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Government Cloud Authors: Pat Romanski, Elizabeth White, Liz McMillan, Dana Gardner, Gopala Krishna Behara

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4 Hidden Costs of Cloud Computing

Cloud computing saves organizations money. At least, that’s what we’ve been told. Experts and vendors alike tout the massive savings that cloud solutions offer to organizations. However, as with most things in IT, the picture becomes less clear the closer you get to it. In fact, there are a number of hidden costs to cloud computing that can mean an overall increase in expenditures. Identifying those costs out of the gate lets you minimize their impact and still realize significant cost savings in your cloud solutions.

Here are some of the hidden costs of cloud computing you need to consider:

  1. Data moving costs. If you have large volumes of data, you can be looing at thousands of dollars for a one-time move from you storage systems to a cloud provider. Much of that charge will come from the bandwidth needs, as many cloud providers will charge upload or download fees. Add in the cost of data growth rates over time, and you can be looking at significantly higher fees within just a couple of years. The key is to identify how much data you have to move, and accurately project how much you’ll need over an initial three-year period, and factor in those costs.
  2. Integration costs. In an internal environment, you can integrate disparate applications in a number of ways (through connectors, third-party apps, or more). In some cases, however, cloud providers don’t offer that kind of integration. If they do, you can be sure there’s a fee involved. For example, integrating Exchange with a PBX or other phone system may not be possible (or may be very expensive).
  3. Software testing. Sometimes, you’ll encounter a vendor app that hasn’t been run in a cloud environment. You’ll wind up putting out time and money if you’re using servers or apps that the cloud vendor isn’t prepared for.
  4. Organizational overhead. When you host an application internally, you may not need to pay for things like facility space or even power needs. Those may be factored into a departmental or organizational structure. When you’re relying on the cloud, suddenly you’re paying for power or facility rental where previously that was under the auspices of a facilities department.

Realizing true savings from cloud computing solutions means factoring in each of these concerns.


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