Reducing costs remains amongst the top reasons why organizations use public cloud services. However,when calculating the costs of public cloud services organizations need to look well beyond the license fees and billed costs.
With Cisco Cloud Consumption Services, we have worked with numerous customers to discover their public cloud usage and analyze cloud spend. At Cisco Live Milan, taking place January 26-30, we are sharing public cloud spending trends with our customers. We have found that the hidden or soft costs of public cloud services can be four to eight times higher than visible costs. These soft costs fall in three areas and includebusiness risk, network and security costs, as well as cloudoperations and integration.
#1: Cost of Avoiding Business Risk-4-5X Higher
Of the soft costs, managing business risk carries the largest price tag. We have discovered that organizations can spend four to five times more than visible public cloud costs to avoid business risk.
This number is high because organizations have not put in place vital controls to manage the business risks of cloud. To adequately manage risks, business needs to establish:
#2: Incremental Network & Security Costs -1X Higher
Network and security spending costs are also impacted by public cloud usage - typically equaling the cost of the service. Simply, with increased public cloud service usage, investments need to be made in network and security infrastructure to ensure adequate service continuity to avoid business impact. These investments could include:
#3 Cloud Operations & Integration -2X Higher
Spending on operations and integration is typically two times higher than visible cost of a public cloud service. These costs result from:
Using public cloud services can dramatically improve the way organizations work and collaborate. However, when considering the way in which the service will be implemented and funded, IT organizations need to look beyond the cost of the service and include many soft costs to help support a line of business to make the best decisions for the applications and services to drive top and bottom line outcomes. By establishing IT as a cloud service brokerage or a strategic sourcing hub for an organization, they can put in place operations and management to help address and potentially reduce these soft costs.
Cisco Cloud Consumption Services Can Help Manage Cloud Risks, Costs, Operations
Cisco Cloud Consumption Services can help organizations discover both the actual and hidden costs of cloud and establish ways to better manage the risk, costs, and operations of cloud services by helping IT teams evolve to become a enterprise cloud service broker.
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