Macquarie Technology Group (ASX:MAQ) is still feeling the impact from price increases from a vendor on both the cost and revenue sides of its cloud services segment, according to a Wednesday Jefferies note.

Jefferies noted that the firm had to absorb the impact for certain government customers, while other customers facing the cost increases directly responded by cutting back on their total spending.

In government, cybersecurity is becoming increasingly non-negotiable, with mandatory cyber practices having been rolled out to Commonwealth agencies in 2022, the note added. Jefferies believes that state governments, too, will eventually focus on cybersecurity.

Jefferies maintained its hold rating on Macquarie Technology Group with a price target of AU$64.

The company's shares fell past 1% in recent Thursday trade.