Cloud Storage: 8 Ways You're Wasting Money
Don't fall into the "cheap" and "easy" cloud trap. Know how you're spending your money -- and why.
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Cloudy with a chance of budget overruns
There's a litany of platforms and applications out there under the great "cloud" umbrella. Storage, one part of the broad category, epitomizes this trait of cloud computing as a whole: an almost overwhelming array of choices.
The crowded storage field ranges from consumer champions like Dropbox, which have recently pushed to appeal to business customers, to tech titans such as Microsoft, which have long held sway with IT but are now trying to be all things to all people. Microsoft alone offers a menu of backup and storage options across its OneDrive and Azure platforms.
Choice isn't the only hallmark of cloud storage. The category also typifies the twin prongs of many sales pitches for cloud as a whole: It's cheap and it's easy -- especially relative to so-called legacy alternatives that require on-premises hardware, software licenses, and the manpower and expertise to manage it all. Reduced capital expenditures (capex) -- usually in the form of hardware and licensing costs -- have been a fundamental of vendor sales pitches since "cloud" became of the buzz-iest of IT buzzwords.
When it comes to storage, those sales pitches aren't without merit. Building a datacenter from scratch -- much less properly managing one -- ain't cheap. And thanks to cutthroat competition for enterprise business among heavyweights such as Amazon Web Services, Google, and Microsoft, as well as the likes of Box and Dropbox, cloud storage has rapidly become commoditized. Gigabytes cost a few pennies (or less) per month; your first terabyte of standard storage runs 30 bucks a month on Amazon's S3 cloud, based on regular pricing, and the cost-per-GB decreases with higher volumes.
Factor in other incentives that vendors dangle from their broader cloud platforms to lure prospective customers -- such as Google's $100,000 credit for Internet startups that come on board -- and you can certainly see why cost is such a common part of the cloud pitch.
"Easy" tends to make a less straightforward case, but the reasoning isn't particularly hard to follow: Why deal with the headaches of building and maintaining scalable storage infrastructure in-house when so many other companies have already done the heavy lifting for you, especially at these prices? Cloud storage, like other cloud platforms and applications, can enable IT to get out of the servers-and-disks business to focus on other initiatives.
Yet cloud storage's two primary selling points are also at the root of some of its primary pitfalls, particularly when it comes to keeping costs within in check. For starters, if you're a bit too easily seduced by the potential for reduced capex -- usually a biggie in the "cheap" portion of vendor sales pitches -- you're probably blinding yourself to other costs down the road.
A respondent in InformationWeek's 2014 Cloud ROI Survey noted that executives and managers often view cloud as a "panacea to reduce capex" because it doesn't necessarily mean signing off on new hardware acquisitions, software licenses, or salaries -- yet just as often they fail to properly evaluate limitations, risks, long-term costs, and other issues that will eat into the budget in other ways.
"Oftentimes, the savings anticipated by management is quickly wiped out because volume of use is higher than projected and costs rise as a result since no good checks-and-balances or request/authorization policies are properly created and enforced," the survey respondent, an IT manager at a financial trading firm, said.
While "easy" might bear true in certain scenarios -- one survey participant noted the intuitive user interfaces of some cloud platforms can reduce training needs, for instance -- it, too, can obscure challenges that quickly undo any benefits in terms of simplicity. Downtime and security breaches come to mind.
When and where does cheap and easy cloud storage become an expensive pain in IT's side? Read on for eight ways you might be wasting money. It's not like you're not already thinking about it: the majority of respondents in InformationWeek's Cloud ROI survey are either "concerned" (38%) or "very concerned" (20%) about the potential for runaway cloud costs in certain conditions.
Have you been hit with your own unexpected costs when storing data in the cloud? Share them with us in the comments.
Cloud can reduce capex. This is usually music to the CFO's ears, but the savings won't last if you've got no idea what you're spending on an ongoing basis. To be fair, half of the IT pros surveyed in our Cloud ROI study include ongoing expenses as part of return on investment (ROI) calculations, and 55% measure operational expenses for the life of the project. But that means 45% to 50% don't do either -- one in five respondents, meanwhile, don't do any ROI calculations at all for cloud projects.
This may be where the "cloud storage is cheap" concept does the most harm -- the pennies-per-GB pricing of some enterprise providers might lead to laziness when it comes to billing. Some 21% of IT pros in our Cloud ROI survey don't know if their organization has any cost-containment protocols in place -- and those include reading the monthly bill.
A related red flag: You read your bill, but only to find out what you owe -- not what you're using, or, as may be the case, what you're paying for but not using. In fact, one respondent in our Cloud ROI survey said we shouldn't be thinking about Return on Investment at all -- rather, she advocates thinking of it as Return on Use. "Cloud is about use," she wrote. Indeed, if your users end up consuming far more capacity than you anticipated, or you're simply paying for a ton of storage that you don't actually need, you're likely blowing up your ROI -- er, ROU -- projections.
Organizations change regularly -- and so do their data and storage needs. Yet nearly one in three firms in our 2014 Cloud ROI study never revisit their public cloud capacity to see if it needs to be "right-sized" based on actual consumption.
Fabulous uptime and reliability on the part of your cloud storage vendor won't do much good if your office is hampered by an unreliable network or communication infrastructure, which can disrupt scheduled backups, limit access to stored data, and cause other problems. One IT manager in our State of Cloud Computing survey listed this as one of the chief challenges facing cloud computing in general: "Excellent uptime of the cloud provider does not help when the line between us and them is down frequently."
Plenty of IT executives and managers are worried about security and data integrity, especially in public cloud environments. Data security and unauthorized access make up the top three concerns about cloud services in our State of Cloud survey, for instance. Yet the costs of an actual incident are tough to predict -- both in terms of actual loss and in terms of harder-to-measure risks like reputation damage. So you'd better be comfortable with your cloud storage vendor's security and related protocols; if there's a breach, the damage won't be limited to them.
If your organizational strategy for data retention is "store everything forever," you might want to revise it before moving to public cloud storage, possibly as part of a broader data governance policy. Remember, you're paying by the gigabyte. Without a sensible data retention strategy that allows for deletion of information on a set schedule, or at least a transition to less-expensive "cold" storage, you're looking at cost projection that perpetually points up.
Sartre would be proud. IT executives have long bemoaned vendor lock-in, and cloud storage comes with the same potential. Once your data is there, is it stuck there forever? What are your options in various scenarios such as mergers and acquisitions, unfavorable pricing changes, vendor failure, data breaches or other security incidents, and so forth? This should be a potential advantage of the cloud over expensive on-premises IT deployments -- it's not like you can schlep that hardware investment back to Best Buy for a refund -- but you need to know what you're signing on for in advance. One exec in InformationWeek's Cloud ROI report recommends asking for a "walk-away" clause when moving to a new cloud environment, to enable a quick exit if reality doesn't match the sales pitch.
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