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Cloud benefits needn’t come with the risk of nasty surprises

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Concerns about unexpected and significant costs shouldn’t deter businesses from shifting away from traditional ways of managing IT equipment and services.

When it comes to monthly utility bills, the last thing we want to experience is ‘big sticker’ shock from unforeseen and complex fees. This same thought applies to businesses, when it comes to managing their IT spend.

Today, the business equivalent of a complex energy bill is a cloud computing bill. The amount of detail on a cloud invoice can be overwhelming for IT and finance teams. For procurement teams who are involved in signing off cloud costs, monitoring spend and understanding the true operating costs of cloud can be taxing.

If you’re leading IT or finance functions, cloud management is no longer a 'nice to have', it’s a must. As more organisations turn to cloud, and IT spending is allocated or reallocated to fund cloud-related initiatives, managing spend shouldn’t be a pressing problem.

However, according to Flexera’s ‘2020 State of the Cloud Report', businesses are struggling to accurately manage cloud spend. Organisations were reported to have overspent on their cloud budget by an average of 23 per cent, and cloud spend is expected to increase by 47 per cent next year.

With organisations seeing cloud as a major shift away from traditional ways of managing IT equipment and services, controlling budgets shouldn’t stop them from taking advantage of what the cloud has to offer. To stay within their spend estimates, IT should look at where they can either control or save money, such as by reducing spend on cloud connectivity. 

The rise of cloud service providers has meant that organisations are now able to take a hybrid approach with their IT infrastructure using public and private cloud systems, in addition to on-premises infrastructure. In order for companies to make the most of the cloud, organisations should ensure they have the necessary flexibility in their network connectivity. This means being able to connect to the cloud based on business-specific workloads and requirements at any time.

A more traditional approach to network connectivity, however, can see businesses stuck in multi-year contracts, rigid infrastructure, and an inability to scale up with demand. For organisations to truly reap the benefits of the elastic cloud model, they need a solution that allows them to optimise network connectivity in an equally flexible manner.

Another challenge IT departments face when thinking about reducing cloud spend are data-egress fees. Cloud-egress charges are the cost for data leaving your cloud provider, and these fees can make up a big chunk of cloud expenses during large spikes in sustained traffic and end-user consumption. In March, Nasa was faced with an unpleasant surprise with its cloud forecast costs. The space agency received an audit review of its plans to store over 200 petabytes in the cloud by 2025 with unexpected data egress charges in the millions of dollars. As its scientists begin to download data from its many missions that observe our planet from the cloud, Nasa faces the possibility of substantial cost increases for data egress that were initially not accounted for.

Nasa’s story is one we can all learn from. It’s critical for organisations to plan usage in advance and find ways where they can save on these costs to avoid bill shock. One of the best tools for reducing data costs is understanding cloud data egress fees. Accessing major cloud providers using direct connectivity instead of the public internet can save your organisation 50 per cent or more of their data charges.

A Network as a Service (NaaS) platform presents a solution to these connectivity and data egress challenges that allows enterprises to fully reap the benefits of the cloud. It means that enterprises can scale network connections at any time, allowing them to save costs and optimise connectivity performance for each of their cloud resources. What’s more, it avoids enterprises having to commit to long-term contracts, paying one-time charges for set up fees, and relying on implementation teams to deploy on going direct connections to cloud services. Taking this approach also means you can greatly cut down data egress costs.

The cloud brings so many great benefits, don’t let billing knock all that good work backwards. Plan ahead, think about the hidden costs, budget for connectivity, and relax.

Misha Cetrone is VP cloud product at Megaport.

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