By David Russell and Rick Vanover

Over the past two-plus decades, enterprises have stampeded to the cloud - in part to take advantage of the cost savings offered by cloud's CapEx and pay-as-you-go finance models. Most have benefited. But some who charged ahead without developing a strong cloud economic model that anticipates change and matches their expectations find themselves paying higher bills and scrambling to realign business strategies.

The biggest immediate fall-out from faulty cloud economic models is "bill shock." Year after year, we hear stories about tech leaders getting hit with monthly service bills 25 to 50% higher than the company had budgeted. These cases usually stem from sloppy cloud practices - leaving VMs on during nights and weekends, forgetting to cancel "zombie VMs" that departments had spun up for a short-term project, or not budgeting enough for maintenance costs.   

But that's just the start of the problem. Long after cloud emerged as an indispensable part of today's hybrid computing strategies, too many organizations aren't developing and following cloud economic models that ensure they are generating value - and not just saving a few cents on the dollar. They need to do three things: align cloud goals to business metrics, prioritize expenses based on the value of specific data, and build security into cloud economic models at the outset of an implementation with enough flexibility so they can respond to disruptive events such as ransomware strikes.

Align to business metrics

While shifts to the cloud usually generate quick savings on power and cooling costs, cloud economic models need to take more factors into account than the monthly bills paid to a provider. There is a long list of costs associated with cloud usage. Apps need to be lifted and shifted or refactored completely. People need to be trained on new programs with new duties. Failed migrations can divert attention from day-to-day tasks and delay project implementations that are essential to the business. Organizations need to plan for hidden costs and integrate them into their models.

They also need to ensure that the economics are meeting their expectations. Before entering the cloud and projecting long-term cost savings, they need to understand "the why behind the move" - why cloud will benefit the business and why it will benefit the company's long-term plans for tech. They need to ensure that the technology will meet functionality, resiliency and availability requirements.

Last, organizations need to set metrics and make sure their models are flexible enough to pull back from the cloud, if necessary. In other words, the time to consider your cloud exit strategy is before you get to the cloud. Perhaps another provider ends up offering a better rate or opening a data center in your region that becomes more favorable to you. It's like being a firefighter or a police officer: The first thing they think about when entering a potentially dangerous situation is how they can get out if they need to.

Consider Your Data Lifecycle

Some of the biggest charges associated with the cloud are in the storing and moving of data. This is an important factor to consider. The biggest pitfall many organizations face when moving to the cloud is treating all data equally - not categorizing data's lifecycle. 

Cloud providers will let you take snapshots of your data forever. This will help you achieve lock-down protection of mission-critical data that's used every day or is required to be held long term for compliance reasons. But data uses evolve, and companies need to categorize and recategorize cloud storage implementations on a regular basis. If you walk through a life cycle, you can have higher performant storage for the closest point in time, then shift data loads to much less expensive object storage, and then, when it's no longer needed for strategic tasks, to archive storage.

Build security in early

For years, organizations have considered security to be the biggest challenge they face operating in the cloud. Not anymore. For the first time in a decade, respondents in Flexera's 2023 State of the Cloud Report put a higher priority on managing their cloud spend (82%) than on security (79%). This mindset is causing some organizations to fall back to on-prem services and others to slash cloud costs. 

If organizations build security into their cloud models early, this doesn't have to be seen as a trade-off. Part of what we're seeing is a belief that you must either introduce new services to keep the business going now or stop expanding cloud projects to become more secure. By designing more holistically going forward - with security, economics and recovery in mind - organizations can avoid having to change strategies if something goes wrong.

Organizations need to enter cloud implementations with ransomware resiliency as a high priority, with security services integrated in their strategy. Security in the cloud should designed in at birth in the cloud - like a couple of shots and a blanket for a baby in a hospital.

Conclusion

Cloud has grown in popularity in part for the economic advantages it brings. But organizations need to approach cloud implementations strategically to avoid getting hit with hidden costs. By developing detailed models that help build in security at the outset and align to business priorities, they can turn cloud into a long-term differentiator that benefits their bottom line.

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ABOUT THE AUTHORS

Rick Vanover, Senior Director of Product Strategy, Veeam Software 

Rick Vanover is the Senior Director of Product Strategy for Veeam Software. Rick's IT experience includes system administration and IT management, with virtualization being the central theme of his career recently.  

Dave Russell, Vice President of Enterprise Strategy, Veeam Software 

A 30+ year veteran in the storage industry, Russell is Vice President of Enterprise Strategy, responsible for driving strategic product and go-to-market programs, spearheading industry engagement and evangelizing Veeam's vision for the Cloud Data Management at key events across the globe and working with the Executive Leadership team in accelerating the company's growth in the enterprise. Prior to Veeam, Russell held the role of Vice President and Distinguished Analyst at Gartner.