Controlling the cloud: How SMEs can get a handle on costs

Alex Dalglish, head of technical services at global IT services company COMPAREX, talks about steps SMEs can take to ensure they are making the most efficient and cost-effective IT decisions.

In recent years, cloud computing has democratised the business landscape. Through the cloud, SMEs now have the opportunity to use the same services as big businesses – giving them an increased degree of flexibility to respond to new opportunities quickly, and become agile businesses right from the start.

With IDC expecting spending on public cloud services to surpass $141 billion by 2019, the cloud has undoubtedly unseated traditional IT business practices, increasing agility while also reducing expenditure. However, cloud adoption is a decision with a lot of moving parts that is difficult to grasp for businesses of all size – but can be especially tricky for SMEs with small IT teams.

There are not only a multitude of vendors and services to choose from, there are also numerous different payment models, such as subscription or pay per use, making it a challenge to determine which solution is the most cost-effective.

On top of this, only 64 per cent of cloud providers publish their prices online – according to 451 Research businesses, ‘have to manually engage and negotiate with over one third of providers to get a complete view of the market’ as a result.

Whilst the transition to cloud computing provides many benefits to an SME, selecting the most suitable cloud service to suit can often be a barrier to adoption.

Cheap isn’t always cheerful

When choosing the best cloud service, SMEs need to ensure value for money if they are to benefit from the cost savings that cloud promises. One way to manage this is by purchasing a cloud subscription and paying for it ‘upfront’. However, this model could incur unnecessary expenditure if organisations fail to monitor the consumption of the services they subscribe to and end up paying for services they no longer use.

Alternatively, an SME can opt for a pay-per-use option – though this choice is not risk-free either. The danger here is that consumption may quickly outstrip forecasts and consume the entire budget in a very short space of time. When selecting a cloud service, the cheapest solution is not necessarily the best choice, especially as these options rarely offer the best value in the long run.

For example, the ‘cheapest’ cloud services are often bound by fixed long-term contracts that limit the very flexibility that initially motivated businesses’ shift to cloud computing.

It’s important that any cloud purchasing decision aligns with key business objectives – be that reduced costs, increased flexibility or a mixture of the two. If purchasing decisions are not made in this way, SMEs may end up with identical services in several clouds. To avoid this problem, IT managers should carry out an assessment of shadow IT – identifying cloud services and applications in use that have been purchased outside of the IT departments control.

Ultimately, SMEs must have full visibility of all services currently in use by employees – even in a moderately sized workforce – in order to manage cloud effectively, control costs, and reduce any potential security vulnerabilities.

Control the cloud to tame the tempest

In the post-adoption period of a new cloud service or product, tracking consumption and costs across multiple cloud environments is imperative to ensure projects don’t outstrip budget – especially considering the growing diversity of cloud environments for businesses of all sizes.

The best way to oversee usage across numerous clouds is to implement a centralised dashboard, which integrates consumption data from the necessary range of cloud providers. Modern dashboard solutions are able to show current cloud usage as well as estimate costs and deliver real-time notifications when limits are reached – helping SMEs keep an up-to-date record of their cloud environment.

For SMEs to fully reap the rewards of cloud computing, the choice of services and post-implementation management of cloud must be approached in the right way. Businesses cannot achieve their desired outcome if the selected cloud services are not fit for purpose.

Equally, if companies fail to properly manage their cloud environments, costs can spiral out of control all too soon, nullifying any savings the company sought to gain by adopting cloud in the first place. To get a firm handle on cloud costs, both now and in the future, a centralised dashboard is paramount – providing IT teams in SMEs with real-time visibility of both cloud costs and consumption.

Alex Dalglish is head of technical services at COMPAREX

Further reading on controlling the cloud

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