Originally Posted On: https://nfina.com/public-cloud/

Uncovering the Hidden Costs of Public Cloud Services: Why It’s Not Always a Cost-Effective Solution

Are you considering moving your operations to the public cloud in search of cost savings?  While public cloud services may seem like a budget-friendly solution at first glance, there are hidden costs lurking beneath the surface that could end up costing your business more than you bargained for. In this eye-opening blog post, we’ll uncover the truth about the hidden costs of public cloud services and why they may not be as cost-effective as they appear.

What is the Public Cloud?

Public cloud services have become increasingly popular in recent years, offering businesses and organizations a cost-effective solution for their IT needs. These services provide access to shared computing resources, such as processing power, storage, and applications, through the internet. This means that companies can avoid the high costs of purchasing and maintaining their own physical servers and infrastructure.

There are many benefits to using public cloud services. For starters, they offer scalability and flexibility – organizations can easily scale up or down their usage depending on their needs without having to worry about hardware limitations. Also, the public cloud often comes with a pay-per-use model, letting businesses only pay for the resources they consume. This eliminates the need for upfront investments in expensive equipment.

Another advantage of the public cloud is that it is managed by third-party providers who handle all maintenance and upgrades. This frees up valuable time and resources for businesses to focus on other important tasks instead of managing their IT infrastructure.

Types of Public Clouds

1. Infrastructure as a Service (IaaS): This type of service provides access to basic computing resources like virtual machines, storage space, networks, etc.
2. Platform as a Service (PaaS): PaaS offers developers an environment to build applications without worrying about underlying infrastructure.
3. Software as a Service (SaaS): SaaS allows users to access software applications over the internet without installing them on local devices.

Hidden Costs Associated with Public Cloud Services

While public cloud services may seem like an ideal solution due to its low initial costs and ease of use, there are hidden costs involved that businesses must consider before jumping into it blindly. These hidden costs include:

1. Bandwidth charges: As data is transferred between the business’s network and the public cloud provider’s network through the internet connection, bandwidth charges may apply depending on data usage.

2. Data transfer fees: Some cloud providers may charge shocking fees for moving data in or out of the public cloud environment.

3. Integration costs: Migrating existing systems and applications to the public cloud can be a complex process, resulting in additional integration costs.

4. Customization expenses: While public cloud services offer standardized solutions, businesses may require customizations to meet their specific needs, which can result in additional charges.

Common Misconceptions about Public Cloud Costs

When it comes to public cloud services, there are many misconceptions surrounding its costs. Many people believe that migrating to the public cloud will automatically result in significant cost savings for their business. However, this is not always the case. In fact, there are several hidden costs associated with using public cloud services that can quickly add up and end up being more expensive than expected.

One of the most common misconceptions about public cloud costs is that it is cheaper than traditional on-premise solutions. While it may seem like a cost-effective solution at first glance, there are several factors that can drive up the overall expenses of using a public cloud service. For starters, most public cloud providers charge based on usage, which means businesses may end up paying for resources they don’t need or use.

Another misconception is that moving to the public cloud will eliminate all hardware and maintenance costs. While it’s true that businesses no longer have to invest in physical servers and other hardware when using a public cloud service, there are still ongoing maintenance fees involved. Public clouds require regular updates and patches to ensure optimal performance and security. These fees can add up over time and contribute significantly to the overall cost.

Many people also assume that by moving to the public cloud, they won’t have to worry about staffing costs as everything will be managed by the provider. However, this is another misconception as businesses still need skilled IT professionals who understand how to manage and optimize their systems on the chosen platform. This means additional training or hiring of new staff members with expertise in working with specific public clouds – all of which adds up in terms of staffing costs.

Another expense often overlooked when considering a move to the public cloud is data transfer fees. When transferring large amounts of data between different regions or providers within a public cloud computing network, businesses may incur additional charges based on their usage patterns. These charges can be especially high for companies with large volumes of data or those frequently moving data between different regions.

Many businesses assume that public cloud services come with built-in security features and do not require additional investments in security measures. However, this is another misconception as businesses still need to ensure the safety of their data and applications in the cloud.

Businesses may need to invest in additional security measures or hire specialized personnel to ensure sensitive data is properly protected within the public cloud environment. This may require investing in additional security tools or hiring experts to manage and monitor the cloud environment, all of which can add up to significant costs

Case Studies: Real-Life Examples of Unexpected Public Cloud Costs

1. Zynga – The gaming giant was an early adopter of public cloud services and initially saw significant cost savings compared to on-premises infrastructure. However, as their data and usage grew, so did their monthly bill from the cloud provider. They found that their initial decision to use a pay-per-use model resulted in higher costs due to fluctuating demand for their games. Additionally, they had not accounted for data transfer fees and storage costs, which further added to their unexpected expenses.

2. SmugMug – The photo-sharing website migrated to the public cloud in search of scalability and flexibility but soon discovered that these benefits came at a high cost. They found that managing multiple instances across different regions increased their monthly bill significantly. Furthermore, they also encountered difficulties in predicting and optimizing resource utilization due to complex pricing structures.

3. Netflix – As one of the largest users of Amazon Web Services (AWS), Netflix has been able to leverage its scale and negotiate better pricing with the cloud provider. However, even with these advantages, they still faced unexpected costs when expanding into new markets with different tax laws and regulations for cloud services.

4. Capital One – The financial institution was hit with a $1 million bill after inadvertently leaving test servers running in AWS over a holiday weekend when most employees were on vacation. This incident highlighted the importance of proper management and monitoring of resources in the public cloud, as idle or unused resources can quickly add up to significant costs.

These case studies show that even large organizations with extensive IT budgets can face unexpected expenses when using public cloud providers without proper planning and management strategies in place.

Furthermore, it is worth noting that these examples are just a few among many organizations that have experienced hidden or unanticipated costs in the public cloud. The reality is that every organization’s cloud usage and needs are unique, making it challenging to predict and control expenses accurately.

Save Capital with Nfina’s Hybrid Cloud Model

Compared to public cloud platforms, Nfina’s hybrid cloud solutions offer more benefits without the complexity and costs. Nfina customers save up to 50% more with Nfina’s hybrid multi-cloud solution. Data and applications can be instantly recovered in case of data loss with Nfina’s hybrid cloud data protection solutions. Any of these events can disrupt your operations entirely, with costly consequences, whether they are caused by ransomware, software or hardware failure, sabotage, natural disasters, or employee errors

According to the Beazley Breach Briefing, small and mid-sized businesses are more likely to suffer downtime and cyberattacks since they believe backups and disaster recovery are too expensive. In addition to being more effective and affordable than other options, Nfina’s hybrid cloud data protection is also easy to use and ensures you can keep your business running smoothly

With Nfina’s hybrid cloud data protection, you can recover critical data wherever it resides, whether it is on-premises or in the cloud. Making sure critical data is protected and accessible is crucial to disaster recovery. Monitoring on-premises and cloud, failover, rollback, and disaster recovery testing is all provided by Nfina-View software. Data does not need to be rebuilt or repopulated. Failure and rollback are simple single-click operations.