10 Hidden Costs in the Public Cloud: Management and Risk

By Mark Tonsetic  |  Posted 06-07-2011 Print Email

Retained Management Cost

It's important to keep in mind that you will have overhead for retained services that you will still need to provide internally even after moving to the public cloud. Here are four key management areas to watch:

  1. Security, particularly OS patch and anti-virus management. Certainly, there are routine and augmented security precautions to be taken when working in the public cloud.  There are basic costs associated with software licenses, upgrades and maintenance for patching and anti-virus software.  These costs are present whether a company chooses a public or private cloud, or opts for a more traditional on-premise, physical infrastructure.
  2. Backup. Most public cloud offerings do not include backup.  That is one of the many reasons why wholesale public cloud migration is not even being considered by many enterprises. Many companies would still need a full-scale internal infrastructure for backup and recovery. This is just another cost borne directly by user companies, bumping up the total cost of the public cloud service beyond its sticker price
  3. Load balancing and auto-scaling.  These functions are mandatory in order to be able to handle system requests and achieve optimal resource utilization and avoid overload. These activities require dedicated hardware and expensive new software, and oftentimes these costs fall to enterprise customers rather than being absorbed by the cloud vendors.
  4. Integration services. These are necessary for ensuring seamless compatibility between on-premise systems and cloud-based systems. Organizations moving to the public cloud will need to invest in expensive integration software to achieve this.

Risk Premium

Above all, enterprises using the public cloud must always be prepared for worst-case scenarios. You'll need to prepare for the potential expense of having services transitioned back in-house in the event that your public cloud provider experiences a failure, or you simply no longer want to use their services. It's important to consider the expenses that will be involved in such a migration effort.

Here's one key cost area to watch in this category:

  1. Exit plan. A solid game plan is needed to migrate back from the public cloud to a fully private setup (high unlikely) or onto another cloud vendor (more realistic). This type of exit plan requires additional time and energy as well as access to surge funding. These migration costs would not be high for companies that are already bursting from private to public cloud, or are otherwise embracing standards for portability. But, for most companies, these are not yet common practices, and so any venture into the public cloud should set aside funding for a sound exit strategy.

About the Author

Mark Tonsetic is practice manager at the Corporate Executive Board.



 

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