Are your cloud cost saving calculations wrong?

A cloud made up of ones and zeroes

Posted on Wednesday, February 22, 2017

For several years, businesses have been rushing to host data and applications in the cloud. Promises of reduced capital spend and infinite scalability are powerful motivators for CTOs trying to control costs.

However the ease of adoption has created a major new challenge – data fragmentation. Hosted applications are particularly problematic, creating data silos for every platform used.

As businesses strive to become more data-driven, an inability access all of their information becomes a major stumbling block. In fact, IDC reports that 40 percent of businesses have been forced to bring systems back in-house because they were unable to adequately control their data assets.

Minimal outlay masks major long term costs?

It could be that many businesses are approaching the issue of cloud costs from the wrong angle. Of course the cloud is cheaper in terms of reducing outlay for capacity and running costs – that fact is undeniable.

But if the use of cloud systems restricts access to information, or make it impossible to gain a complete overview of data assets, there is a problem. If transparency of data is crucial to driving future profitability, obstructive cloud systems create a large, on-going cost drain.

And over time, that cost will almost certainly exceed the savings associated with cloud deployment.

CTO action points

For the CTO this means two things. First they need to consider how data is accessed and shared before adopting new cloud services. Where questions arise about transparency and the impact on other operations, an alternative service should be selected.

Second, the CTO needs to work with the rest of the C-suite to regain control of IT purchasing. The ease of sign-up means that many business units have started buying and deploying their own cloud services, creating their own data silos in the process. To avoid wider problems with data transparency across the organisation, CTOs need to re-centralise purchasing.

One final thought. Where cloud services are causing problems, CTOs should also seriously consider whether there are on-site solutions to assist. Re-deploying post warranty hardware could help to provide the additional capacity required to assist with growth plans, also without any additional capital outlay.

Whatever happens, cloud services appear to be at something of a junction as businesses pause to take stock of the state of play. And that’s probably a good thing for the sake of their operations and customers.

Next steps

Want to learn more? Get in touch today to discuss your post-warranty options today.