The cloud is undeniably a useful approach to technology, for reasons ranging from its accessibility to its scalability to its purported cost efficacy. Why purported? Well, there are hidden costs that can very well impact whether or not the cloud is your best option.
Let’s explore the different expenses that the cloud incurs so that you may be better prepared to decide if it is best for your needs.
How Does a Cloud Provider Set Fees?
There are three primary costs that a cloud provider needs to balance as they set their prices:
- Computing Costs – How much has the provider invested in the hardware needed to maintain their cloud, as well as the operating system running on that hardware? Based on the client company’s usage, the cloud provider will need to have the appropriate hardware.
- Networking Costs – In addition to the investment into the hardware that builds up its network, a cloud provider also needs to maintain it over time. This will incur costs over time.
- Storage Costs – Finally, the cloud provider also needs to cover their own operational costs, in terms of the storage media needed to support their clients’ needs, while also expanding their existing storage to meet their clients’ demands.
This may very well seem like a lot, although it is important to consider them in relation to the costs that an on-premises infrastructure would incur. Not only are there the capital costs of procuring the necessary equipment and licenses, there are also the operational costs associated with powering and supporting the hardware while also training your IT staff to manage it. On top of these, any downtime—incidental or intended—will accumulate indirect costs for your business.
A good rule of thumb for a business putting on-premise computing in place is to multiply the cost of the actual upgrade by three, as every dollar spent will also come with an additional two dollars of management and maintenance.
Suddenly, the monthly fees established by the cloud provider might not seem so bad.
However, This is Not to Say There Aren’t Hidden Expenses with Some Cloud Providers
While the cloud is a great option for many reasons, it is important to acknowledge some of the trade-offs that using it can have.
For instance, not all of the cloud’s costs are necessarily financial. Migrating data, whether from your infrastructure or even between cloud providers, is a time-consuming process—meaning that there’s the potential for you to need your data when it is being transferred and is therefore unavailable to you.
Migrating to the Cloud is Easier with Help from the Experts
We can be those experts for you. Part of helping you manage your business’ IT is handling the various providers and services you rely on, and that’s a task we’re happy to take on. Whether you’re actively planning a migration or are still in the consideration phase, we can help you estimate what your business’ costs will be.
Find out more about utilizing the cloud, as well as our managed services, by giving us a call at (831) 758-3636.