Enterprises are opting for cloud due to its cost-saving capabilities and agility. The ‘pay-per-use’ model and headline costs are alluring enough to draw millions of businesses into cloud. Of course, who would not like the idea of paying just a fraction of the on-prem costs every month for each instance or server? Also, the financial appeal of moving from capital expenditure to operational expenditure is pretty hard to ignore. But there is much more than the attractive cost-saving propositions of cloud computing which, if go unnoticed, can spiral costs up and out of your control. Businesses are often hit with unexpectedly high bills at the end of the month only to realize that they have been charged for using services which they were not aware of. If that’s not enough, then they have another task of solving the utter-complex puzzle called the pricing matrix. Together, it becomes extremely difficult for the businesses to estimate the cost in advance and take the necessary steps to keep a tab on the spending.
In order to run a business successfully in a cloud-dominated world, enterprises must be cautious about the hidden costs of cloud, the first step of which is to identify the areas and we have got it covered for you. Here, we have listed down five hidden costs of cloud for you:
1. The perpetual cost of migration
Every migration, whether small or large scale, is an expensive affair. One cannot just migrate data, code, applications, and workloads without occurring any substantial expenses. But whether you are moving from an in-house cluster or your entire workload, it requires a lot of strategic planning to prevent bandwidth or network issues users might have to face otherwise. A lack of planning can also impact the integration of data and applications. In both scenarios, businesses have to invest a lot of time to fix the issues. And time is money.
Most of the time, organizations overlook the indirect costs related to integration, code, and data backup. Even the data extraction before migration is a billable task. Hence, it is important to define the entire migration process before starting the execution including renting required bandwidth or the costs of physically transporting the data. Also, do not forget to include the cost of encrypting data on the budget sheet.
2. Data Egress
When moving your data into cloud, do you consider the cost of moving your data out, or, in other words, data egress? It seems this one overlooked aspect costs companies a hefty sum. Take the example of NASA who while moving their 247 petabytes of data into AWS, data that will be regularly being downloaded by third parties/scientists, did not consider the costs for data downloads (egress). Thus resulting in cost projections much lower than the future expenses.
Data egress charges: AWS
|Data Transfer OUT From Amazon Internet||Price per GB|
|Up to 1 GB/Month||-|
|Next 40 TB/Month||$0.09|
|Next 100 TB/Month||$0.07|
|Greater than 150 TB/Month||$0.05|
Data egress charges: AWS
|Intra continental Data Transfer||Price|
|Between regions within North America
Between regions within Europe
|$0.02 per GB|
|Between regions within Asia
Between refions within Oceania
Between regions within Middle East and Africa
|$0.06 per GB|
|Between regions within South America||$0.16 per GB|
|Inter-Continental Data Transfer||Price|
|From North America to other Continents
From Europe to other Continents
|$0.05 per GB|
|From Asia to other continents
From Africa to other Continents
From Africa to other Continents
|$0.08 per GB|
|From South America to other continents||$0.16 per GB|
Data egress charges: AWS
|Egress to the same Google Cloud zone when using the internal IP addresses of the resources1||No charge|
|Egress to different Google Cloud zone in the same Google Cloud region when using the internal IP addresses1 (per GB)||$0.01|
|VM-to-VM egress when both VMs are in the same Google Cloud region, regardless of zone, when using the external IP addresses(per GB)||$0.01|
|VM-to-VM egress when both VMs are in different regions of the same network using internal or external IP addresses||See the rest of this table|
|Egress from a Google Cloud region in the US or Canada to another Google Cloud region in the US or Canada(per GB)||$0.01|
|Egress between Google Cloud regions within Europe(per GB)||$0.02|
|Egress between Google Cloud regions within Asia(per GB)||$0.05|
|Egress between Google Cloid regions within South America(per GB)||$0.08|
|Egress to a Google Cloud region on another continent (excludes Oceania)(per GB)||$0.08|
|Indonesia and Oceania to/from any Google Cloud region(Per GB)||$0.15|
To avoid such unexpected financial shock, organizations should model the data flow and calculate the data egress charges in advance. Businesses can also architect their hybrid cloud solutions in a way that will reduce the need to move out data, or, if required, then leverage cloud-based data processing services to minimize the cost.
3. Expiration of free resources, usage limits, or tiers
Just as there is no free lunch, there is no free cloud service without an expiry date. As soon as you cross that threshold, it becomes billable. Major cloud providers offer certain free services to encourage users to get acquainted with their platforms, AWS free tier or GCP and Azure’s free trial for e.g. While some of these free services remain indefinitely free (Amazon DynamoDB 25 GB of storage, Amazon Chime Basic, etc.), some are available only for 12-months (Amazon EC2 750 hours/month). Once you cross the free period or go beyond the free limits, you get charged (pay-as-you-go) for each of the resources or services used. Hence, it is crucial to be cognizant of the free limits and monitor usage regularly.
4. Retrieval of archived data
This is another area to watch out for that, if it goes unmonitored, can unnecessarily add to your cloud expenses. While archiving your less critical, stagnant business data is necessary to reduce primary consumption, retain cost-efficiency of maintaining data infra, or keep your overgrowing data on check, retrieving the same archived data can incur unplanned costs. To minimize the costs of retrieving archived data as and when necessary, businesses should take advantage of data retrieval policies offered by the cloud leaders. Amazon S3 Glacier, for example, has three policies that offers can help businesses manage their data retrieval activities across AWS account and manage the costs.
5. Data transfer
For businesses transferring large-scale data online from on-prem to cloud is a challenge in itself. Now, add to that the hefty sum of transferring data from one region to another, using the same vendor. It is like spending hours scrutinizing the cheapest location based on the price list and moving your entire workload there only to find that it comes at a staggering cost. And we are not talking about a gigabyte or two here, rather exabytes of data. As per the latest news, companies like Pinterest or Netflix have paid up to $30 million a year as data transfer fees on AWS.
To control the data transfer costs, organizations need to chalk out ways to limit outbound data and gain visibility into instances while adopting ways to keep the transfer limited to a single region or within a single availability zone.
Be Cautious and Cognizant
These hidden cloud costs might be common but can be often overlooked. All you need is the right strategy, planning, and constant monitoring to harness the benefits of cloud without jeopardizing the potential areas where you can save a huge part of your cloud costs. Take advantage of the highly effective free tools offered by leading cloud providers, such as AWS Cost Explorer or Cost Management by Azure, and experience cloud partners who can enable businesses to gain better visibility and control of cloud usage, costs, and ROIs.
Being in the cloud industry for over a decade, we at Cloud4C have come across several grey areas of the cloud ecosystem which, if identified and mitigated strategically, can save thousands of dollars. Connect with our cloud experts to gain visibility and control over your cloud spends.