The real cost behind the cloud

Some IT executives who have implemented cloud services or are considering implementing cloud services are reminding that migrating to cloud computing means increasing costs, some of which may be unexpected. While these costs do not necessarily reduce the real business value that companies derive from cloud computing, they can have an impact on the overall cost-benefit analysis of cloud services.

Migrating and storing data

Migrating large amounts of data to public clouds and storing them over the long term costs tens of thousands of of dollars a year, and many companies may not yet be aware of them.

Whitepage, based in Seattle, which provides online contact information for more than 200 million people and 15 million companies, Hernan Alvarez, a senior IT and operations executive, believes a one-time data migration costs thousands of dollars. He said that the cost of network bandwidth accounted for the bulk of the data migration costs, while cloud service providers may also charge upload and download fees, in addition, even if the data and systems in off-site hosting also have internal human costs. Hernan Alvarez said: "There is a general feeling that there is no human cost in cloud services, but in fact, managing a large number of cloud instances is complex, as is managing a large number of servers, when you are working on the workload by scaling up (scale-up)." ”

Another big cost in cloud services is the expense of data in the long-term storage of the cloud. "If we take into account the data growth over the next 3 years, we will find that the cost of the data lifecycle is high," he said. The data is stored in the cloud, and we still have to pay the corresponding fee each month. ”

If we do not fully understand the cloud model, then there is no way to think of these costs. With a full consideration of processor, capacity, and storage requirements, and a graph representation, it is clear what the costs are and whether it is more cost-effective for the IT department to do it itself.

Whitepages companies have considered using cloud services to back up data, but when they carefully evaluated 8 providers, they thought the cost would be three or four times times higher than the cost of storing the data internally. As a result, they chose to use an internal private cloud to meet the needs of long-term storage data.

However, in general, the use of public cloud computing to meet the needs outside of storage can make it unnecessary for organizations to deploy and maintain applications internally. For the past two years, Whitepages has been using a public cloud service that currently uses 11 cloud-based applications from Salesforce.com, SuccessFactors, ADP, WebEx, Yammer, and other providers. Hernan Alvarez says the cost of their savings is far greater than any unexpected cost.

Integrating applications from multiple vendors

"Cloud computing has hidden costs in terms of integration. If you don't realize that at first, the economic benefits of cloud computing may be less satisfying. ”

The Pacific Coast Building Products company, based in Rancho Cordova, Calif., is planning to start using cloud computing on a large scale, and for that reason they have evaluated the services of several providers. The company's CIO, Mike O ' Dell, says the company that provides products and services to the construction industry has so far limited the scope of its applications because it is not entirely economically meaningful.

There are two reasons why it is difficult to integrate software from different developers in the cloud, and the other is to increase costs if Pacific coast companies try to integrate themselves. For example, the company uses Microsoft's Exchange e-mail system and Cisco's Unity Unified HTC Voicemail system and intends to use the two apps as a cloud service. Mike O ' Dell said: ' At least the last time we analyzed it, we couldn't integrate exchange and unity in the cloud. "But without integration, users will not be able to get some of these features, such as automatically deleting voicemail messages on their phones when they receive information via e-mail." Mike O ' Dell says there are also problems with integration, such as larger, more complex applications like ERP.

Mike O ' Dell said: "For example, if we put SAP software in the cloud, it means we have to give up some functionality or invest a lot of money in integration." Cloud computing has hidden costs in terms of integration. If you don't realize that at first, the economic benefits of cloud computing may be less satisfying. ”

(Responsible editor: The good of the Legacy)