How to avoid the hidden costs of cloud computing

Costs of cloud computing

Are hidden costs eroding the benefits of your cloud computing infrastructure? By hidden costs, we’re talking about costs that don’t necessarily show up as a line item on your profit and loss statement. We talked to a number of IT execs and managers to find out what they’ve learned about hidden costs, and how to avoid erosion.

User experience matters most in cloud computing

The cloud gives new meaning to application performance monitoring (APM). Proactive monitoring at a more granular level is the key to an optimal user experience. Conventional IT monitoring tends to focus on uptime, which can often be a lagging measurement. With cloud, it’s not about on/ off, but varying degrees of “on.”

Latency, data/application glitches, and numerous granular metrics all affect the ability to do business, particularly in e-commerce applications. These metrics are not always easy to monitor in a convoluted cloud environment, but they are essential. Today’s monitoring solutions are much better at delivering data that help analysts pinpoint issues before they impact users.

Carefully define and manage your service level agreement (SLA)

Remember, cloud computing operates on a shared/grid computing model. In a public cloud, multi-tenancy means other users can impact your ability to compute – so how you manage the SLA can affect your costs. However, you shouldn’t become more lax with a private outsourced cloud provider. Often it’s the “what if” scenarios that can add hidden costs.

For example, what if your provider decides to upgrade the service? Maintenance can affect performance, but it’s important to understand the impact and be proactive.

Data use, location, encryption and storage all could be the source of hidden costs. Worse yet, if you’re operating in a regulated industry it’s important to know where your data is located to avoid the costs of non-compliance. Should you choose to switch cloud providers, the SLA should describe how to retrieve your data, any costs associated with data collection, and what your provider does with data residing/remaining on its servers.

Avoid compliance issues with industry-specific cloud service providers

One way to avoid hidden costs of non-compliance or additional services to meet regulatory concerns is by using industry-specific cloud computing services.  Healthcare, financial services, and other heavily regulated industries can now take advantage of cloud computing with greater confidence. Many industry-specific cloud providers build in robust security, data management and compliance processes required by regulations.

IDC predicts spending on industry-specific clouds will increase to $100 billion by 2013, up from $65 billion in 2013. My colleague, Nick Clunn, recently wrote about this growing trend in cloud computing.

Manage enterprise cloud computing flood gates

As more IT investments are being made at the line of business level — 80 percent by 2016 according to an IDC prediction — organizations that have a more centralized approach to application lifecycle management may want to rethink their data storage, security and cloud integration strategies and policies. For some IT organizations, this could ambush IT teams months after a rogue cloud application surfaces. Our advice is to have a proactive strategy that that gives users flexibility to choose from a catalog of popular cloud-based applications, while giving IT teams a heads up on the storage, compute and networking capacity required.

Approaching cloud computing from a conventional, on premise perspective could erode some of the cloud computing cost benefits. The most important lesson learned from cloud deployments is to gain greater perspective on how cloud computing works at a deeper level to gain a clearer picture of the actual costs.

Have you incurred any hidden costs in your cloud computing solutions? Let us know in the comments.

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Dennis Smith

Dennis Smith

Dell Contributor at Tech Page One
Dennis is the networking and storage evangelist for He also manages the Dell TechCenter social accounts; click on the tabs above to be connected to them. Dennis has also been recognized as aVMware vExpert.
Dennis Smith
Dennis Smith
Dennis Smith
Dennis Smith
Tags: Cloud Computing,Technology