man tempted by money on mouse trap

The savings being offered during the recent cloud computing services price wars are tempting businesses to jump ship from their current providers. But, the focus on cost alone could be dangerous. (Copyright: pressmaster / 123RF Stock Photo)

The cloud’s attractiveness increases for construction firms with each round of cuts in cloud computing costs. That can entice businesses to expand cloud presence, or switch providers, sometimes at their own peril. Even those finding cloud computing costs low enough for a first move to the cloud, must not let the price carry more weight than it’s worth.

Following 25 cloud computing price cuts in 2013 by four public cloud providers, 2014 is shaping up to be another year for deep reductions. Providers have reduced cloud computing costs between 10 percent and 65 percent so far. Some vow to go lower in bids to stay competitive and to also pass on savings they are experiencing from lower hardware costs and increased efficiencies in data centers.

Finding New Efficiencies

Cloud providers following U.S. Department of Energy guidelines have been making huge improvements in data center energy efficiency. Only about half the power used in a typical data center is spent on the equipment. The rest goes to cooling systems, backup power inefficiencies, electricity lost in transmission, and lighting. State of the art data centers now focus on high efficiency central cooling, taking advantage of free cooling, using the right sized equipment, and employing liquid cooling for racks and computers. All this efficiency cuts costs allowing the savings to be passed on to customers.

But, while AEC  enterprises might find the lower costs too tempting to ignore, they could find themselves so deep in the clouds they can’t see where they’re going. That’s partly because cloud products and pricing schemes vary so greatly from one provider to the next it’s difficult to compare services. When switching providers, the in-house costs of managing the change over can eclipse short-term savings very quickly. Switching is also more difficult because cloud provider business models aren’t clear, or change on a whim to follow the best performing markets. And, during migration to the cloud, existing resources often aren’t fully optimized for the platform, lowering efficiencies and opening the door for overspending on configuration or capacity. It also takes more time and resources to manage cloud vendors and service agreements.

SMB’s Own Challenges

Businesses have their own challenges as well. Many business owners and managers don’t really know their own IT costs, leaving them without a baseline for determining if the cloud is a good move. There is also the reality that for any business, cloud costs often continually escalate. One reason is that cloud computing resources aren’t as visible as on premise resources, so they tend to be forgotten about. In no time, use patterns for some services increase while others decline and nobody notices those in decline are actually declining out of existence. Soon, there are services interrupting efficiency and they’re hardly being used.

So, as cloud computing costs continue to free fall, it’s still important to keep them in perspective and not let them become the determiner of when and where to move resources to the cloud. Once there, using high performance tools to monitor and manage cloud resources ensures services are at the best levels.

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