AVOID STICKER SHOCK - How to Determine the True Costs of Clouds

Think moving to the cloud will save you money?
Maybe it’s time to think again.

Unfortunately, the early excitement that accompanies
cloud strategies often turns into disappointment for many
enterprises, and sticker shock is a big reason why. Despite
performing the due diligence of estimating upfront
costs based on published pricing from service providers,
many companies are hit by unexpected and unnecessary
expenses once they make a cloud move.


“Three or four years ago, our research showed that the
number one driver for going to public cloud was the
perception that it would help rein in costs,” says Brian
Garrett, vice president of validation services for the IT
consulting firm Enterprise Strategy Group. “Cost reduction
is dropping as a driver now that people are getting more
experience with the true costs of public cloud.”
In fact, a study by IDG found that 38% of enterprises have
moved workloads from the public cloud back to their onpremise
data centers—with costs being among the biggest
concerns. Part of the challenge is understanding all the
variables that affect cloud pricing, which make it difficult to
perform apples-to-apples comparisons to find the right deals.

Cloud veterans also warn that to closely manage cloud
costs, enterprises need significant upfront preparation not
only for accurate cost comparisons but to determine which
workloads will deliver price and performance benefits in
the cloud versus keeping them on premise. All this should
be done within a larger data center optimization and
consolidation effort that’s informed by having clear visibility
into the entire enterprise infrastructure.

“As part of an ongoing IT simplification, modernization
and rationalization program, enterprises must determine
the best way to run each application,” says Paul Lewis,
chief technology officer at Hitachi Vantara, a technology
and professional services company. “That could mean
either running it in the existing environment or recreating it
in a different environment, whether that’s a private cloud, a
SaaS application, within a new architecture deployed in the
public cloud, or managed by a third party.”

It’s clear that enterprises need a framework for sorting
through the complexities of cloud pricing models, which
make it difficult to perform accurate comparisons of initial
costs and to forecast spending over time. Fortunately, best
practices and new tools for analyzing and monitoring IT
cloud costs over time are helping IT and financial planners
evaluate cloud and on-premise options to find the right
balance of cost and performance.

 Data Center

Share content on email

Share