The cloud isn’t just a buzzword of technology. It’s one of the backbones of modern business, promising unlimited scalability, adaptable costs, and lightning-fast time-to-market. Companies large and small flocked to it, eager to offload workloads into the digital ether. But a decade into the cloud revolution, the gloss is wearing thin. Surprise bills, ironclad contracts, and high egress costs turn cloud dreams into nightmares.
Even giants like Apple and Netflix aren’t immune. A few years ago, Apple shelled out a jaw-dropping $50 million to pull data from the cloud, while Netflix faced a $15 million hit. Even as some of the top cloud vendors are starting to waive cloud egress fees, there are still enough hidden costs to be concerned.
So, what’s lurking in the cloud, and how did we get here? More importantly, how are companies navigating this minefield and staying agile while protecting the bottom line? Let’s dive in.
Elasticity, Not So Elastic
Autoscaling – adjusting cloud resources up or down based on real-time demand to ensure optimal performance and cost-efficiency – is one of the cloud’s big promises. But here’s the catch: It doesn’t consistently deliver the expected flexibility. Some cloud vendors lock you into an “elasticity window” from the start, meaning the range in which you can expand, or contract computer processing, memory, and storage capacity is predefined by their needs instead of yours. As your bandwidth needs change, such limitations can become headaches your business cannot afford.
Discounts with a Twist
Have you ever bought five avocados because they were on-sale, only to watch three quickly rot on your counter? Cloud storage discounts work the same way. Vendors lure you in with bulk deals, offering seemingly attractive prices. But you might buy more capacity than you need, locking yourself into a vendor relationship that’s hard to escape.
Egress Fees: The Silent Budget Killer
Moving data out of the cloud isn’t as simple as it seems. Data egress fees can catch you off guard. It’s not just about active downloads; background processes and applications can silently rack up costs, too.
Facing regulatory and market pressure, some major cloud providers are easing these fees. But don’t get comfortable. Critics warn the moves won’t help everyone, the data types that can be moved might be limited, and extracting data will be time-consuming.
The Cloud Conundrum
The more businesses rely on the cloud, the more they realize its double-edged nature. Initially, cloud architecture lets you scale like a rocket. But as usage grows, so do the costs, squeezing margins until they’re almost non-existent. A December 2023 Forrester Consulting study, commissioned by Boomi, found 72% of global companies exceeded their set cloud budgets in the previous fiscal year. The report said that spending on public cloud is expected to reach more than $1 trillion globally by 2026, so the stakes are high for improving cloud cost management and optimization (CCMO) strategies.
As bills have spiraled, a corporate rebellion against cloud computing has emerged. Some, like 37signals, have even trumpeted the millions of dollars they expect to save by exiting the cloud altogether. But repatriating data in this way isn’t a magic bullet and isn’t for everyone. Indeed, in many cases, it’s an unnecessary, if not slow, challenging, and costly, overreaction to public cloud drawbacks.
That’s why many organizations are choosing hybrid cloud strategies instead. For them, it’s all about balancing the best of both worlds to stay agile without breaking the bank.
Hybrid IT: The Smart Play
Hybrid IT blends public, private, and on-premise infrastructure into one seamless, cost-effective ecosystem. It’s gaining traction because it lets businesses scale operations efficiently, tap into new markets quickly, and adapt to changing landscapes without hemorrhaging cash.
By adopting a hybrid model, companies can slash capital expenditures and reduce the costs associated with heavy public cloud use. The result? Leaner expenses, more financial wiggle room, and easier to predict and manage costs.
Built for the Agile Enterprise
Enter Centersquare. We consider ourselves cloud adjacent, which means we recognize there will always be workloads best suited for public cloud. We also know many of our customers have over-extended their environments and are looking for a way to optimize their approach.
We offer the best of both worlds, combining the flexibility and capabilities of the cloud with the control of an on-premise solution. Our offer traditional colocation services with unmatched available space and power give our customers an edge on growth, while our software-defined platform gives businesses the power to deploy and scale network, storage, and compute services on-demand through our value-driven ecosystem. Provisioning in days, versus weeks or months, gives our customers the agility and flexibility they need. Additionally, our platform enables customers to effortlessly scale as needed, ensuring costs remain manageable and predictable. This allows you to focus on growth without unexpected surprises. Ready to rethink your cloud strategy? Contact our Sales team at sales@centersquaredc.com and discover how our hybrid cloud offerings can give your business the competitive edge it needs.