Cloud computing pricing sky high for some
Posted by: Christina Torode
CIO, cloud computing, cloud computing pricing
CIO Rich Secor decided to look into cloud computing pricing to see what all the buzz was about. Could it save his company, Health Advances LLC, some money? Could it provide better application performance?
These are the questions he set out to answer, and based on his calculations the answer was a big NO to both — at least from the point of view of an organization with fewer than 100 employees.
Health Advances provides strategic consulting service to the health care industry: project teams help pharmaceutical, biotech and medical device companies bring new products to market and help them raise capital for clinical trials and other projects. Many of its employees are scientists and project managers who rely heavily on applications such as PowerPoint to get their jobs done.
What he found was application performance would suffer if employees had to go over a WAN connection to get to the cloud provider’s infrastructure and back, versus using their own servers. Sure, a very fast Internet connection could be bought, but the cost of that connection just didn’t add up for his company.
“It came down to either the fast WAN circuits were unavailable because of our location or they were too expensive,” he said.
If you add up the time it takes employees to open and save files over a WAN to a cloud provider and the revenue lost as a result of time and productivity wasted, Secor figured it to be about a six-figure loss per year. “That’s just for a small company,” he said.
He also found a bit of false advertising when it comes to cloud computing pricing.
“What typically happens is the teaser numbers look great — then you add in options such as the storage that you would really need, and other options,” he said. “It adds up to an unreasonably high number month after month.”
As far as he’s concerned, cloud computing is on version 1.0, and he’s not impressed yet. He’s not ruling it out completely, but pricing is definitely prohibitive.
There are many companies that are tapping SaaS for a variety of applications and others using the cloud for test and development or infrastructure scale-outs.
I’m wondering what cloud computing services make sense for small and midsized organizations, and what areas are being deemed off-limits whether due to pricing, or not?
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