7 Ways Small Businesses Can Control Cloud Computing Costs

Cloud computing (the ability to access software and applications online and on demand from anywhere rather than through fixed machines) is growing in interest around the world. This is good news for small businesses, which now have a chance to adopt the technology to improve their operations.

“According to our research, 94% of businesses are using cloud applications or other algorithms to some degree,” says Alex Hilton , former CEO of Cloud Industry Forum . “Furthermore, 88% of businesses are accelerating that adoption. So cloud computing is here and it’s here to stay.”

Here are seven steps for your business to take advantage of the latest developments without breaking the bank.

Focus on value instead of costs

When making a business case for cloud computing, it’s easy to get fixated on minimising how much you’ll spend. But it’s also important to think about maximising what you’ll get. At the same time, it’s important not to try to put concrete numbers on the value you’ll get, simply because return on investment can often be hard to measure.

“Mark Schwartz [the enterprise strategist for Amazon Web Services] has a book called The Art of Business Value that deconstructs the idea of return on investment,” says Liam Bennett , Head of Architecture and Engineering at Claranet . “Being able to articulate what business value means is almost impossible. It often comes down to the intangibles like agility or added value or something I can pass on to my customer. And so the return on investment becomes almost meaningless. Instead, it becomes more a conversation of ‘Does it add to the strategic direction.’ So, if you’re willing to spend the money to move yourself in that direction, that’s enough.”

Allocate the budget on a rolling basis

One reason that many businesses like cloud computing is because it’s easier to allocate money for it. Specifically, because the costs might be classified as operating expenses (on the income statement) instead of capital expenditure (on the balance), the conversation is less about how much a large and depreciating asset is going to cost and is more about how much an application will cost instead. But because of this, it’s important to change the timeframe in which that money is allocated.

“Organisations typically build a budget for the next year or two,” says Reza Behkishe , Commercial Director for GreenLake Cloud Services at HPE . “But when you go all operating expenses or public cloud, you have to go into a rolling budget cycle that doesn’t end. The challenges of how you manage that as an organisation will vary [so] adaptability to form a solution that fits is key.”

Keep track of users

It’s easy to sign up for a few too many cloud computing services and have the costs slowly add up over time. That’s why, if you don’t want to end up paying unnecessary licensing fees for platforms that you don’t use, it’s important to keep track of who is accessing them, how often, and for what purpose.

“Focus on making sure you’ve got a robust single sign-on solution in place,” Bennett says. “Most of these products will support your ‘joiners’ and ‘leavers’ process, and will integrate with your system. If that’s not relevant to you, or you’re not at the size or the scale where that’s cost effective to you, there are products on the market that will allow you to track those licenses against individuals.”

Put adequate controls in place

Cloud computing costs can also grow when businesses don’t have adequate governance or management protocols in place to watch out for them. Suddenly, a year or two into the process, many are shocked to realise that they’re now spending more money than they did before when they were expecting their bills to be lower.

“Most of the public cloud providers today provide a lot of services and controls that allow you to manage your cloud spend,” Bennett says. “Those techniques allow a central function to view the whole picture and, more importantly, allow teams, departments, and business units to take ownership of their costs. And once teams and individuals are given that autonomy, they start to understand the cost implications of the decisions they make.”

Be flexible in your needs

Indeed, it’s important for businesses to constantly question whether they’re still getting value out of the services they use and, if not, to cancel them or else come up with better options for using them. This is something that’s become clear during COVID-19, with many people working remotely and many organisations adopting a more flexible approach when it comes to their applications and infrastructure.

“During the pandemic, we had organisations that could spin up remote desktops and applications quickly, but we also had a big customer in the travel sector that was able to turn down the platforms as bookings dropped off,” says Sean McAvan , Managing Director for the EMEA region of Navisite . “Some had fixed legacy platforms in data centres where the cost carried on being the same while others had cloud platforms they were able to turn off.”

Adopt a hybrid approach

Although it might seem like the flexibility of cloud computing makes this the no-brainer approach, many businesses are making only partial moves to online services. Yes, there are some agile companies that are 100% cloud-based, but for many others it still makes sense to keep some legacy applications ‘in-house’ and instead adopt a mixed approach. It all comes down to balancing your personal appetite for cost and risk (for example, what happens if everything is in the cloud and the internet goes down?), which is how you can enjoy the best of both worlds.

“A hybrid strategy or a multi-cloud strategy offers you more potential outcomes and more potential avenues to deliver different workloads,” McAvan says. “But it does bring with it more complexity, and complexity can also increase risk. It can increase costs because you need engineers skilled across different platforms, you need toolsets that you can manage across different platforms, and you need the experience to deliver a holistic experience to end users across those different platforms as well. That’s why it’s good to work with partners that have made those investments and have people that have experience across those platforms.”

Use an expert

As should be clear by now, cloud computing is presents an exciting opportunity for small businesses to grow their operations. But given that the industry is constantly developing, it’s easy to feel overwhelmed. That’s why, before implementing any major changes to your operations, it’s good to work with an expert who works with cloud platforms every single day.

“Find someone that’s already done this to come and help you,” Bennett says. “You will save much more money by bringing in an expert, rather than investing people or time when it’s not your core business to try and understand what’s a complex and unique problem of managing a public cloud bill.”

Conclusion

Ultimately, to make cloud computing work for your business, you have to keep control costs at whatever level is good for your situation. If you can’t control costs, you won’t be predictable. And when it comes to cloud computing costs, predictability is key.

“We’ve seen a lot of organisations that thought of cloud computing as a great idea,” Behkishe says. “But they’ve not gone about it in the right way or controlled what’s happened and they’ve seen costs double. It doesn’t have to be that way. You must make sure all this is enabled in the right way for you to be in a position to go ahead and execute.”