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How to More Efficiently Predict Cloud Costs

How to More Efficiently Predict Cloud Costs

There is no denying the versatility that technology like the cloud can provide, but it often comes with hidden costs that might affect its cost-to-benefit ratio for your organization. Here are some of these hidden costs, as well as what you can do to minimize the impact they have on your bottom line.

Some of these different expenses may impact the fees associated with the cloud provider, while others might affect your ability to implement a cloud and host it yourself. Let’s take a look at these costs to see what your options are.

How Does a Cloud Provider Set Fees?

It helps to have a baseline understanding of how a provider sets its fees. They are based on the three primary costs of a cloud service provider:

  • Computing Costs – How much has the provider invested in the hardware needed to maintain their cloud, as well as the operating system running on that hardware? Based on the client company’s usage, the cloud provider will need to have the appropriate hardware.
  • Networking Costs – In addition to the investment into the hardware that builds up its network, a cloud provider also needs to maintain it over time. This will incur costs over time.
  • Storage Costs – Finally, the cloud provider also needs to cover their own operational costs, in terms of the storage media needed to support their clients’ needs, while also expanding their existing storage to meet their clients’ demands.

While this might seem like a lot to take in, it’s important to consider what your own on-premises infrastructure might cost. There are the capital costs to acquire the required equipment and licenses, as well as the