It is important to remember how costs should be compared when migrating to the cloud. An organization is saving a tremendous amount of overhead when utilizing cloud services. For example, costs no longer incurred include hardware, maintenance, applicable licensing, rent for colocation, server administration, info-security, audit resources, physical security, building maintenance, etc. New costs for an organization can occasionally come down to a simple monthly (or annual) invoice. These costs depend on the types of applications running, how many are running, any enhanced security, volume of traffic, amount of transactions, processing power, etc. It may not always feel like cloud services cost less than managing your own applications in-house, however when properly itemized, the end result may be surprising.
Always remember, some functionality doesn’t always show up monetarily. Cloud services offer the ability to instantaneously turn up (or turn down) processing power, connectivity for anticipated volume, storage capacity, and so on. Yes, there is a charge for some of the above, but it also can be turned down if not needed. The point however is, the ability to turn it up or down “in a moment’s notice” is one of the most powerful and dynamic tools in cloud services. On-line marketing blitzes and promotions really take advantage of the cloud services and the dynamic tools it offers. How about the fact simply deploying a VM in Azure replicates your data in three (3) different storage locations by default. Selecting the Geo-Redundant storage option gives you a second physical location and three (3) additional stored copies. Tough to put a value on this.
Most often JCI will see clients who have migrated to the cloud save over the long-term simply over hardware replacement and maintenance. If your own server fails, another has to be purchased, or you engage a vendor, possibly replace disks, etc. For similar issues in the cloud, you’ll typically receive an e-mail 30 days in advance discussing the upgrade strategy… and within a 10 minute period, the VM in question has been replaced with a newer version.
Also keep in mind, the more you consume the less you pay, in a relative sense. Each successive TB will cost you less. Utilizing SaaS vs. PaaS solutions can lower your costs. An SaaS solution will not only save you monetarily, it will alleviate costs for supporting and managing server instances. Reserved instances provide a significant discount (up to 75%) compared to on-demand pricing, specifically when you commit for several years ahead. Additional savings can apply when paying upfront (all or in part).
Going serverless offers an additional way to save. In this case, organizations pay only for the actual amount of computational services provided. There no longer is a need to pay for VMs. Serverless services may be the next generation of cloud infrastructure.
Organizations should keep a close eye out for unexpected costs. Watch your data governance carefully. Having too much of technical freedom can get an organization in trouble. On occasion, the technical staff may forget to turn off VMs not needed at the time. Monitoring resource allocation is imperative – costs can grow uncontrollably. Planning up to 18 months ahead is advised. Watch your software licenses as well. Enterprise systems, such as database servers, are sometimes licensed per CPU core. The more CPUs in a server, the more licensing will cost. If your cloud solution is scalable and you have numerous CPU cores in the cloud, a license can become cost prohibitive.