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Cloud Solutions: This Gives Companies More Cost Transparency

Digitization without the use of cloud solutions is hardly conceivable today. The service now includes almost all business areas and contributes to the company’s added value. However, the following aspects should be considered to keep an eye on the variable costs.

The current figures show how widespread cloud solutions are already in companies in various setups. According to a 2021 study by techConsult, a quarter of those surveyed already use multi-cloud configurations. Hybrid clouds also achieve a similar value (24 per cent). Private cloud-only setups are currently still at 37 per cent. However, the gap with the other cloud models is shrinking continuously. We are currently experiencing a great rush to the various cloud solutions. And it seems like cloud-first is becoming the norm in enterprises.

Increasing Trust In Cloud Solutions

This development is not surprising. After all, the cloud forms the foundation for Industry 4.0 and its innovations. For example, system failure safety through predictive maintenance approaches is part of this. It also allows agile and flexible data processing. According to the IT market analysts from techConsult, trust in cloud solutions is also growing. Around 76 per cent of all IT managers surveyed state that they outsource business-critical applications such as ERP or CRM systems in whole or in part to a public cloud.

The most frequently mentioned advantages of integrating cloud services include “transparency and control of capacities”. Also, “Cost reduction through automatic resource allocation and utilization”. So far, so good! But even if cloud technology brings enormous advantages in most cases. It should always be borne in mind that these benefits will not come by themselves, and those migrating workloads or managing them in the cloud pose significant challenges. In this context, efficiency gains or possible cost savings can be seen concerning the costs incurred for cloud use.

Cloud Solutions Must Meet These Requirements

Depending on the area of ​​application of the IT infrastructure and the business model, companies need different cloud solutions. If these include, for example, machine learning and big data analytics, in which users need to use predictive maintenance models, the approach differs fundamentally from other approaches. Such as storing sensitive customer and business data. Therefore, mapping the IT landscape and the challenges and opportunities is essential. This is the only way to determine which cloud structure is best suited for the company. This first assessment in the planning phase helps avoid unnecessary acquisition and usage costs.

To determine the exact use of the cloud, it is necessary to decide how specific data should be processed and how and when they are needed. An important differentiator is the “degree of warmth” of the data. The hotter the data, the more frequently it is changed, updated or accessed. Burning data, therefore, requires high-quality storage options and high-performance cloud resources that enable a high frequency of data access and response times.

Examples of hot data include live recordings from surveillance cameras and measurements of machine performance in production, which must be available on demand. In contrast, archive data, i.e. cold data, is backed up for an extended period. However, they are not crucial for the day-to-day performance of the system. High-performance and expensive storage systems are usually not required to migrate cold data to the cloud; they can be placed in object storage.

Traffic Is Not Just Traffic

But not only data storage is also a cost factor when scaling a cloud system. The capacity planning of the processes and the workload within the cloud can also cause unexpected costs. Therefore, it is advisable to regularly test the system performance and adjust cloud resources to avoid paying for unnecessary services.

But that’s not all: In addition to the costs for infrastructure components, the traffic costs, i.e. fees for the transmission of data to and from the cloud, are often underestimated in cost calculations. A distinction is made between the information of data into the cloud (cloud ingress) and the transmission of data out of the cloud (cloud egress). While there are usually small fees for cloud ingress, which can also add up, the situation is significantly different with cloud egress.

For example, the recording of a webinar is only uploaded to the cloud once, which incurs low costs. On the other hand, the company pays the related costs for the resulting traffic for each webinar call. Therefore, companies should closely look at what data the provider makes available in the cloud and how long it is available. The costs of the different providers can sometimes differ significantly.

Intelligent Management Enables Cost Savings

The aspects presented here show that the composition of cloud costs is more complex than one might think. But using cloud solutions comes with different prices. There are also ways to counteract these costs – or even reduce them. The various providers bring their respective strengths and cost structures for the individual workloads. The comparison provides an initial overview. Suppose you want to use the strengths and cost advantages of the individual providers. In that case, you can combine them via an intelligently set up and managed multi-cloud setup and thus even contribute to reducing costs.

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