04-01-21 | Blog Post

3 key considerations for your cloud TCO

Blog Posts

Everyone seems to be jumping on the cloud bandwagon these days, and no wonder. More than 75 percent of IT leaders say cloud is a “critical” part of their transformation strategy. But what is the true Total Cost of Ownership (TCO) for your cloud spend?

Otava recently hosted a webinar on cloud TCO with our friends at VMware, all about the hidden costs that can affect your total cloud spend – costs you might not even have realized existed when you first started your cloud journey! Below are a few key findings and takeaways:

  1. There are three ways to evaluate your hybrid environment: performance analysis, ROI analysis and TCO analysis. There are big differences between them!
  2. A TCO analysis is especially critical to ensure you’re performing an apples-to-apples comparison across your private and public clouds as well as your data centers.
  3. Four major considerations often overlooked when building a TCO model:
    1. Not all VMs are created equal (see below)
    2. Price versus performance
    3. Refactoring costs money and time – more than you think
    4. Migration costs and times should be considered, too

The right workload for the right cloud

It’s probably obvious by now, but cloud is the future, and the future is now. According to analyst firm Frost & Sullivan, 80 percent of IT leaders say a hybrid cloud strategy is essential to remaining competitive in their industry, and 93% of enterprises rely on multiple clouds for their business. That means multiple data centers, multiple options and multiple sets of information to keep report on and keep track of. In the end, all this clouding around begs the question: Are you running the right workloads in the right cloud and data center?

When it comes to cloud TCO, not all VMs are created equal

Just like you have multiple packages when selecting a car, there are also packages when selecting a VM to run your applications on, though it might not be obvious. Within Amazon EC2 instances alone, there are three notable examples:

VM performance in cloud TCO

As you can see, the performance levels vary widely, as does the price for each VM. So when you hear someone say, “well, I’m just running an EC2 4×16 instance, they’re all the same,” you can (politely) correct them. This leads us to our next question: When you run your TCO analysis, are you really running an apples-to-apples comparison of your workloads? It’s not fair to assume you’ll be running an EC2 T3 instance when you in fact need an MD5. Be thoughtful when building your TCO models.

Think differently when moving workloads to public cloud

Unfortunately, not all workloads will work the same way in every situation, and there could be technical blockers or limiters that organizations will need to work through and consider before putting a multi-cloud strategy in place. That’s not to say that public cloud isn’t a great option – for many workloads, it’s exactly where you want to be. But for others, you may not see the economic benefits you’d normally expect with public cloud. In order to realize the greatest cost savings you possibly can, you’ll need to account for complexities like refactoring and reworking applications, which could $1000 per VM, according to Gartner. Working with a trusted advisor before you start your multi-cloud journey (or when you’re in the very early stages) can greatly help you realize better time to market and overall ROI on your cloud investments.

Looking for a cloud that will help you reduce TCO and increase your ROI? Otava’s Gen3 cloud offers exactly the right amount of flexibility and control for all the workloads you need. With simple to use cloud services that put you in control, transparency into cost management for predictable spending and flexible consumption models that adapt to your business needs, moving to cloud has never been easier. Try it free for 30 days to check it out for yourself!

There’s so much more to learn! For more great insight and tips, check out our webinar recording in full.

Further questions, or curious to learn even more about cloud costs? We’re happy to answer your inquiries, and encourage you to check out our related posts on the right hand side of this page.

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