Clearing Up Cloud Cost Confusion

Does cloud computing really save companies money? It will if you avoid hidden cloud costs and make smart decisions about which apps you'll use in the cloud.

Table of Content

    There always seems to be some confusion about whether cloud computing really saves companies money.  This is due, in large part, to the fact that no two companies, or two deployments, are the same – so it’s hard to draw a clear comparison or establish any patterns.

    Why are cloud deployments so variable?  Well, because it includes factors like management, optimization, and additional plug-ins in addition to the complication of trying to compare cloud investments with traditional IT investments.  So, you can see, it quickly gets complicated and confusing.

    According to James Staten, a researcher for Forrester, one way to help you save costs with a SaaS or cloud solution is to avoid some of these hidden costs:

    1. Customization — The more you can use the SaaS solution “out-of-the-box,” as it was designed, the lower your costs will be.
    2. Integration — Integrating your SaaS solutions with in-house applications, data stores and other SaaS services is inevitable and shouldn’t be avoided. A suggested best practice is to define a clear integration architecture via as few means as possible.
    3. Sprawl — A SaaS app that is a great investment for 15 employees may not be a great investment when you roll it out to 1,500 employees, so be aware of how your user counts are affecting your cost savings.
    4. Forgetting to turn things off — It’s easy to see how pay per use makes your start-up costs low and scaling as traffic rises easy. But it goes both ways – don’t forget to turn off resources you no longer needed.
    5. Storage grows, it never shrinks — Actively manage storage consumption by moving data to lower cost services when they are no longer in constant use, leveraging caching as much as possible and deleting files or copies of files if you don’t need them.
    6. Not making the most of cloud economics — Not every application is a good fit for a pay-per-use platform. Make sure that you are only considering cloud solutions that enable you to scale to exactly what you will use (elastic scale) or can be turned off without charge when not in use (transiency).

    Our Cloud ERP and Cloud CRM solutions are designed to help you avoid these pitfalls and experience real, quantifiable cost savings.  To learn more about how a cloud business management solution could save you money, request a Cloud Impact Assessment!

    Source:  Forrester, February 18, 2013