For many data-heavy workloads, the hidden costs of cloud computing can quickly spiral out of control. A hybrid cloud can help your business stay agile while avoiding these surprise fees.
It’s easy for public cloud dependency to become a ubiquitous part of your everyday life. But as your company grows, so too does your cloud service bill — making the public cloud less and less cost-effective over time.
The Impact of Public Cloud’s Hidden Costs
In the era of analytics, your data holds incredible business value — but only if you can store, organize and instantly access it in a cost-effective way. Traditional on-premises storage offers privacy and control over your data but can be painfully expensive and complex to operate at multi-petabyte scale. In response, many organizations have turned to the public cloud, which is easy to use and can accommodate massive data sets.
But all too often they are caught by surprise when it comes to the actual price of cloud computing in the age of big data. As far back as 2018, IDC reported that 80 percent of enterprises that had migrated to public cloud began a secondary migration back on-premises within two years after they realized that the cloud was not all it was cooked up to be.
This problem has only worsened since then as usage of the Internet of Things, 5G wireless technology and edge computing has exploded — as has the amount of data being generated.
Here are several hidden costs of public cloud computing:
Hidden Cost #1: Data Transfer Costs
It wouldn’t take a rocket scientist to correctly calculate data transfer costs when setting up a cloud server deal, but a team of them managed to do just that in 2019.
When NASA started to plan for its future data storage needs, the logical conclusion was to expand its cloud contract. The agency calculated it would need 215 additional petabytes of storage by 2025, a figure they used to estimate expected fees. All told, the impressively smart scientists calculated they’d pay their cloud provider around $65 million per year.
As it turns out, even impressively smart scientists can miss things sometimes.
It couldn’t have been a great day around the office when NASA’s Inspector General revealed the results of a routine audit. The initial $65 million estimate was way, way off — by $30 million per year.
What the NASA team failed to take into account were data egress charges. In other words, if scientists want to actually use the data NASA is collecting, the agency will have to pay every time they download it from the public cloud.
Getting your data out of the public cloud is not free on any of the major platforms.
How could a group of some of the smartest people in the world miss $30 million worth of data transfer charges? It’s not that cloud providers hide these charges, but the methodology is complex and a bit vague.They can't predict how your app will be used, and they won't tell you when you are grossly exceeding estimates (if you have even tried to calculate them).
Even if you have careful predictions, you would need to have instrumented controls within your internal systems to enforce them — which, of course, adds up to more costs in labor and resources.
Whichever way you slice it, data egress and transfer charges make for some unwelcome cloud computing surprise fees.
Hidden Cost #2: Cloud Utilization Costs
Public cloud providers charge a fee every time a company attempts to access its data. While the fees are tiny — sometimes fractions of pennies per hour — cloud providers are banking on high volume.
That volume comes in the form of the millions of tasks companies perform every day to read, write, modify, analyze and transmit data every second of every day. Those costs add up, and they grow alongside a company as it scales. A public cloud solution that was affordable in the early days may not make sense, transactionally, in the longer term.
As an example, Adobe developers unintentionally racked up $80,000 a day in charges for a computing job that ran on Microsoft Azure and wasn’t discovered for more than a week.
This highlights an important aspect of enterprise cloud management: Cloud resources must be monitored very carefully and consistently. It is not a set-it-and-forget-it type of process. If an organization leaves a VM running without dedicated oversight, it will only be caught after the surprise fees show up on the bill.
To avoid this hidden cost of cloud computing, organizations need to adopt a change in how their cloud resources are utilized and make a dedicated commitment with an extremely knowledgeable team to closely monitor, provision and maintain their environments.
Hidden Cost #3: Migration Costs
While moving to the cloud can lead to many positive gains for a growing company, the cost of the initial transition is not one of them.
In a Journal of Cloud Computing survey conducted with 250 IT managers, it was reported that “more than 70 percent of companies that moved to the cloud were not aware of these costs following adoption. Lack of vendor transparency, continuous maintenance costs, and lack of cloud expertise play a role in unpredicted costs and implementation problems.”
IT teams need to not only train up existing staff, but migration may require hiring new experts in cloud management and related tech. And IT must continue to operate its existing infrastructure, too.
For many, this has resulted in an indefinite number of years that a dual infrastructure is required.
A 2021 article from Tom Nolle, president of CIMI Corp, supports the notion that public cloud’s hidden costs can eat up much of its promised savings. According to surveyed cloud users, only 20% of the applications they moved to the public cloud “clearly met the business case,” while another 40% were only “marginally” justified.
The economics of each type of cloud project is unique, and while most assessments of cloud costs versus data center costs fail because they’re not leveling the playing field in terms of assumptions, many cloud projects are poorly executed to begin with.
And a poorly executed project creates bad results.
IT teams managing existing applications will not be able to quickly shift to running them in an entirely new environment overnight. An investment in your workforce, third-party services, training, and additional hardware and/or software may become a necessity depending on the type of move you are making.
Often, the fundamental work style and enterprise mindset will need to shift too. Just about every process, from project management to customer service, may need to change.
Hidden Cost #4: Business Process Reengineering Costs
Sometimes organizations expect a public cloud migration to improve efficiency and functionality across the board. The truth is that any issues that existed before will continue in the cloud. While the initial transition may be complete, the ongoing business changes needed will continue to surface and drive more spending.
For example, in the case of a complete lift and shift of an application to the cloud, Mark Thiele, technical standards chairman for the International Data Center Authority, says, “Lifting and shifting an application to cloud exposes all the gaps in understanding, links, security, and performance issues in ways that are difficult to understand prior to the move.”
Large-scale, established enterprises may have little trouble adjusting, but for companies with immature processes, the move could expose significant hidden costs.
Going back to the Journal of Cloud Computing survey, respondents reported that they:
“had to change some processes to move to the cloud and they still wish to change some more, but it is not a one-day task. [...] This step of business process reengineering is largely, naïvely-underestimated despite being complicated and vital for a cloud project’s success. The complication around and the importance of process reengineering arise from a number of reasons. One is that responsibility and process ownership is often vague.”
Kyle Bober, a senior technical architect, wrote about his experience working on a cloud migration project for a client and cited these 10 post-migration costs that need to be considered:
- monthly/yearly infrastructure and software (licensing/support) costs;
- system maintenance and operation costs;
- administration;
- operations;
- monitoring;
- alerting;
- maintenance;
- system updates;
- software version updates and patches; and
- training.
Avoid Hidden Costs with Hybrid Cloud
For organizations frustrated with the hidden costs of public cloud, but still seeking modern agility and scalability, a hybrid cloud offers the best of both worlds.
There are four clear-cut benefits of hybrid cloud:
- predictable, low costs;
- a secure, controlled environment of your choice;
- activating your data and optimizing compute workload placement; and
- avoiding lock-in.
And the best part is, you don’t have to go it alone. In the public cloud, the provider takes care of managing all the infrastructure and services, which would be a heavy lift for any organization.
Platina Systems can help you offload those operational tasks, so you can focus on maximizing the value of your stored data in a simplified, rapid and repeatable deployment — in the cost-controlled environment of your choice.
Want to see how we can help you reap all the benefits of hybrid cloud without all the work of managing on-prem infrastructure? Request a demo.
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