No Magic Clouds: How to Plan for the Greatest Cloud Cost Efficiency

Matt Tuttle


Why does an enterprise move to the cloud? Companies give no shortage of reasons, but saving money is always near the top:

  • To “drive cost efficiency” was the No. 1 way respondents to last year’s annual KPMG survey said they were using cloud to transform their business.
  • A combined 50% of respondents in a 2015 survey by Dimensional Research said reducing overall costs and improving IT efficiency were the most attractive benefits about moving to the cloud.
  • About 40% of respondents in Rightscale’s 2015 “State of the Cloud Report” named cost savings as a key cloud benefit.

But what can a business do to ensure that moving to the cloud actually saves money, rather than causes IT spending to soar?

The reality is that the enterprise needs to account for significant costs related to cloud migration, implementation, security and residency in a public cloud. There’s no such thing as a magic cloud. Companies must have solid business reasons to consider cloud, and must have a well-planned and well- architected cloud migration.

Cloud everywhere

The fact that cloud adoption has become so widespread is proof the industry has cleared various barriers that have long held people back (e.g., worries about security, performance and compliance). Historically slow adopters like the enterprise and government are going full-bore on cloud, and that’s pushing everyone forward.

But companies that haven’t fully thought out why they are moving to the cloud, or devised a plan to re-envision their applications and services for the cloud, are seeing cloud costs spiral out of control. Here are some of the leading mistakes that inflate costs and derail cloud initiatives:

  • executing full “lift and shift” projects to the cloud, versus implementing a hybrid design that keeps appropriate functions on premise
  • failure to account for licensing terms
  • absence of a management plan for post-migration

Of course, before an enterprise can achieve cost efficiency in the cloud, it also must ensure data security, and that comes with its own challenges. The most common security problem in the cloud is the customer’s assumption that since the platform is “hosting” apps and data, then the cloud service provider is also responsible for security. That’s not 100% true. Cloud service providers offer an amazing variety of building blocks and services, but security of their own infrastructures, secure design and data protection of enterprise assets are on the customer. Understanding these “security parameters” between cloud providers and the enterprise is critical, and companies must use every tool available to create dynamic and secure applications.

Solving business challenges

Since the cloud is a relatively new approach for enterprises, many paths can lead to errors. Equinix and Nimbo professional services (recently acquired by Equinix) are busy these days helping enterprises avoid pitfalls and fully exploit the cloud’s cost efficiencies and other benefits. For instance, we have the Equinix Cloud Exchange, which offers flexibility and control when migrating apps and services to the cloud, as well as the ability to provision interconnections to the cloud in the most cost-effective manner. We also have the benefit of knowing how other customers have handled a variety of issues. We map these solutions to the challenges customers are experiencing to create custom, yet proven, cloud solutions.

We never forget that we aren’t really solving “cloud challenges” – ultimately, we’re solving IT or business challenges. We’re always going to take the approach that ensures the customer gets exactly what they need from the cloud, even if that means taking things a little slower and integrating cloud more naturally, and without the complications that can come with an “all-in” approach. It’s a pragmatic attitude, and it helps customers design secure cloud infrastructures that truly deliver the cost benefits they’re counting on.