Top 3 hidden costs of cloud computing and how to avoid them

A lot of companies are adopting cloud services but are worried about spending too much to cover the hidden costs of cloud computing. Here are some of the things IT needs to look out for. 

Most companies (81%) are either using cloud computing services or plan to do so in the next year, according to a recent survey from Compuware and Research in Action.

In fact, when the 468 IT managers polled were asked what their top investment area will be over the next five years, the greatest number (17%) said cloud computing.

While cloud computing has a number of benefits — such as increased agility, quicker access to new technologies, etc. — the top answer most organizations give when asked why they’re moving to the cloud is the lower cost.

The thinking is simple: Instead of paying to buy, install and maintain a system in-house — plus the cost of all the hardware it runs on — companies can pay a much more manageable subscription to use a system hosted somewhere else.

But in reality, things aren’t always so simple.

Among the IT pros surveyed, 79% are worried about the hidden costs of cloud computing.

If organizations aren’t careful, the services they use may not end up providing the savings the company expected. However, there are steps IT can take while choosing and managing cloud services that can help minimize that additional spending.

Here are some of the common hidden costs of cloud computing organizations need to watch out for:

1. Poor performance

When moving applications from in-house servers to a cloud computing provider, organizations may find the service simply doesn’t work as smoothly as it did before. And even small impacts on productivity can add up over time.

Among the IT pros surveyed by Compuware, 64% said performance bottlenecks were their top concern with managing cloud services.

What can organizations do about it? The best tool to use is likely the service agreement signed with the cloud provider. That document should contain guarantees regarding performance, with real consequences if they aren’t met.

Companies need to make sure their cloud agreements are being followed and that problems are fixed as soon as possible. However, many organizations aren’t monitoring their services to make sure performance is up to par.

2. Cloud outages

Beyond smaller performance problems, organizations are also worried about times when services go down completely. Another top concern, cited by 44% of survey respondents, is lost revenue due to cloud outages.

That’s especially the case since many organizations are using cloud computing services for their e-commerce software. Any downtime in those systems could impact sales, drive customers away or lower the organization’s reputation.

Again, companies need to negotiate for strong cloud contracts, with uptime guarantees that include a way to recoup money for losses if those numbers aren’t met.

Also, it’s important to investigate a vendor’s reliability before signing an agreement. Vendor references can help give an idea of how often outages occur. The website Cloutage.org also maintains a lot of information regarding recent cloud outages.

In addition, the company should have a back-up plan in place for when a critical system goes down. That includes backing up all data in case it can’t be recovered.

3. Vendor and system complexity

While solving IT problems was never easy, as companies move services off their own networks and into the cloud, it’s becoming more complex.

More than a third (35%) of IT pros surveyed said they’re concerned about the difficulty of troubleshooting problems in a more complex cloud-based environment.

Managing various vendors and service agreements is also a challenge for companies, cited by 23% of survey respondents.

The bottom line: Things can get complex when several different vendors are hosting the organization’s applications and data. That’s especially the case when there’s a problem that needs to be fixed quickly.

One way to help is to establish strong communication with the cloud provider. The company’s IT staff should be aware of who to contact in the case of a problem. That means keeping an update list of contacts for each service.

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