Hidden costs and locations: Solving the mystery of cloud solutions for businesses

Picture credit: iStockPhoto

The cost and functional benefits of migrating services to the cloud have been well documented, but as more solutions are introduced to the market, choosing the right one is presenting many businesses with a real challenge. The industry is becoming increasingly crowded, so we have simplified the research process and singled out five key things organisations may not know about the cloud to help them make the most informed decision.  

Beware of hidden costs

Many businesses have discovered that there can potentially be a number of hidden costs to cloud computing that may lead to an overall increase in expenditure. When a company signs up for a cloud computing service, the most common contracts are for a set cost per user per month, for a fixed duration. Ideally, any so-called ‘hidden costs’ that might be expected from a service should be included in this rate. The key is that providers still offer a known fixed price for any bespoke or customisation work as this is the main area where many of the cost ‘surprises’ tend to creep in. It’s not about the usage costs – the hidden costs come in with any integration or development which may be required, in fact, any kind of customisation of the solution.

The middle ground

It is not just public versus private. The median option is a hosted hybrid model that offers the best of both public and private cloud networks: vendor-owned infrastructure is deployed on the company’s local network, as all data is kept on the premises. This offers the required security, while the logic and routing is in the public cloud and at a public cloud price model.

Going up and down with the cloud

One of the greatest recognised benefits of the cloud is the flexibility it provides, particularly for those companies with peaks and troughs in demand. Cloud services let companies quickly scale capacity up and down to match their specific business requirements. This is ideal for those customer facing industries, particularly those operating in the financial and retail sectors, which are subject to boom times and quiet times in their normal business cycles. Similarly, companies can match capacity to demands as business units grow and contract over time which would help to align IT spending with actual needs.

The ultimate innovation tool

Companies are now starting to realise the cloud’s potential as an innovation tool and alongside adoption rates, this looks set to rise significantly in the next few years. Going forward, businesses can advance strategies for cloud-oriented innovations and use cloud-enabled business models to promote a sustainable competitive advantage.

In terms of technology, one important step is for companies to create an architecture that can accommodate innovation, and the cloud is becoming the preferred location for these initiatives because of its flexible nature. An ideal architectural model for innovating with the cloud is a strategic enterprise architecture, or SEA. An SEA will provide a blueprint of the business architecture and   technology architecture mapped to it, and will lay out all business processes end to end, incorporating customers and external partners.

The data centre – location matters

Regardless of application, one of the most critical aspects of cloud is where the data actually resides and what happens in the event of a data centre failure or disaster. Customers around the world are subject to many different laws and regulations; legal requirements in one country may be inconsistent with those elsewhere. There are providers who operate their cloud services under common operational guidelines across multiple jurisdictions, with common security and privacy requirements in mind. This should alleviate any concerns a business has surrounding its security, privacy and compliance needs.

Physical security

The data centre should also have tight physical security. The best cloud data centres will have SAS70, type II-certification, so they are under surveillance through intense 24/7 monitoring, as well as being access controlled.

Related Stories

Leave a comment

Alternatively

This will only be used to quickly provide signup information and will not allow us to post to your account or appear on your timeline.

imoyse9061ad3e9cd0405c
27 Oct 2014, 12:26 p.m.

Customers should always ask of a prospective cloud provider basic questions such as ; where will my data be held (primary, secondary and backups), under what jurisdiction will it be held (what country of founding is the cloud business), what data liberation do they document (meaning how do you get your data back should you wish to exit, what format, how easy / often can you get it and can you still get it past contract expiry / any costs to do this ?).

Any vendor not willing to openly share such answers should raise red flags and how easy or not they make it to know this information can give you some clues.

Ian Moyse
Workbooks (CRM of the Year 2014 & 2013)

Reply