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The Hidden Costs of Public Cloud

Over the past number of years, “the cloud” has entered the dictionary to the excitement of many and the bewilderment of many more. In the early days, products offered by big players (AWS, Google) ensured that the public cloud was the cloud of choice.

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However, in recent years, private clouds have gained popularity. Much of the reason for this can be traced to data security and traceability concerns, but it is often also due to better cost control and cost visibility.

A “cloud” is just a collection of servers. In the “public cloud”, these servers are housed in large data centres, owned and operated by some of the world’s largest organisations. You neither control nor have access to these servers. In a “private cloud”, you either own the servers, or you use a private cloud provider. However, a key difference is that you know where your data is stored, and you have access to the servers.

Deciding which solution is right for your organisation is key. Not getting this right can be a costly error – this can be in terms of customer impact and employee time/effort as well as hard cash.

The public cloud has the reputation of being the cost-effective alternative to private cloud, however, if not managed correctly, it can actually be a very expensive alternative.

In fact, numerous surveys [1] and reports [2] have found that cost overruns are one of the key concerns for companies when moving to the public cloud.

These are just some of the potentially expensive pitfalls you need to watch out for.

Low Headline Costs

Often the costs highlighted in the flashy banner are not the costs you end up paying. Much like some low fares airlines, the headline price of flying to Spain for a week is very attractive, but once you’ve added in the costs of luggage, picking your seat, priority boarding, car hire, accommodation and taxes, you end up with a much bigger bill than you had initially anticipated.

Public cloud providers can be similar. The banner cost is one thing, but you also need to factor in costs for ancillary requirements, such as IP addresses, cost of data transfers, failover options, back-ups, etc. These costs, along with others, need to be taken into account so that you are comparing like with like when considering a move to public cloud.

Incorrect Resource Provisioning

It is not always easy for an organisation to correctly estimate how many resources it will require. Many companies just simply do not have the expertise to do this. Obviously, if you under-provision resources, you will at some stage need extra resources. In cases like this, it is easy to see how costs might spiral. Many companies err on the side of over-provisioning resources, however, you still have to pay for an underutilised cloud. Therefore, companies often end up paying a lot more than they have to for resources which are not being used.

Transactional Costs

Many public cloud providers charge what appears to be a nominal fee for accessing your data. This can be very cost-effective when your data is minimal. However, as your data levels rise, so do the costs. And as the initial cost is so low, it is often a cost that gets overlooked until it is too late.

Migration & Egress Costs

Whether you are migrating from an on-premises environment or from one public cloud to another, moving to a new platform requires a significant amount of planning and preparation. If you do not have the expertise in-house to do this, you will need to hire it in, and, even if you do, it still demands that your IT team invest a considerable amount of time and effort.

In particular, moving from one public cloud to another can be an expensive headache, effectively locking you into your cloud provider. For example, one of the costs that is rarely considered are the cost of extracting your data from your current public cloud before moving as most public cloud providers bill for this service.

Upskilling/Talent Costs

To maximise efficiency, and therefore value, from the public cloud, you need to be able to effectively manage it. Mismanagement or lack of proper oversight account for many of the reasons business end up paying more than planned. Therefore, managing your public cloud environment is essential and doing so requires people who know what they are doing. In most cases, this translates to either upskilling employees or hiring new talent.

Conclusion

Public cloud has been touted for many years as the cost-efficient solution. However, time and time again, studies and surveys have shown that the truth is not as straightforward – especially if your needs are not “off the shelf”.

Yes, it is absolutely possible to make cost savings by moving to the public cloud. However, there are many hidden costs which need to be bottomed out first before deciding if it is the right move for your business. Not taking the time to do this could be a very costly mistake.

About Paul

Paul Delahunty is an experienced Information Security professional who started his career as an engineer with Ericsson, before venturing into the start-up world as Operations Director with moQom (moQom provided Identity solutions). With the experience gained in moQom, Paul co-founded ThorsNet, a Cyber Security and Compliance company. More recently, he re-entered the corporate world as Information Security and Audit Manager for Hostelworld plc. 

Paul is currently the Information Security Officer with Stryve.


[1] NetEnrich 2019 Cloud Adoption survey

[2] Can Private Cloud be Cheaper Than Public Cloud?

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