Cloud Computing: Cost Saver or Additional Expense?

April 27, 2016
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If you are an IT professional managing large blocks of data on-premises, you have probably heard from your industry peers that you should be operating in the cloud. The overwhelming majority of these colleagues cite efficiency and cost benefit as the two major reasons of why choosing the cloud is a “no brainer.”  While cloud efficiency is indisputable, there are numerous tech experts who are not sold on the financial benefits of the cloud.

If you are an IT professional managing large blocks of data on-premises, you have probably heard from your industry peers that you should be operating in the cloud. The overwhelming majority of these colleagues cite efficiency and cost benefit as the two major reasons of why choosing the cloud is a “no brainer.”  While cloud efficiency is indisputable, there are numerous tech experts who are not sold on the financial benefits of the cloud. Thus, CIOs and industry big-wigs looking into the cloud are often left confused and are therefore indecisive regarding the direction of their IT strategy. Is the cloud truly a cost saver as many people claim or is it all a façade?

Know What You Need

If you were to look at some of the negative feedback about moving to the cloud, the majority of these responses would mention the unexpected high costs. Though they are likely being honest, it’s important to note that a large portion of these individuals probably didn’t plan accordingly. Understanding your enterprise’s needs can save you tens of thousands of dollars on a cloud plan. Similarly, you could choose a plan that looks like a fantastic value proposition, however it fails to meet expectations. In order to use the cloud effectively and economically, you should draw up a plan of what your requirements are. Be sure to answer all of your questions prior to purchasing a plan. Does your organization require a single or multi-service plan? Determine your network costs. Factor in over and under-provisioning.

Communication and Concentration are Key!

Once organizations are using the cloud, admins frequently lose focus. How so? They need to perform constant system audits. Sadly, many admins forget to do so or simply don’t communicate well with one another (assuming there are multiple admins). Another common flaw is that they simply don’t know how frequently their VMs or appliances will be used. And when your VMs sit idle or you don’t understand how often you will need virtual appliances? Let’s just say that cloud service providers are in the money. Similarly, you need to figure out what type of storage you require (i.e. bare metal storage). If you don’t need your data to be accessible at all times, you can save a significant amount of money.

Understand the Plan before Pulling the Trigger

Here’s the issue: there is no universal approach for organizations looking to “tap into” the cloud. All needs are different from one company to the next. Cloud pricing can heavily fluctuate by service provider depending on how the cloud service you are interested in is delivered. For example, many providers charge security and management fees. Make sure to go through the SLA (Service Level Agreement) for your specific plan prior to making your decision.

Shop Around

Just like consumers, businesses and CIOs should conduct their due diligence. There is nothing wrong with comparison shopping, and in fact, it is strongly advised to shop around. Some providers charge for network traffic while others don’t. As mentioned above, pricing varies dramatically from provider to provider.

Free at First, an Arm and a Leg at Last

Even when you think you have found the right provider for you, it is important to look at the “exit” costs. Cloud providers will pull you in with all sorts of enticing offers but if you make the wrong choice and end up needing to switch providers, extracting your data can be a substantial cost. Make sure to ask what these charges are or if any exist.

“Brick & Mortar” Vs. Cloud

Though the above may make you hesitant about making the switch to the cloud, but it shouldn’t. The one important factor that is clear is that it cloud infrastructure will almost always be cheaper than on premise infrastructure. While the cloud could theoretically cost more than an on premise service if you don’t map out a plan, it won’t be by much. Furthermore, the time you will save will more than make up for the additional cost.

Conclusion – No Question

Like everything in life, you need to prepare accordingly. Assuming you allocate the proper amount of time to research each provider and you understand your organization’s needs, operating in the cloud can save your business a considerable amount of cash. Moreover, in the dynamic world of technology, pricing is constantly dropping due to fierce competition. If you haven’t already made the switch to the cloud, you should consider it as soon as possible simply for the financial gain your business will realize.

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