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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.

"By taking control of cloud deployments, companies can seize advantage of the flexibility and cost savings associated with the cloud, while minimizing the data control and security risks linked with rogue cloud use," says Francis deSouza, group president of Enterprise Products and Services at Symantec.

Cloud Backup and Recovery Issues

The survey also found that cloud complicates backup and recovery.

"Organizations are rushing to move to the cloud, but they don't think through how important backup and recovery is," Elliott says. "Sixty-one percent of respondents use three or more solutions to back up physical, virtual and cloud data. That's just really inefficient."

It leads to increased risk and training costs, he says. In addition, 43 percent of organizations say they have "lost" cloud data (47 percent of enterprises and 36 percent of SMBs) and had to recover from backups. Elliott clarifies that "lost" could mean actually lost, but it could also mean deleted or even lost or damaged by the cloud service provider. To make matters worse, 68 percent of organizations reported recovery failures when attempting recovery of data in the cloud.

That includes data that may have been recovered eventually, but not in time to meet a particular need. Twenty-two percent of organizations report that it can take three or more days to recover from a catastrophic loss of data in the cloud.

Inefficient Cloud Storage

The simplicity of provisioning storage in the cloud leads to another hidden cost, according to Elliott. One of the reasons organizations love cloud storage is that they pay only for what they use, in theory anyway. But that's true only if you work to maintain efficiency. While most organizations strive to maintain a storage utilization rate above 50 percent, cloud storage utilization is much lower: a mere 17 percent on average. Enterprises do a little better here with an average utilization rate of 26 percent, while SMBs only manage a "shockingly" low 7 percent average utilization. The problem is compounded by the fact that about half of organizations admit that little if any of their cloud data is deduplicated.

Compliance and eDiscovery Concerns

"Organizations are concerned about meeting their compliance obligations when it comes to data in the cloud," Elliott says. "Even more so, they're concerned about proving compliance as they more to the cloud. Twenty-three percent of respondents have been fined for privacy violations in the cloud. That tells me that this is a bigger problem than most people have recognized. As more and more data moves to the cloud globally, there's more and more regulation about how that data needs to be managed. As you move to the cloud, you really need to think about compliance in the context of the overall organization."


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