The Often Overlooked Cost(s) of Cloud Computing

There is no denying that cloud computing is the way of the future and that having access to the cloud can help businesses immensely; however, have you ever sat down and thought about the true cost(s) associated with doing business in the cloud? Therefore, as more businesses join the ‘cloud revolution,’ looking at the TOC or total cost of ownership has become an important factor.

What will my total cost be for the next 3 to 5 years?

What’s more, will I see any return on this investment? That depends, and chances are it cannot be accurately calculated at this time. This is because we often either underestimate or incorrectly implement our data integration. Often it is not a business’ fault that their data is incorrect because calculating data integration cost models can be quite complex; furthermore, they’re constantly changing.

In addition to the complexity and fluid nature of data integration there are other factors that make it difficult to get an exact cost.

  • Chances are your business or enterprise is using multiple public clouds (a.k.a. “multicloud situation”). What’s more, there is also a chance that you have workloads located on each cloud, which could randomly change.

    • In order to calculate TCO properly, you must plan it properly. This planning means that you need to work with certain workload profiles. Moreover, you need to be able to make assumptions about where these workloads will run.

  • Be aware that prices are always changing—usually in a downward fashion with technology. Because prices change, your figure(s) can be off by as much as six months.

  • While talent expenses are not usually factored in, they can be important to your numbers. To have a successful grasp at cloud computing, organizations usually need to hire multiple people in order to be successful. This includes hiring developers, administrators and architects just to start with, and all of these hires will affect your TCO.

  • Adding security and governance after implementing your business’ cloud can add another 20 to 30 percent to your TCO.

Once all of the costs associated with cloud computing come to light, many enterprises experience a form of sticker shock because of the factors that may not be originally considered. Typically, many businesses are very far from the cost they originally bargained for.

What does this mean for businesses?

First of all, if a business decides that they want to make use of cloud computing, they should make sure to incorporate all of the costs into their calculations from the beginning. This can be done the same way you incorporate other expenses like their utilities—this includes factoring in variable and fixed portions. Companies without much experience with the cloud don’t consider all the costs and how they can seriously blow their budget.

This situation can only be fixed by learning what can (and will) change. By learning to understand the way the cloud will change, you’ll come to learn how it will impact the business world—both the benefits and the costs. Another important step you’ll have to take is to monitor the patterns of consumption and learn to use these to better adjust your business model.

While employing cloud computing may not be the best decision for every business, incorporating it into your business could prove to be profitable—it just depends on what you have to spend and how you plan to use it. To learn more about how cloud computing can save your business money in the long run, check out our recent article…

For more about cloud computing, continue reading on our blog and in our knowledge center or contact cloud computing consultants at Innovative Architects to discuss your individual enterprise needs today.