Don’t be duped by cloud providers

Low cost has always been one of the cloud’s most attractive prospects. However, the significant rise in energy bills, inflation, and chip scarcity has seen many large cloud vendors increase their costs – with some analysts predicting public cloud prices to rise by 30% in 2024. 

Startups need to make sure they understand what investments they’re making, especially since a more expensive service may not equal increased benefits. That’s because, in our experience, to keep cloud services at a low cost we see many clients of cloud vendors overpopulating the number of users per cloud instance. This leads to overprovisioned hardware, which negatively impacts performance.  

Despite these issues, we’re not saying abandon the cloud altogether and move back to on-prem solutions. Instead, startups should be more thorough in their examination of hosted solutions to gain greater transparency on what cloud services have to offer. 

So, what should startups look out for when it comes to identifying the best long-term cloud investment for their needs?

The myths of ‘low cost’ and 100% uptime 

First, we need to understand why cloud vendors have this low-cost perception… Beneath its perceived unlimited potential, cloud infrastructure is hardware, cables and switches, and a lot of it. Indeed, a significant amount of equipment is required to run cloud services on a large scale. 

As a result, many of the big vendors tend to charge customers based on usage – to get the most value out of their infrastructure investment. If ever you see this being marketed upfront as being low-cost, with listed advantages such as unlimited scale-up potential, it is most definitely misleading. The cost of usage quickly adds up and all of a sudden is far more expensive than expected. This is especially true in professions that use demanding software such as graphic designers and architects.

It would also be natural to assume that if you pay premium rates, that this translates into premium performance. But this is far from the case. The extensive and technical nature of the infrastructure that underlines services such as Microsoft Azure means that when downtime happens, it is much harder for engineers to identify the cause, leading to significantly more downtime.

How should startups approach cloud vendors?

Despite the shortcomings of big cloud services, startups shouldn’t cut their losses and move to on-prem infrastructure as a solution. This doesn’t power hybrid or remote working. Instead, it’s about doing your due diligence to fully understand what hosted services you are buying, to make sure you’re not locked into spiralling bills. 

Before moving to cloud infrastructure, ask yourself the following: 

  • Is the performance level a good return on investment? 
  • Will this service ensure adequate data resiliency? 
  • How much will it cost, and are there better value cloud services out there?
  • How strong is the overall return on investment? Not just in terms of cost, but how does it serve our KPIs and goals, has it offered us an appropriate level of flexibility?  

Transparency is the golden rule

Startups have less of a safety net for when investments don’t go to plan, which is why it's so important to understand how the cloud will impact performance and cost. Ask the right questions and properly analyse each service so you can prevent any issues further down the line.