Posted in: cloud computing, Special Report
Many businesses are turning to cloud computing in an attempt to get more out the IT budget. But organizations must plan for potential hidden costs if they want to get an accurate picture of how much they’ll save.
In addition to subscription fees, there are plenty of other costs associated with using cloud computing services. While those costs may not be readily apparent, it’s critical to consider them if the company is going to get an accurate sense of whether the Cloud will help them save in a particular area.
Here are nine common hidden costs of cloud computing services, according to a recent report from the Information Systems Audit and Control Association (ISACA):
1. Technical readiness
While cloud computing helps organizations save because the services are hosted on the vendor’s premises, some upgrades may be needed before a significant move to the cloud. For example, the organization may need more bandwidth to handle the amount of information being transferred between the company and the cloud provider.
2. Implementation costs
Any significant change will require a significant amount of time, money and effort to implement, and that includes moving parts of the IT infrastructure to the Cloud, or moving to a different cloud computing provider. For example, it will take time to move data — and the vendor may charge upload fees — and de-provisioning an in-house system will also take effort.
3. Configuration and customization
While some vendors allow their cloud services and applications to be customized somewhat, companies may need to pay extra fees.
4. Cloud computing vendor management
Although management is typically easier with a cloud service compared to in-house IT, companies still must dedicate some staff time to managing their cloud vendors, including time spent monitoring service levels, responding to incidents and conducting security audits.
5. Security and compliance
Cloud computing introduces new risks that data will be exposed to cybercriminals or that the company will fall out of compliance with privacy regulations. Businesses must account for those risks when they move to the Cloud, and they may need to invest in additional security and monitoring tools to keep their information safe.
6. Data backups
All cloud computing vendors perform backups differently — some may automatically back up all data, some may charge extra for it, and others may leave it up to the customers to take care of back-ups on their own.
7. Lost productivity
While cloud computing services in some cases are more reliable than their in-house counterparts, no service can be guaranteed to remain available 100% of the time. Also, bandwidth and other performance issues may cause slowdowns in service. That loss of productivity will translate into lost money for the business.
Transitioning from an in-house service to a cloud computing service may require a business to invest in training. That includes training IT staff to work in the new computing environment, and training end users to use new applications, if necessary.
9. Termination costs
In addition to hidden costs incurred while implementing a cloud computing service, there may also be extra costs involved with ending a service contract. That might include contract termination penalties, as well as the cost of moving data back in-house or to another cloud vendor.
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