Will you save money in the cloud?

Moving to cloud providers like AWS, Azure and Rackspace provides a potential efficiency gain but not every application should move to the cloud and not every customer will save money by moving to the cloud.

In a recent consultation with a CIO of an insurance company he shared that he saw a $600,000 overage in their AWS bill on a monthly basis because they had so poorly projected the utilization levels.

You must also consider the loss of visibility when your performance reporting rests in the hands of your provider. It is not surprising that a number of vendors have built solutions to help monitor cloud performance for clients who want more than the basic level of reporting available. See Cloudamize and CloudHealth Technologies as after market options for reducing risks.

Hidden costs in the cloud

Many companies move to the cloud and see the Operating expense as a predictable cost and a reason to reduce the capital expense.

But did they consider the soft costs like training their team to use the remotely hosted applications
Did they consider the migration costs? Those applications wont move themselves.
Do they factor in the added pressure and costs to maintain internet availability, at all times?
Did they consider the cost of SD-WAN technologies to help improve application performance?
Can you afford to pay for private cloud deployments where your apps are not co-mingled?
Do you have business partners that need access to your applications? What is the security implication of connecting these partners?

When to choose the cloud?

For companies that don't have deep IT teams the cloud presents an attractive option. If the prospect of offloading the securing of your applications and the reliability worries of hosting your own applications seems attractive, then the cloud presents a great solution.

As one of our cloud providers states, "The big, unmanaged providers sell only multi-tenant public cloud, and they argue that one size fits all. We believe instead that some apps run best on public cloud, some on dedicated hardware, and some in private clouds. Our hybrid approach offers customers the best fit for their unique needs. We meet customers wherever they are on their journey to the cloud, and then help them get where they want to go."

If you need immediate scalability and the ability to quickly adjust to seasonal volume fluctuations the cloud works well for these use cases. If you have a business that needs to quickly respond to volume changes the cloud presents a great option. Just know that it may not present a guaranteed cost-savings and that you need to understand your risk tolerance.