Expert Advice for Medium and Midsize Businesses

SMBs Beware: 4 Hidden Costs of Cloud Infrastructure

Sasha Banks-Louie
Brand Journalist

Most cloud infrastructure vendors offer companies a stable and secure environment on which to build and run their applications without having to manage a data center, invest in hardware, or install and update software. While most cloud vendors provide the same types of services, they differ in how they charge for and deliver those services.

Thinking of migrating your data center to the cloud? Small-to-medium businesses (SMBs) can prevent runaway spending for their cloud infrastructures by evaluating vendors based on four hidden costs:

1. Compute Services Prices That Don’t ‘Autoscale’

Among the most essential elements of cloud infrastructure, compute services provide companies with the raw CPUs/GPUs they need to process data and workloads. What makes the cost of compute so difficult to estimate is that companies need varying degrees of capacity at different times. Small variations in cloud vendors’ pricing models can mean huge differences in customer costs.

Bay Area adtech firm Widget learned that lesson the hard way. “We were spending enormous sums of money with Amazon Web Services on server capacity that we weren’t using,” says Vik Mehta, cloud evangelist at VastEdge, Widget’s software implementation partner.

To get truly “elastic” capacity, the pricing of cloud-based servers needs to reflect the exact capacity a company actually consumes, says Brent Juelich, director of business development at Oracle. But many cloud vendors price their compute services based on estimated capacity ranges.

With AWS, “you’re forced to decide up front on an elasticity window,” Mehta says, adding that Widget had wanted a lower capacity for day-to-day operations with an option to increase capacity for brief periods during testing. “But AWS didn’t allow that.”

2. Bulk Storage ‘Discounts’ That Don’t Render Savings

Cloud storage is becoming increasingly attractive as companies collect ever-greater amounts of data. But selecting the right type of cloud storage can be tricky.  

That’s because some vendors peddle bulk discounts for block and object storage, often locking companies into capacity they won’t need. “Our storage needs are based on our customers’ storage needs, which can expand or contract quickly, making it difficult for us to forecast,” says Michael Seidler, vice president of business development for V5 Systems, an outdoor security platform startup.

Read about the two other hidden costs in the full story on Forbes: 4 Hidden Costs Of Cloud Infrastructure

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