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Five Areas to Consider When Estimating Cloud Costs

The challenges of using multiple clouds

At the Prepare for Multi-Cloud Future panel yesterday the guys from Equinix, Redapt, RightScale and Datapipe offered great insights about the challenges of using multiple clouds. One of those is of course estimating the cost of running your application in the cloud or in multiple clouds. With that in mind I wanted to elaborate a bit more on what should you think about when doing the estimate.

Quite often you will see IT or business teams estimate the cloud costs only based on the compute power and storage that they need. One quite often overlooked component of the cloud cost is the traffic (inbound and outbound) that can become significant charge depending on your application and its architecture.

Here is the list of things you will need to consider when estimating the cloud costs for your application:

  • Compute workloads
    Those can be workloads for your front-end servers, batch processing systems, middle tier and in some cases back-end databases.
  • Storage
    Storage can be of two types: file or also called blob storage and database, which respectively can be relational, NoSQL or just table format (key/value pairs)
  • Data Transfer
    Data transfer can be inbound and outbound. Most of the cloud providers do not charge you for inbound traffic (this is traffic coming into their data center) but they charge you for outbound traffic (traffic coming out of their data center). Very common mistake when estimating the costs is not accounting for traffic between data centers - depending on the cloud provider you may or may not incur charges for such traffic.
  • Support Plans
    So far we have seen very few teams that account for the support costs when they estimate their move to the cloud. If you are big enterprise this may be included in your Enterprise Agreement but you need to make sure this is the case.
  • Other Cloud Costs
    This is the catch all bucket that may include but is not limited to additional services like diagnostics and monitoring, directory, analytics, API management etc. Most of the times those may be fixed subscription price but sometimes you should expect to have charge per transaction.

In majority of the cases you will not be able to properly estimate the costs the first time you do it. It is good to keep a check list as well as your historical costs because this can help you estimate the growth or use for other applications. RightScale's Plan For Cloud tool can be very helpful to get you started.

More Stories By Toddy Mladenov

Toddy Mladenov has more than 15 years experience in software development and technology consulting at companies like Microsoft, SAP and 3Com. Currently he is a CTO of Agitare Technologies, Inc. - a boutique consulting company that specializes in Cloud Computing and Big Data Solutions. Before Agitare Tech Toddy spent few years with PaaS startup Apprenda and more than six years working on Microsft's cloud computing platform Windows Azure, Windows Client and MSN/Windows Live. During his career at Microsoft he managed different aspects of the software development process for Windows Azure and Windows Services. He also evangelized Microsoft cloud services among open source communities like PHP and Java. In the past he developed enterprise software for German's software giant SAP and several startups in Europe, and managed the technical sales for 3Com in the Balkan region.

With his broad industry experience, international background and end-user point of view Toddy has an unique approach towards technology. He believes that technology should be develop to improve people's lives and is eager to share his knowledge in topics like cloud computing, mobile and web development.

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