Cost savings were once a major selling point for cloud computing. But rising energy bills, inflation, chip shortages and missed revenue opportunities have all led providers to increase their costs. Canalys predicts that prices for public cloud services will rise by 30% in Europe this year. SMBs will find their already tight budgets put under even further pressure by rising cloud costs.
But the real kick in the teeth is that they probably won’t realize additional benefits either. Over the past decade we have seen a flight to the cloud due to the promise of unlimited computing resources, scalability, storage and access. To maintain a cheap image, cloud service customers often overprovision the number of users on a single cloud instance, resulting in very poor performance for end users.
What should SMBs do to ensure they don’t buy from cloud providers that focus on profit over performance?
These limitations do not mean that organizations should opt for on-premise solutions. Instead, they should be careful in how they assess hosted solutions to ensure transparency around the platform, costs, benefits and performance before making a decision.
Let’s explore…
The overpromise of major cloud vendors
The core of the cloud is hardware. Cables, switches, servers and firewalls, they are really technical and that no one wants to think about. And a huge amount of hardware is required to run cloud services at scale.
That’s why tech giants tend to charge based on usage – to recoup their extensive investment in building IT infrastructure resources. So if you see their services advertised at low prices and with a list of benefits that seem too good to be true (like unlimited scalability, for example), they usually are. When it comes to actually using these cloud services in practice, it will be much more expensive than many organizations expect, especially those that need to use powerful, powerful tools such as Revit, Vectorworks, Bentley or Rhino.
Businesses looking for cloud-based solutions should be aware of this marketing ploy and ensure a careful evaluation process takes place to understand how much they would ultimately spend in the long run. By approaching the cloud in this way, SMBs can ensure they don’t end up with unaffordable monthly bills later.
Avoid outdated hardware
SMBs should also be aware that suppliers will often use outdated hardware to reduce their costs and maximize the value of each unit.
Using older hardware comes with major performance considerations should you decide to use these cloud-based services.
High costs do not mean 100% uptime
When you pay more for services, it would be natural for SMBs to assume that major vendors can maintain 100% uptime, especially since they bring unlimited resources and points of presence to the market. But this is wrong. In reality, services from the likes of Amazon AWS and Microsoft Azure are going bankrupt and when that happens, they shut down huge swaths of the global services that depend on them.
What’s more, despite their seemingly unlimited capacity, companies of this size find it more difficult to identify the source of downtime problems due to a larger and more complicated infrastructure. This leads to longer downtime periods that impact organizations of all sizes, but especially SMEs that often need to be agile and fast to compete with larger competitors. This is another important aspect to consider when choosing a cloud provider, as longer downtime equates to greater vulnerability.
It’s not all doom and gloom
I’ve talked about the dangers of large cloud providers, but this doesn’t mean that companies should return to on-premises infrastructure that doesn’t suit their needs, such as enabling high performance, hybrid or remote working. Instead, companies should take the time to understand how to integrate hosted services into their organization, asking the right questions about the vendor’s platform, costs and benefits along the way. This will ensure that smaller companies can keep costs in line with their business objectives.
So as SMBs look to move away from on-premises infrastructure, they should ask themselves the following:
1. Does the hardware used to run the service give you the best level of performance for your investment?
2. How much more resilient will this service make your organization?
3. What will the total costs be and how do they compare to alternative cloud providers?
4. What will be the ultimate return on your investment? Whether this means operational efficiency, business continuity or the ability to move to a smaller office, it must be in the best interests of your business.
Transparency is key
It’s critical that SMBs, as well as organizations of all sizes, have full visibility into how hosted services impact performance and costs. This allows organizations to get the most out of the cloud, without any shocks further down the line, such as rising costs. You just have to know what to look for.
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