Are the costs of cloud implementations overruling the benefits?
Cloud computing has unquestionably had a dynamic effect on business growth and productivity, enabling mobile collaboration and scalable packages that allow for rapid expansion. One of the principal benefits given in favour of this model of computing is its ability to drive down costs, particularly when it comes to removing or reducing the need for upfront investment, and providing a stable, predictable IT subscription.
One might assume, then, that the global take-up of cloud solutions would drive costs down further even as efficiencies grow. Yet often the opposite is true, and many businesses are encountering ‘hidden’ costs they hadn’t anticipated, causing some to question the overall value of cloud migration.
While cloud service providers naturally advertise the potential IT cost-savings to be made, caution is necessary when taking into account various factors.
The first is a question of human resources. In-house IT staff will need ongoing training in order to efficiently manage the cloud architecture, from the first stages of migration to integrating systems and maintaining them. This cost is enhanced the more complex hybrid systems become, as your staff need to collaborate extensively with the service provider’s administrators.
With regard to data retrieval, some cloud service providers offer tiered storage options, with differing levels of accessibility, which allow businesses to compartmentalise their data according to how often they need to retrieve it. This means that if you should unexpectedly need access to critical data promptly, you could end up paying more than you had initially budgeted for storage.
It can also be easy to either over- or under-provision, increasing costs, until you find the solution that works best for you, while pricing models are known to change regularly, in part due to service providers finding that increasing demand or complexity of their offering is raising their own costs.
While by no means comprehensive, this list should throw some light on what is a pressing concern for businesses investing in cloud migration. Part of the issue is that many businesses still view cloud computing solely as a cost, rather than as a benefit. Even though they may be paying more than they anticipated, the importance of reliable service, increased productivity and IT agility that they gain in return cannot be overstated.
Operational costs will still tend to be substantially lower than hosting software in-house, and there are numerous advantages, just one of which is an efficiency gain in the instant release of upgraded software and application of patches.
Cost reduction strategies
The good news is there are various strategies available to lower unexpected or ‘hidden’ costs of cloud computing.
Planning is key. The more time spent before migration into the cloud determining exactly what your company’s requirements and internal resources are, the more successful that migration is likely to be in its early stages. When looking at budget, it’s advisable to factor in the costs of making a few mistakes, such as storage needs, at the beginning. Never rush into a decision when selecting a provider as if you make the wrong choice, it can be time-consuming and costly to move your data elsewhere.
Staggering the migration process is also a good idea; consider moving easier workloads across first to build up knowledge, experience and confidence among your IT team, while equally important is investing in your in-house staff so that they are optimised. It’s worth noting here that you should expect some cost in relation to this to be permanent; while cloud computing in itself is not inherently expensive, the ‘human cost’ of ongoing training, support and maintenance can be.
It is also in the best interests of your service provider to ensure their clients are happy, so if you have issues with costs, you can take them up with your account manager and try to work out a more suitable plan going forwards.
There is a reason why most opinion towards cloud computing remains positive, as it does usually make financial sense for businesses of all sizes. It’s therefore vital to have a good understanding of what you’re paying for and why.
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