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Originally Published by Data Centre Dynamics

Exploring the costs – and complications – of the cloud

Cloud computing bills are reaching unprecedented heights. As data centers look to offset the recent rise in energy cost, inflation, and shortages of critical resources such as semiconductors, cloud computing bills risk spiralling out of control – especially for businesses trying to scale.

As well as these economic challenges affecting data center costs, companies are suffering from the hidden costs of public cloud solutions, particularly those offered by hyperscalers, as they attempt to manage and scale their cloud solutions.

Last year, 82 percent of the surveyed companies put costs as their greatest cloud-related obstacles.

Even in the face of these challenges, there are many ways businesses can manage rising cloud costs.

The costs and complications of the cloud

To be clear, the cloud is an effective solution for the majority of businesses operating online. However, sometimes it’s become far more expensive than companies initially costed for.

With many organizations lacking the internal expertise to manage their cloud solutions effectively, on top of the challenges associated with rising data center and public cloud costs, it’s becoming difficult to forecast and budget accurately. As a result, businesses are struggling to keep up with the ever-changing cloud landscape.

"Originally perceived as the simplest, ‘go-to’ cloud option, many are now repatriating data back from the public cloud because of multiple hidden costs they’re incurring on top of the base rate" - Jake Madders, Hyve Managed Hosting

For example, many companies have historically relied upon public cloud solutions provided by hyperscalers such as Microsoft Azure, AWS, and Google Cloud Platform.

Originally perceived as the simplest, ‘go-to’ cloud option, many are now repatriating data back from the public cloud because of multiple hidden costs they’re incurring on top of the base rate.

Take resource provisioning, for example. Companies often leave their servers spinning without any jobs on because they were led to believe they bought into a maintenance-free, self-configuring solution. This is not the case. The bill comes, and companies are charged for leaving the lights on in empty rooms.

Another example of the types of common issue that many companies face when working with public cloud suppliers, is the nominal fee charged for unknown variables, such as data operations or “IOPS”, bandwidth, etc.

Although these fees may appear insignificant at first, the unpredictable number of transactions each month can result in an accumulation of such charges, ultimately impacting the monthly cost. And these are only a couple of the several hidden costs of the public cloud that come on top of rising data center costs.

But what if companies start managing their cloud resources themselves? While it may sound like a good option, managing and monitoring any cloud solution can be complex without a qualified IT department. Not to mention, the cost of hiring or maintaining said talent can easily outweigh the savings. It also adds a level of complexity and cost to a solution chosen to simplify processes, reduce expenses, and enhance efficiency.

Strategies to cut cloud costs

While it is unlikely that cloud costs will return to the same levels as they were before the pandemic (which contributed to cost increase due to the high demand for cloud services), there are still plenty of ways to reduce costs and improve operational efficiency. Here are a few options companies can try, regardless of their current setup:

"To reduce cloud costs, businesses should consider equipping their IT team with professionals who have experience working with cloud infrastructures and can assist in selecting the appropriate services, optimizing usage, and mitigating risks." - Jake Madders, Hyve Managed Hosting

Skilled and knowledgeable cloud experts

To reduce cloud costs, businesses should consider equipping their IT team with professionals who have experience working with cloud infrastructures and can assist in selecting the appropriate services, optimizing usage, and mitigating risks.

However, the shortage of skilled IT/cloud workers may make it challenging to find suitable candidates as part of the hiring process. The alternative is to seek outside experts who can manage cloud infrastructure for you and provide round-the-clock customer service when and as you need it.

Seek predictable billing

Whether that means renegotiating your current contract or seeking a new one, fixed billing is one of the best ways of protecting your company against hidden costs and outside factors such as rising energy costs. It also improves budget control and stability.

Rethink resource management

Specifically, seek ways to ensure that you’re not over-provisioning, sizing your resources incorrectly, or paying for unused capacity. Having a cloud solution that is tailored to a company’s specific requirements can help ensure that resource use is optimised, increasing cost-efficiency to combat the issue of rising IT costs.

In the end

Cloud remains an invaluable business tool, but rising data center costs and hidden complexities of the public cloud services mean that businesses can no longer afford to be passive consumers of solutions that the cloud market offers.

To maximize the benefits of cloud solutions, companies today need to prioritize collaboration with cloud professionals, which can be done internally or by outsourcing this business segment to a team of cloud experts who can navigate them through the complexities and particularities of the cloud market.

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