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6 Hidden Costs of Cloud and How to Avoid Them

Thor Olavsrud | Jan. 18, 2013
As organizations flock to the cloud—94 percent of enterprises are at least discussing cloud or cloud services—they are encountering a host of hidden costs. These costs can be avoided with a bit of planning.

It should come as no surprise at this point that organizations of all sizes are flocking to the cloud with high hopes of reducing CapEx, making OpEx more predictable, enhancing scalability, making management easier and improving disaster preparedness. In fact, here in the opening weeks of 2013, a new study by Symantec finds that 94 percent of enterprises are at least discussing cloud or cloud services, up from 75 percent a year ago. But Symantec also reports that companies that rush into cloud deployments inevitably encounter a host of hidden costs.

ReRez conducted Symantec's Avoiding the Hidden Costs of Cloud 2013 Survey from September to October 2012, gathering responses from 3,236 organizations in 29 countries--1,358 of the responses came from smaller and midsize businesses, while 1,878 came from larger enterprises.

"This is a broad, robust survey," says Dave Elliott, senior product marketing manager for Global Cloud Marketing at Symantec. "It was in planning for nine months and took two months to implement. What we found is that organizations have, in fact, actually embraced the cloud. Organizations have said, 'Yes, the cloud is a real thing. We're there.'"

But ReRez and Symantec also found that the path to the cloud is often a rocky one.

"There were a bunch of hidden costs or second-order issues that organizations are facing when they move to the cloud," Elliott says. "In their rush to the cloud, they perhaps haven't thought through all the implications of it. These second-order issues are significant, they're real, but frankly they're easy to overcome with just a little bit of planning."

The most common hidden costs are tied to rogue cloud use, complex backup and recovery, inefficient storage, compliance and eDiscovery issues and data in transit issues, according to the study.

Rogue Cloud Implementations

The survey found that 77 percent of businesses saw rogue cloud deployments last year--implementations of public cloud applications by business groups that are not managed by IT or integrated into the company's IT infrastructure. It is more common among enterprises, 83 percent of which saw rogue cloud deployments within the last year. Among the SMB respondents, 70 percent said they experienced rogue cloud deployments within the last year.

"It's not getting any better," Elliott says. "In fact, it may be getting worse. Seventy-nine percent think it's going to stay as bad as it is or get worse."

And those rogue cloud deployments often lead to issues. The survey found that 40 percent of organizations who reported rogue cloud issues experienced the exposure of confidential information as a result. More than 25 percent said they faced account takeover issues, defacement of Web properties or stolen goods or services as a result.


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