9 reasons the Cloud won’t save as much as you think

Many businesses are saving money by turning to cloud computing services. But too often, companies fail to consider some common hidden costs and don’t save as much as they had planned. 

A cloud computing service’s regular subscription fee is often more manageable than the large investment required to run the same service in-house. Plus, using a cloud service can eliminate recurring costs for maintenance and the staff time required to manage an in-house system.

However, the situation often isn’t that simple. 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.

Before businesses sign a cloud computing contract, they must make sure they are taking all potential costs into account. 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 organizations may save money using cloud computing because they don’t need to use their own internal hardware to host an IT service, they might need to make significant upgrades in other areas. 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

One of the downsides of cloud computing is that the same service is offered to many different organizations — but in many cases, the company will need to make changes to a cloud application, or change configurations to meet security needs. While some vendors allow a level of customization, that may cost extra.

4. Cloud computing vendor management

Although one of the benefits of cloud computing is that it puts the bulk of the management work in the hands of the cloud vendor, that doesn’t mean businesses can just move IT services to the Cloud and forget about them. 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 make sure data is being backed up. Companies must determine the level of backup that they need for a particular service, and calculate how much that will cost.

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.

8. Training

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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