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Reducing cloud storage costs: what you need to know

(Image credit: Image source: Shutterstock/bluebay)

The pandemic has fast tracked digital transformation for many businesses that now find themselves in a predominantly online environment. The proliferation of new technologies that enable agility and flexibility has left many businesses wondering how they can reap the benefits without racking up exorbitant costs. So, what are the key cost elements of cloud storage and how do companies mitigate unwanted costs?

Not all cloud solutions are created equal. While those focussed on the bottom line may look for the lowest priced option, there is a risk of both hidden costs and disappointing results. Due diligence may seem a cliché, but in matters of data and IP it is absolutely vital that businesses pay close attention to who is managing it, where and how.  Decision makers must question where their data will be stored and how many copies of that data exists across multiple locations, geographies and devices. Similarly, they need to consider the financial and reputational impact on the organization from data loss or breach.

Indeed, there are many factors to consider that affect not only cost, but also reputation and data integrity. Business must therefore have an understanding of their data and its purpose, when building a storage strategy:

  • The purpose for the storage and capacity requirement
  • Type of storage needed (block, file, object-storage)
  • Special requirements
  • Regulatory or compliance requirements
  • SLA required
  • Budget available

Key cost elements in cloud storage – and how to reduce costs

Understanding the organization’s application and data profile will ultimately inform which services will be built into the storage. Rarely is one single option chosen, as many businesses mix and match services to meet their data needs. However, businesses must understand their objectives when selecting storage options or risk unplanned expenses.

Additional costs arise if the storage isn’t tweaked or moved to more appropriate tiers once it’s no longer needed or accessed. Understanding the implicit cost elements and working to reduce them will help ease budgetary requirements, especially as financial pressure is squeezing businesses around the world. So, what are the core cost factors involved in cloud storage and how do businesses best optimize them?

1. Capacity

Capacity is normally charged per gigabyte, per month. Many factors can influence the level of capacity required, such as production data versus replication data, which has a significant impact on how storage is built. Is the storage needed for day-to-day tasks, or does the business need reliability, fault-tolerance or accessibility with snapshot or replication data? Storing obsolete data will incur costs no matter the location or capacity used by the data. All organizations should determine the importance of the data and how long this data will be critical to the business. These considerations  will help inform the lifecycle of the service.

Additionally, data and systems will need to be compliant with regulations, government policies and internal protocols, no matter where the data is sitting.

2. Transactions

Each transaction cost is largely determined by storage type. Although transactions can be minimal, costs can arise through misunderstanding the transaction profile. Movement, access, retrieval and deletion can all incur costs. By using the monitoring tools provided by suppliers to understand and identify excessive or redundant data, businesses can modify storage options to better manage costs.

3. Network connectivity

Organizations will normally have multiple workloads spread across a number of environments. Organizations must ask themselves whether they want an inexpensive public but potentially unsecure connection, or an expensive but secure private connection for their cloud data. These choices will further impact potential ingress and egress fees. It is also wise to consider if the data is consistently exiting a private or public network, or are teams mostly uploading data. Software-defined networking that follows a pay-as-you-use commercial model can help manage costs, whilst still enabling flexible and agile deployment.

4. Use the tools provided

It’s important to use the monitoring tools provided by vendors. All vendors offer robust methods and tools to monitor cloud usage either manually or automatically, and it is vital to have full visibility over the cloud storage options and usage to aid optimization. This becomes invaluable when data sits across multiple environments. Businesses must ensure monitoring tools are able to track transactions across the estate or else they risk data fragmentation, as the increased costs and complexity of access to this data could erode cloud storage’s advantages.

5. Data value vs Storage costs

For many businesses, cloud storage has become the proverbial dumping ground for data. Indeed, stretchable solutions are a quick and easy upsell for vendors. But to move at scale and with efficiency, the way businesses view data needs to drastically change. Not only are the costs and size implications of bottomless storage huge, but the data within quickly becomes untenable. Owning data is good, but data still needs to be read and understood to be of any value. Identifying what kinds of data hold value to the business – past and future – and how you use it, is the first step to gaining data value.

Gaining, storing and using data is now such a multi-faceted task, that for many only the bare minimum is possible with the resources or strategies in place. In the new world of machine learning and artificial intelligence, what unique data can businesses hold and use now and, in the future, to provide insights and advancements? What other data is being generated, and is it just noise? Data may cost businesses to retain, but it’s important to keep the right balance between financial cost and business value.

Final word

The key to unlocking the potential of cloud, whilst keeping costs down, is properly understanding the data profile of the organization. By running a fully comprehensive workload analysis, businesses can understand what their core objectives and data needs are. This will in turn enable everyone to pick the correct type of service and reduce unexpected costs or issues.

Stuart Wisdom, Senior Cloud Engineering Lead, Telstra EMEA
Gareth Puckey, Senior Solutions Sales Specialist, Telstra EMEA