3>Security risks</h3>
Low-cost cloud solutions may not have fully-comprehensive security features, and the providers may not be as rigorous around compliance. While this may not be an initial consideration, you should bear in mind the potential costs of a data breach or cyberattack. A <a href="https://www.gov.uk/government/statistics/cyber-security-breaches-survey-2024/cyber-security-breaches-survey-2024#summary">2024 study from the UK government</a> found the average cost of the most disruptive attack on businesses of any size to be £1,205, increasing to £10,830 for medium and large businesses. The cost of a breach will generally significantly outweigh any initial savings from an insufficiently protected cloud solution.
<h3>Scalability challenges</h3>
While your environment may meet your initial needs, it is likely that, as your organisation grows, your resource and performance needs will change. If this is not initially planned for, this could come with unexpectedly high costs, as well as taking up valuable time, to scale up your resources, or retro-fit more powerful hardware and software. In times of growth, you will want to adapt dynamically in order to best take advantage of new opportunities, and these budget cloud solutions can limit you in this respect.
<h3>Vendor lock-in</h3>
Once your infrastructure is fully reliant on a ‘cheap’ solution with a provider, they will often employ tactics to make you feel trapped into staying with them, a process known as <a href="https://www.hyve.com/insights/how-to-avoid-vendor-lock-in/">vendor lock-in</a>. This can include making their infrastructure incompatible with other systems and fees for moving data, making migration or diversification costly. If you feel like you have outgrown the initial cheap cloud solution, it can be difficult and expensive to migrate away, or integrate an environment from another provider in a hybrid or multi-cloud approach. 
<h3>Lack of management</h3>
Cheap cloud solutions are usually unmanaged, meaning the day to day running, monitoring, and optimisation of your infrastructure must be managed in-house. Our <a href="https://www.hyve.com/wp-content/uploads/2024/10/Hyve-IT-Skills-Gap-Report.pdf">recent report</a> showed that, with the current state of the job market, 84% of UK business leaders are facing an IT and tech skills shortage. Due to this skills gap, there is a higher demand for in-house expertise, leading to higher salaries and a slow search for candidates, another hidden cost of these cloud solutions. Furthermore, 53% of respondents reported that they often settle for less qualified IT professionals due to a lack of suitable candidates. If the staff managing your cloud solution are underqualified or inexperienced, it is likely you will experience issues and delays, costing you further time and money.
<h2>Making cost-effective cloud hosting decisions to avoid tech debt</h2>
<h3>Consider Total Cost of Ownership (TCO)</h3>
An important concept to consider when analysing cloud solutions is the Total Cost of Ownership (TCO). This measure requires you to consider the costs across the lifetime of your infrastructure, including upfront costs, operation costs, scalability requirements and potential future upgrade needs. When you take this long-term approach, and make your decisions accordingly, it is easier to have an awareness of potential long-term hidden costs, and avoid tech debt. 
<h3>Prioritise security and compliance</h3>
As explained, the costs of a data breach or cyber attack can far outweigh any initial cost savings from choosing a provider who does not prioritise security and compliance. To avoid this risk, carefully review the security strategy, compliance policies and accreditations of your provider.
<h3>Ensure sufficient resources</h3>
One option for avoiding low resource availability or the noisy neighbour effect is a single-tenant solution. This could be a private cloud platform or dedicated server depending on your requirements. With both of these solutions, your hardware itself is dedicated solely to your organisation, so there will be no resource demands from other users. If you opt for a multi-tenant solution, you should ensure that you will be allocated sufficient dedicated resources for your needs, and that other tenant’s usage will not affect your own. Rather than a public cloud solution with shared resources, you could consider an option such as our <a href="https://www.hyve.com/cloud-hosting/vmware-managed-cloud/">Enterprise Cloud</a>, where the hardware is multi-tenant, but your virtual resources are never shared. 
<h3>Management</h3>
Working with a managed cloud provider is an efficient way to avoid tech debt. A managed service provider (MSP) can support you to identify and resolve existing tech debt, streamline your resources and modernise practices, and forward plan to avoid future unexpected costs. With external management, there is no need to handle these aspects of your infrastructure in-house, giving you access to expertise, without having to navigate the IT and tech skills gap to hire your own specialist staff. Find out more details in our insight ‘<a href="https://www.hyve.com/insights/reducing-tech-debt-with-a-managed-cloud-solution/">Reducing tech debt with a managed cloud solution</a>’. 
<h2>Your next steps</h2>
It is clear that, while they may initially appear cost-effective, many seemingly cheap cloud solutions will cause you to incur tech debt, costing you more in the long run. Therefore, choosing the right cloud hosting solution from the start, or migrating to a more efficient solution once you identify issues with tech debt, is critical. 
Our cloud experts will work with you to assess your specific needs, current concerns, and plans for the future. Based on this knowledge, they will design a bespoke solution for you, utilising our <a href="https://www.hyve.com/cloud-hosting/vmware-managed-cloud/">Enterprise Cloud</a>, <a href="https://www.hyve.com/cloud-hosting/managed-vmware-private-cloud-hosting/">Private Cloud</a>, or <a href="https://www.hyve.com/dedicated-servers/">Dedicated Server</a> platforms as required. With our highly-secure, scalable infrastructure forming the foundation of your cloud hosting solution, you will be supported in the present and into the future.
Fill out our <a href="https://www.hyve.com/contact-us/">contact form</a> today and a member of our experienced team will get in touch.

Cloud hosting solutions bring a wide range of benefits. However, if you opt for the seemingly cheapest platform, you are likely to inadvertently take on ‘tech debt’.

Cloud Hosting and Tech Debt: Why Cheap Solutions Can Cost You More in the Long Run

Cloud Hosting and Tech Debt: Why Cheap Solutions Can Cost You More in the Long Run | Hyve Managed Hosting

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Jake Madders, Co-Founder of Hyve and CISPE board member

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Brighton, UK &#8211; February 17, 2025 
<a href="https://www.hyve.com/">Hyve Managed Hosting</a>, a global provider of managed hosting solutions, is proud to announce that its Director and Co-Founder, Jake Madders, has been elected as a new board member of the Cloud Infrastructure Services Providers in Europe (CISPE) for a three-year term. As the only UK business representative on the board, Madders will play a key role in supporting the region’s cloud businesses through CISPE key initiatives to promote transparency, fair competition, and innovation in European cloud markets.
CISPE advocates for policies and regulations that ensure a fair, competitive, and secure cloud ecosystem in Europe. The organisation’s members range from global industry leaders to specialised smaller and medium-sized enterprises, all working towards a sustainable, competitive, and resilient European cloud market.
As an elected CISPE board member, Jake Madders will use his technical and leadership expertise at Hyve Managed Hosting to support CISPE&#8217;s initiatives. Over the next three years, Jake’s focus areas will include supporting regional regulatory frameworks that ensure fair competition, strengthening data sovereignty, and promoting sustainable cloud practices. Jake’s appointment also comes at a time when CISPE is strengthening its European profile with a fully European board while welcoming large non-European vendors as non-voting Adherent members.
“Hyve was the first UK-based business to join CISPE because we saw a real opportunity here to represent the interests of Europe-born cloud infrastructure providers”, &#8211; comments Jake Madders, Director and Co-Founder of Hyve Managed Hosting. “With the domination and lack of control of hyperscalers, I am excited to help pave the way for true market competitivity to ensure positive growth in market share for SMEs. It is an honour to join the CISPE’s board and look forward to working with industry leaders to ensure a level playing field for cloud providers of any size.”
Hyve Managed Hosting first joined CISPE in early 2023 to help the organisation lobby for fair licensing, data protection and transparent public procurement of cloud services. Since then, the company has actively contributed to CISPE&#8217;s initiatives, helping to shape industry standards and regulatory frameworks that aim to drive the success of Europe&#8217;s digital economy.
Francisco Mingorance, Secretary General of CISPE, commented: “We greatly appreciate the contributions of our outgoing board members and are excited to welcome new voices to the table. CISPE remains committed to bringing together industry leaders to address the most pressing challenges in cloud infrastructure. We look forward to working with Jake Madders and other new board members to drive forward key initiatives that benefit the cloud market.”

Representing the UK on the CISPE board, Madders will continue advocating for fair regulations in the cloud market

Jake Madders elected as a new CISPE Board Member for a Three-Year Mandate

Jake Madders Elected As a New CISPE Board Member | Hyve Managed Hosting

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<a href="https://www.techradar.com/pro/the-tipping-point-for-ai-and-managed-cloud">Originally published by Techradarpro</a>
In 2024, the average business was spending 30% more on the cloud than the previous year, and much of this surge can be attributed to the rise of generative AI tools. From advanced chatbots to sophisticated machine learning models, the ‘AI rush’ is reshaping industries – and with it, the infrastructure needed to support these breakthroughs.
However, this explosion of demand comes with significant challenges. Hosting AI-centric workloads requires substantial capital expenditure (CapEx) for specialised, high-performance hardware such as GPUs, TPUs, custom AI chips, and energy-intensive cooling systems to prevent overheating. Adding to this complexity is the unpredictable nature of AI workloads, which fluctuate heavily during testing and implementation phases.
Together, these factors make achieving the economies of scale seen in traditional cloud services a significant hurdle. Yet, the tipping point is in sight: advances in technology and shifts in the AI ecosystem are transforming these challenges into opportunities, paving the way for managed cloud providers to redefine how AI workloads are hosted.
<h2>1. Advances in hardware and efficiency</h2>
Specialised AI hardware is evolving rapidly, reducing energy consumption and improving cost-effectiveness. For example, NVIDIA&#8217;s H100 Tensor Core GPUs deliver up to nine times the AI training performance of their predecessors, making them a game-changer for AI workloads. Similarly, modular AI chips, such as those developed by Cerebras Systems, allow for more efficient scaling of AI models, optimising both performance and energy use.
These innovations make hosting AI applications more efficient, reducing costs while maintaining the high-performance business&#8217;s demand. As hardware continues to improve, the barrier to hosting AI workloads at scale is gradually being lowered.
<h2>2. Emerging AI-as-a-Service models</h2>
One of the most significant shifts in the AI ecosystem is the rise of AI-as-a-Service (AIaaS). By offering AI solutions on a subscription basis, managed cloud providers eliminate the need for businesses to invest heavily in upfront infrastructure. AIaaS lets companies deploy AI technologies quickly and scale implementations efficiently, fostering broader adoption even among businesses without extensive IT budgets.
<h2>3. Increased AI accessibility for SMEs</h2>
Small and medium-sized enterprises (SMEs) have historically faced challenges adopting advanced AI due to prohibitive costs and limited in-house expertise. The rise of AIaaS models will change the game, letting SMEs harness AI without breaking the bank.
With managed service providers handling the heavy lifting – everything from infrastructure management to AI deployment – SMEs can focus on applying AI to their specific business challenges. Whether automating routine tasks, improving customer experience, or optimising supply chains, these smaller players will now have the opportunity to compete with larger enterprises in the AI arena.
<h2>4. Economies of scale driving cost reduction</h2>
As AI becomes more widely adopted across businesses and industries, cloud providers will reach the critical mass needed to achieve economies of scale, reducing the per-unit cost of AI hosting. This progress is lowering entry barriers for businesses, enabling providers to enhance their offerings while making AI hosting more affordable.
For example, the shared infrastructure model of managed cloud services allows multiple businesses to benefit from advanced hardware without shouldering the entire cost. This is particularly important for AI, where high-performance hardware often sits idle between workloads.
<h2 id="managed-service-providers-balancing-the-scales-3">Managed service providers balancing the scales</h2>
In the UK alone, 65% of businesses rely on managed service providers (MSPs) to address the IT skills gap, particularly in security and infrastructure management areas. For AI, this reliance is even greater. The complexity of deploying AI workloads and the shortage of skilled professionals to manage advanced infrastructure drive businesses to partner with MSPs.
By offloading infrastructure challenges to experts, businesses can focus on using AI for growth and innovation rather than the logistics of managing the intricacies of scaling deployments. This growing reliance on MSPs highlights their critical role in bridging the expertise gap and ensuring businesses stay ahead in the AI race.
<h2 id="how-the-tipping-point-will-reshape-industries-3">How the tipping point will reshape industries</h2>
As demand for AI hosting reaches critical mass, managed cloud providers will unlock new opportunities to reduce costs, enhance service offerings, and make advanced AI capabilities more accessible. This shift will profoundly impact industries across the board.
For businesses, AI-powered solutions will streamline operations, automate tasks, and significantly reduce costs.
For example:
<ul>
<li>Retailers can use AI to optimise inventory and personalise customer experiences. •</li>
<li>Healthcare providers can use AI for faster diagnostics and improved patient care.</li>
<li>Manufacturers can adopt AI for predictive maintenance and improved production.</li>
</ul>
For managed cloud providers, integrating AI into their services will create new revenue streams and help them differentiate themselves in an increasingly competitive market. The rise of AIaaS, combined with advances in hardware and the benefits of economies of scale, will position MSPs as key enablers of the AI-driven economy.
Ultimately, the marriage of AI and managed cloud will not just overcome existing hurdles – it will redefine them. By turning today’s challenges into tomorrow’s opportunities, managed cloud providers are poised to lead the next wave of digital transformation, delivering the infrastructure needed to support the AI revolution.

Hear from Jake Madders, Co-Founder of Hyve Managed Hosting, on the growing demand for cloud services driven by the rise of generative AI.

The Tipping Point for AI and Managed Cloud

The Tipping Point for AI and Managed Cloud | Hyve Managed Hosting

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