Navigating the shadows of Cloud TCO

Ever wake from a nightmare, it’s pitch black and you have no idea where you are? Many IT Leaders experience something like this, as they try to determine the real cost of cloud computing, especially those that have been lured by the promises of a low-cost cloud provider. A quote from Frost & Sullivan’s white paper The Truth About Cloud Price-Performance sums up the nightmare facing some IT Leaders attempting to quantify cloud TCO:

"Some businesses that chose a cloud service provider based on low published rates are experiencing higher costs than anticipated. Others are fielding complaints about unacceptable application performance. Still others are realizing they have no idea whether they are paying too much or too little for what they are getting."

The nightmare gets worse. As a recent Frost & Sullivan Stratecast survey reveals, many IT Leaders not only don’t know the real costs associated with cloud, they are experiencing drastic cost overruns that lead to credibility issues!

"If they miscalculate costs upfront, IT leaders not only have to find a way to manage the budget gap—they may also find their credibility damaged among the executive team. Thirty-two percent of respondents in the Stratecast survey said their biggest challenge in building out their cloud strategy is obtaining additional budget; another 22% were concerned about ongoing support from business leaders. Fifty-five percent expressed concern that the return on investment would not be sufficient to justify moving additional workloads to the cloud."

So, how do you find your way out of the darkness to unveil the real economics of Cloud TCO?

Step one might be to look at detailed comparisons of cloud TCO results for three prominent vendors. The comparison guide I wrote, Cloud IT economics: What you don’t know about TCO can hurt you, can shed some light on the subject.

The guide provides a comparison of performance and cost for four commonly provisioned cloud workloads – CPU intensive, storage intensive, network intensive and hosted private cloud. It discusses the often overlooked factors that should be the foundation of cloud TCO, including capabilities that can accelerate business agility and quantifiable results, the performance required to drive compelling customer experiences, and the real cost drivers not included in many cloud provider proposals.

Cloud IT economics also reveals commonly overlooked details and hidden costs not found in initial proposals, which many IT Leaders don’t discover until later. I’m talking about little annoying things, like up charges for higher CPU and storage performance, lack of operating system currency or compatibility, additional charges for moving workloads between data centers, incremental costs for higher levels of security, or charges for technical support. All of these add up and impact cloud TCO. And that can ultimately impact your enterprise’s ability to achieve speed, flexibility, insight and innovation.

If you’re losing sleep over the reality of cloud costs, perhaps you should take a closer look at what’s really important when evaluating cloud TCO and comparing providers. Bring the TCO question out of the shadows and into the light, and banish that nightmare.