True Costs of Cloud Services

Businesses from every kind of industry now rely on cloud computing; big or small, it has become an integral part of so many companies. Despite that, many people still do not understand the full extent either of its uses or its costs. All of this leads to many people devaluing cloud storage. Sometimes even tossing it aside out of frustration.

 

New research from SoftwareOne, has highlighted this issue with a study that details many of the struggles that businesses are facing with cloud computing. This study polled 300 C-level and IT decision makers across North America. The results are both surprising and sobering. It clearly shows the mountains left to climb between what cloud technology can do and our understanding of it. The research was separated into four different sections of the data points they gathered.

 

1. The myths of the cloud

In an industry breakdown, a demanding 49% of people in the IT, technology, and telecoms industry were all listed as concerned about cloud budgets and unpredictable costs. Normally, you would know the value of the things you are buying for your business. If you are purchasing office furniture or hardware, then you might browse offers, request quotes, and make an informed purchase.

 

You might hope this would hold true when it comes to using the cloud and it should. However, many people misunderstand how to allocate their resources when hiring cloud services. Many services offer a pay-as-you-go method, and this makes sense because then you are only paying for what you use. The problem arises when you or your employees do not manage how much you use.

 

The cloud is very easy to use, and this creates a pattern of use. Without cost control thinking, your next bill can be quite a surprise. In the SoftwareOne study, 67% of those asked mentioned struggling with either unpredictable costs or a lack of transparency. Another confusing piece of this puzzle is the distance between the IT decision maker and the C-Level employees. The study showed a nearly 1.2 million dollar discrepancy between what each person thought the perceived annual IT budget was. This disconnect is a dangerous trend.

 

2. Cloud management is both a challenge and a priority

Deciding who will be managing your cloud deployments is another crucial detail. There are three different paths to take here. Each one comes with its pros and cons.

 

  • 42% relied on external third party software solutions to manage cloud deployments
  • 35% decided to partner with IT vendors to identify and address their business and IT needs
  • 26% believed that cloud pricing was more complex than just onsite offerings

 

One of the big reveals in this section referenced just how confusing this whole process is for many people. The most significant divide is between onsite services and the cloud services. However, when asked to choose between the two, 56% of those questioned said they were both equally complicated and time-consuming to use. This tells us that the applications and advantages of these forms of technologies have not been explained well to these people.

 

When asked about pricing between onsite and the cloud, once again, 56% said both options were equally complicated and confusing as each other. This percentage shows a fundamental lack of understanding in the processes they are looking to hire. When you don’t understand something, it is nearly impossible to budget effectively for it.

 

3. Onsite services aren’t going away

According to SoftwareOne, 45% of these businesses were either investing in onsite services or maintaining the ones they already have, compared to the smaller 28% of people who describe their approach to IT as working from cloud applications. In-house office suite methods are something that people still feel they understand.

 

When approached with new ideas, most people running a business will go with what they know and what has worked in the past. Even if the predicted savings are high, you might trust your in-office hard drives over a data center you’ve never seen. Finding trust in cloud-based services will take time.

 

4. The hybrid approach

By far, the most popular approach is the hybrid version of both cloud and onsite services. A combined strategy is much simpler and easier to understand for many people.

 

  • 53% take a hybrid approach to their IT needs
  • 28% have placed their IT needs primarily in the cloud
  • 19% say their IT needs are met onsite

 

A hybrid is a comfortable step into the future for many people. It also reduces risk and allows for a gradual process of learning about the cloud and its services. SoftwareOne and the hybrid approach preach a four-step process called Retire, Retain, Rehost, and Replatform.

 

Retire: Some applications or software need to be retired as they are no longer relevant or have low utilization across your organization. By cutting these programs loose, you are providing a cost-effective gardening of your resources.

Retain: There are still many programs that are best kept in-house for either cost or security reasons. The advancements and applications of the cloud are growing every day, but it can’t do everything. It is prudent to examine what services you will need to keep onsite.

Rehost: A consumption-based plan is still the best way to manage your cloud costs, however, it does include the challenge of having to manage your usage. You need to place controls on cloud authority and access, so you know what you are paying for and why.

Replatform: You need to build a long-term strategy for cloud usage. You cannot just jump in and hope to figure it out on the way down, as it will require time and an investment in educating yourself. As a leader, you need to look at the structure of your business and see how each application can benefit from the uses of the cloud.

 

For more information and a more detailed breakdown of this study, visit [SoftwareOne.com].

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