Cloud Cost Containment Strategies: Benchmarks for Effective Cloud Migration


Cloud Cost Containment Strategies: Benchmarks for Effective Cloud Migration

By Special Guest
Jim Pathman, CEO at Data Resolution
  |  October 31, 2016

There’s a quiet, yet significant, revolution taking place in the technology sector.  It’s the muffled sound of enterprises selecting software solutions without the usual cadre of research, budgeting, IT department involvement, and integration.

I call it the consumerization of software – the do-it-yourself trend of companies selecting cloud-based solutions that are literally available as fast as it takes to flick a switch.

To an extent, it’s a positive trend. Empowering enterprise to access robust solutions to grow and manage key business operations at a much swifter, and cost-effective pace is a value to enterprise and business alike.

But there are caveats, and reasons why tapping into the knowledge of cloud experts can be a value-add for the end user. Because that quiet revolution can come to a loud and budget-busting halt if the enterprise has not selected the right cloud solution for its needs – and a bill for data arrives that is multiples of what was originally budgeted.

So, in the interest of business and technology partnership, let’s take a look at some basic benchmarks a company should consider before making that cloud commitment.

Benchmark I: Initial Investment vs. Usage Cost

The value of today’s cloud technology resides in its ability to offer up software solutions that are easy to access from both a technology and cost point of view.

However, the cost of accessing the cloud solution is very different from the cost of using it. The first, and most critical, benchmark, is to get a handle on how you’ll be using the solution: the amount of data, number of users, and more.

If your solution cost is tied to usage, then the initial benchmark of entry price is irrelevant. What you’ll want to understand, and make final decisions by, is the cost of usage as you proceed.

So, have a solid understanding of your needs, and how you’ll be using the cloud.  Before you make that final cloud selection, be sure you are clear not only on the type of data that will be on the cloud, but the volume of activity, and any other factors impacting access.

Benchmark II: Cloud Construction

Understanding the underlying nature of the cloud solution is key to mastering this benchmark. Some cloud services are an always-on type of application; it doesn’t scale up or down with demand, and the more you use it, the more expensive it is for you as the cloud service is always on.

For higher-volume usage, demand-based cloud computing is the smarter choice, even if initial entry costs seem more expensive. If you’re not forecasting high demand, then the always-on model may suit your needs just fine.

A good example is NetFlix, the consumer king of demand-based computing. It operates a number of servers that only go into action when demand warrants it, thereby minimizing costs during slow periods. So, it’s easy to project that its servers will be largely activated on weekends and evenings, and less so on a Monday morning.

On the opposite end of the performance spectrum are enterprise resource planning cloud platforms. These are systems that need to always be on, with transactional data consistently flowing in and out from different interfaces. This is not well suited to scale up or down, so it can be costlier when demand rises.

It should be noted here that cloud solution providers are not trying to surprise companies with fees; their goal is a long and happy customer relationship.

Rather there’s been such an explosion in cloud-based services that the way the marketplace interacts has changed, and not completely caught up with the new technology reality.  

That brings us to our next point.

Benchmark III: Security and Redundancy

The ultimate benchmark for cloud success isn’t just having a solution readily available. It’s ensuring that it is secure, and that the critical data stored in the cloud has a backup somewhere.

Many smaller enterprises assume that security and redundancy are baked into every cloud solution, particularly those offered by global technology providers.

The reality is that unless a cloud solution specifically states that security and backup are provided, it is smart to assume it is not and that you should make your own arrangements.

Purchasing a cloud solution is just the first step in the software solution process for an enterprise. In short order, research and selection for system security and redundancy should take place, as no data on any cloud solution should ever be left without adequate safeguard.

Benchmark IV: Finding the Right Data Home

This topic is a favorite of mine, and perhaps another part of the article I should have started with first. This is where we evaluate cloud vs. metal – and my benchmark opinions in this arena may surprise you.

First of all, I’m not going to recommend what you think: all-cloud, all the time.

The reality is there are a number of options, and each is right for the enterprise under certain circumstances. The key to managing this decision is to think of the various options in terms of risk management.

Bare metal, cloud, hybrid: Which is better for your enterprise and under what conditions?

To answer this question, there are three more questions you need to address:

  • Is my data critical?
  • Is it being protected?
  • How will I use the data?

Your answers will reveal the right solution for you. To give an example, let’s look at question number three and data performance.

Looking at Amazon again, an enterprise may see that it has a cold storage option that, at first glance, is really inexpensive. Safely storing data is very smart, and a good way to ensure both security and redundancy for your enterprise. 

However, look a little closer and you’ll readily see it is not intended for active use.  So, if you need to access that data, you’ll end up paying for the storage, and the cost of moving it out of cold storage and accessing it.

In essence, you’d be paying for that data twice, and any data-storage savings you would have enjoyed would melt away rapidly. Better to research a solution that offers affordable data access and only store the data you’ll need to keep, but not use.

Bridging the Cloud Solutions

To wrap up, enterprises of all sizes can benefit from the flexibility and power of cloud computing. But, when it comes to decisions ranging from hybrid vs. cloud to on-demand vs. always-on, putting time and effort into research, talking to experts, and engaging in usage and budget forecasting will not only deliver the promise of cloud performance, it’ll ensure a cost-effective return on investment.

Jim Pathman is CEO at Data Resolution.

Edited by Alicia Young
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