The cloud computing industry has been on a steady growth path ever since its birth. Year after year, cloud adoption gained traction and more and more companies were attracted by its benefits.
Chief among these benefits are cost savings. Cloud storage promises significant cost savings, especially when compared with on-premise storage.
For most companies, especially small businesses and community banks, on-premise infrastructure is too expensive to even consider. So they resort to cloud storage as the affordable and secure option. While cloud storage is indeed more affordable than building and managing your own infrastructure from scratch, it also comes with hidden costs.
Let’s take a close look at some of the most common hidden costs of cloud storage and at how you can avoid them.
4 Hidden Costs of Cloud Storage
1. Capacity Costs and Rigid Scalability
Cloud storage advertisements tout low prices, but it’s important to know that, oftentimes, these attractive price tags only apply to the first storage tier, the one that offers the “smallest” space. Of course, you can always upgrade, but your costs will change.
Scalability is another major selling point of cloud storage—you can move to a new storage and price tier when your business grows. Similarly, you can downsize when you want to cut back on costs.
But most of these pricing tiers are fixed. You can, for instance, upgrade from 512GB to 1TB. What happens if you only need 600GB, though? You’ll be paying for storage you don’t actually use.
2. Peak Hour Fees
If you’ve seen a cloud storage offer that sounds too good to be true, it probably is. This is why it’s important you always read the fine print.
One common hidden fee applies to peak hours. If you access or transfer your data during those hours—usually standard business hours—you will likely pay above and beyond the initial attractive price tag promised.
Virtual servers are invisible, so cloud providers base their pricing strategy on the (correct) assumption that it’s in human nature to never turn them off. Take a classic application, like a CRM, for instance. Ideally, you would only be using it for eight hours, during the normal operating time of your office.
But running that application requires a host of additional systems like authentication, firewall, and others that need to be powered on before the employees have to use the CRM. This adds another hour or two to your bill.
Remote workers may need to log in at all hours, especially if you run a business in multiple time zones. Pretty soon, you’ll be wondering why you should bother turning it off at all. And, of course, you’ll be paying for round-the-clock usage.
3. Storage Alone Is Not Enough
When you buy cloud storage, you buy an empty house. Sure, you can live in it as it is, but there’s no backsplash, no furniture, no heating or cooling, and no locks on the door. You need to invest some more to make it safe and comfortable to love it.
Similarly, cheap cloud storage packages come with little security. The only type of security offered is for the data center itself, so all the inhabitants must buy, install, and manage their own “locks.” If something breaks, there is no dedicated support and maintenance team readily (or quickly) available, so you’ll be on your own for a while. “A while” may mean a lot of disruption to your business and a lot of money lost.
4. Buyer Lock-In
Buyer lock-in comes with more trouble than added costs. A common hidden fee is the “egress cost,” a hefty cost you may have to pay to get your data transferred from one cloud provider to another.
Moving your data from one provider to another is a huge pain. You often have to rewrite scripts and test dependencies, which translates into a lot of manhours that can cost more than the savings from the move.
This is why a lot of cloud storage buyers are locked in. In the end, it’s often cheaper to put up with a sub-par cloud storage service than to move to a better provider. It’s like the 2-year cellular contract—you get a great deal when you join, but it’s painful to leave.
How can you avoid these hidden fees?
In two ways: you can read the fine print (yes, all of it, terms and conditions included) or you can opt for the better, truly scalable solution: data center colocation.
How does colocation compare with cloud hosting?
Check out the main differences and benefits in our comparison guide.
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Why Choose Colocation over Cloud Storage?
Briefly put, colocation means renting space in a data center to host your own hardware infrastructure. It has the same advantages of cloud storage (you don’t have to create and manage your on-premise infrastructure and you can scale up and down), but it comes with more cost predictability.
You don’t have to worry about hidden fees or paying if you use the servers more than usual. Scalability is also much easier and you literally pay for the space—rack space—you use.
One of the benefits HTDC clients love the most is the fact the colocation in our facility comes with an expert team—humans you can actually talk to when you have a question or issue. There are no hidden fees, no unpleasant surprises, and you can trust your digital assets in our SOC 2-certified data center.
Want to tour our facility or learn more about how colocation can help your business? Get in touch with us!