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Stopping the spiral: How to get to grips with your online service costs

man working from home using online services
(Image credit: Getty)

Widespread remote and hybrid working has prompted many companies to become far more reliant on online services. By either developing their own digital solutions or outsourcing services, organisations have been forced to find new ways to carry out basic day-to-day operations. 

And the uptake is still on the rise, even as many businesses aim to transition back to some degree of office-based working.  In fact, hybrid working has now become so popular amongst employees that a recent YouGov survey, commissioned by Microsoft, found that 51% of workers claim they would quit if hybrid working was taken away (opens in new tab)

Ranging from simplifying HR and recruitment, to reducing an organisation’s carbon footprint, there is an online service solution for almost every business need. However, while all of these options can be advantageous, IT managers should be careful when researching the costs and benefits associated with each service before committing to long and often costly contracts. 

But with so many different options available, where do IT experts start when choosing online services most suited to business needs?  Moreover, what are the best ways of keeping track of costs and avoiding unnecessary spending?

Here are some of the most common issues associated with online service costs that businesses should be aware of to avoid paying over the odds for something that is not proportionally beneficial to business operations.

Correctly assessing data usage

One of the most logical, yet frequently overlooked, steps a business can take to reduce online service costs is to accurately and realistically assess data usage. It may seem like a simple task: determine how much data you use and then pay for that amount. But, how do you correctly assess your business data needs?

Many organisations are paying excessive amounts for unused data, either because they are not aware of what’s needed, or due to inaccurate data usage calculations. Often, businesses find it difficult to realistically estimate user numbers and data requirements, because data usage is rarely constant - it is subject to both spikes and periods of reduced activity.

One of the first steps in reducing online service costs is to identify how your contract accounts for unexpected surges in data. One of the big selling points cloud providers (opens in new tab) often highlight is their ability to scale up and scale down capacity to meet changing data demands, but this often comes at a price. IT managers should consider if this is a cost they’re willing to pay, or a service they even need. It may be more cost-effective to employ the services of a cloud provider based on an accurate calculation of data usage.

Some other questions to consider include: does your provider offer good scalability for future growth? Is your contract flexible to accommodate changing business needs and priorities? And, is the price you are paying for your services proportional to the services you are receiving?

In short, be realistic when assessing your data requirements and evaluate alternatives - it could save money in the long run!

Are you receiving the right support?

it professionals in a server room

You pay for more than just the physical infrastructure − management of that equipment and support also factors in (Image credit: Getty)

Next, it’s important to evaluate the logistical needs of a business and ensure the correct level of support. When choosing an online service provider, you are paying for more than just the physical infrastructure − you are also paying for the management of that equipment and necessary technical support.

This can be an incredibly useful aspect of online services, but it is also where costs can begin to spiral. Similar to staying aware of data usage requirements, it is important to regularly assess service needs and compare that to what you’re paying for. It is just as valuable to identify a service you are paying for but don’t need, as it is to identify a service you are lacking.

Once you have a thorough understanding of business support needs, assess these against the contract with the provider - it is not uncommon to find that the service levels are set too high for what you realistically need. If you are paying for something you simply do not use, look into having it removed from your SLA.

Have you considered hybrid?

When the pandemic hit and many businesses rapidly went remote, on-premises storage was not an option and the majority of operations were forced to move to the cloud to enable continuity. However, now people are moving back to the office, or at least have the choice to work on-premise, the cloud is no longer the only viable data storage solution.

Although cloud computing can be an incredibly convenient tool, it can be very costly and is not an optimal environment for storing some types of files. For example, large files such as AutoCADs are much better suited to on-premise storage and can unnecessarily rack up cloud storage costs if stored off-premises.

Utilising hybrid solutions can also help maintain data sovereignty if businesses ensure their most valuable and sensitive data is stored on-premises, where you have even tighter and granular control over your security and continuity.

Is ‘always-on’ always needed?

When it comes to the cloud, one phrase you will see time and again is ‘always-on’, meaning that services are accessible at all times. It’s one of the main selling points data centre providers use to push their services. However, it’s important to take a step back and consider, does your company really need 24/7 access?

‘Always-on’ can be costly if it’s not optimised - and most businesses simply don’t have the need for this. Many employees are only online during working hours, but businesses are still paying for standby after the office closes. And these costs really do add up. It’s worth evaluating your data needs and seriously considering if ‘always-on’ is a core business requirement. If it isn’t, discuss alternatives with your cloud provider what the savings would be if you opted out of paying for standby hours.

Talk is cheap

Lastly, talk regularly to your service providers. It really does pay for IT professionals holding the budget to open an honest dialogue about expectations and needs. This way, a provider can be upfront and transparent about costs and be more in tune with your business needs to adjust services to support these. If your service provider is not happy to be flexible to meet requirements and budget, it may be time to look elsewhere.

Any reputable provider should be willing to take the time to understand your infrastructure and support needs and, if you have already got to grips with your expected data usage and maintenance requirements, you will see the difference on the bottom line.

Terry Storrar is Managing Director UK at Leaseweb (opens in new tab).

Terry Storrar
Terry Storrar

Terry is the Managing Director UK at Leaseweb - a leading Infrastructure-as-a-Service (IaaS) provider. He has brought over 20 years of experience across a range of specialised services to Leaseweb UK and has worked in managed services, cloud, hosting, implementation, and architecture. In his role at Leaseweb Terry oversees business development and operations in the UK, with particular attention to expanding the company’s cloud product portfolio.