Why hyperscale cloud breaks your budget (and what to do about it)

For many years, hyperscale cloud has promised to help businesses slash their IT operating costs. However, the reality is often very different – most find that their costs actually increase.

Your business needs the flexibility and scalability of the cloud to meet its strategic computing objectives. So, what can you do if hyperscalers cost more every time?

3 reasons hyperscalers always cost you more

Research by Gartner found that even three years after adoption, hyperscale cloud had a significantly negative ROI of -171%. According to their calculations, it takes seven years to generate a positive ROI – far too long for many small and medium sized organisations looking to create meaningful savings now.

Here’s why everything costs so much when hosting VMs in the cloud:

1. Over-specification

Despite the pay-as-you-use promises of hyperscalers when it comes to virtual machines and applications you must specify your virtual hardware requirements. But this causes problems.

First, resources are typically purchased in batches that rarely match your requirements; you must purchase eight virtual CPUs when your applications only require six for instance. Second, it is extremely unlikely your applications will ever reach these resource limits under normal conditions. This means that you invariably end up paying for resources you are not using.

2. Transaction costs

The flip side of pay-as-you-use computing is that you do pay for everything. Take object storage. You already know that you pay a price per gigabyte of data stored – but you are then charged transaction fees for every PUT, GET and LIST operation performed on your data plus a fee for bandwidth usage.

It is not easy to quantify the number of transactions up front, which is why many subscribers pay 40-60% more for their cloud storage than anticipated.

3. Essential add-ons

Replicating your on-premise environment is quite straightforward. However, many of the essential components you rely on are treated as chargeable extras. Things like network connectivity, security, monitoring and disaster recovery.

Again, these essential add-ons quickly increase cloud operating costs far beyond initial expectations.

What is the solution?

Hyperscalers will point out that many of these costs can be contained through proper re-engineering and optimisation. However, the necessary skills and experience are rare (and expensive), leaving most unable to make the required changes. This means that return on investment will remain a long game for most.

The alternative is to choose a leaner, more affordable cloud partner that employs a much fairer pricing model. Our solutions include network connectivity, backup/DR, monitoring, our security suite, and 24x7x365 support as standard. Which dramatically reduces cloud costs and shortens the time to ROI.

Best of all, these benefits are available without significantly re-engineering your systems and processes.

To learn more about avoiding the hyperscale cloud trap – and how WTL can help you build a cloud strategy that does deliver on expectations – please get in touch.

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