Kevin Bogusch | Oracle Senior Competitive Analyst | January 24, 2024
As cloud computing continues to fuel enterprise innovation, business and technology leaders must rationalize its costs beyond the upfront capital savings on hardware and software. Organizations that diligently match their computing power to the cloud use cases they support will be able to avoid overprovisioning compute or storage capacity. Seeking out cloud providers that offer predictable pricing for networking resources will put companies in the best position to optimize their usage and manage their costs while increasing the ROI of their technology investments.
Note that we’re addressing core infrastructure—compute, storage, network. There are many, many services and functions that companies can layer on this framework that will add costs and increase complexity. To begin the journey to optimized IT, it’s best to start by understanding the foundational aspects of the cloud.
Cloud computing provides compute resources and services over the internet or a private network through an on-demand delivery model in which an organization pays a cloud provider for the use of its infrastructure and applications and for the management of the underlying cloud infrastructure.
Cloud computing is on track to reach a significant inflection point, according to IDC analysts, who predict that shared cloud infrastructure investments will surpass traditional non-cloud infrastructure spending for the first time in 2023. As more mission-critical workloads move to the cloud, the onus falls on companies to closely manage their costs through the lens of cloud economics.
This point is not lost among enterprises, which, according to the Flexera 2023 State of the Cloud Report, cited managing cloud costs as their top challenge this year, even ahead of security.
Smart technology buyers are mindful that cloud investments should generate value, not just reduce costs. That’s why fiscally responsible business leaders are prioritizing the following:
By investing in cloud services, most organizations can operate more efficiently and less expensively than they did with traditional on-premises implementations. In fact, per the 2022 Deloitte US Future of Cloud Survey Report, 88% of respondents reported positive outcomes in “increasing efficiency and agility” because of their cloud investments, while 83% cited gains in “reducing and optimizing costs.” Other advantages, such as the creation of new operational processes or workflows, mitigation of business and regulatory risk, and expansion of existing product or service revenue, also ranked highly among participants.
So how can an individual business determine how much cloud computing will cost? The answer depends on its workload and compute needs, configurations, data transfer requirements, and other factors—which means that any company will need to do its research and perform a total cost of ownership (TCO) analysis to establish a meaningful cloud cost estimate.
Baseline estimates for monthly cloud pricing on compute (virtual machine instances and Kubernetes cluster), storage, and network resources.
Most cloud providers offer workload estimator and cloud cost estimator tools to help businesses analyze and calculate cloud TCO. This analysis should include a review of various cloud provider pricing models and pricing options. For example, some providers offer a discount for a multiyear commitment or higher-volume usage. Businesses should also assess potentially unpredictable or hidden costs, such as early termination or unexpected cloud data egress fees.
Here are five important steps businesses should take to more accurately predict their cloud costs.
Moving to the cloud can offer companies many advantages, including performance benefits, process efficiencies, access to advanced technologies, and opportunities for significant cost savings over the deployment of physical servers and on-premises infrastructure. Companies around the world are tapping into the business value and savings of cloud migration in the following ways:
Before evaluating cloud providers and service offerings, businesses should prioritize their key objectives and then consider the cloud service attributes needed to achieve them. This will help narrow the provider field so companies can assess pricing and service options to check whether their TCO calculations are accurate. Areas to consider when evaluating the cloud economics of each solution include the following:
Confusing customers with complex pricing is a surefire way to scare them off. Oracle Cloud Infrastructure (OCI) offers consistent and simple cloud computing pricing with cloud infrastructure built to match the most demanding mission-critical use cases. The economics are clear.
OCI platform services can be easily purchased with Oracle Universal Credits, which can be applied to any service in any region. By purchasing enough credits, customers can qualify for volume discounts. With flexible instances, OCI customers can build cloud setups tuned specifically to their workload needs, ensuring that they don’t waste capacity they’ve paid for.
Further bolstering pricing predictability, OCI charges uniform pricing in every region, including government regions. Additionally, enterprise support is bundled into the base fees for OCI services. Finally, OCI provides customers with powerful cost management and governance tools that enable IT and finance to monitor, control, and report on cloud usage and costs for full financial accountability.
When organizations follow the principles of cloud economics, they’re able to derive maximum value from their cloud computing investments while driving down the costs associated with an on-premises environment. They also can benefit from cloud-powered performance efficiencies, more effective resource provisioning, and quicker software deployments. By using estimator tools to help calculate total cost of ownership, companies can better understand how much they could be saving—and what funds they could redirect to growth and innovation.
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How much do cloud services cost per month?
The cost for cloud services varies depending on the use case and configuration of services. Based on Oracle’s Cost Estimator, examples of the monthly cost for various cloud services include the following:
How much does a cloud setup cost?
Cloud costs are highly dependent on the compute shape and architecture of the chosen cloud setup. Organizations can fine-tune their cloud setup cost expectations using online cost estimators.
How much does cloud computing cost?
Cloud computing costs depend on how many compute, storage, and network resources are needed. Total cost of ownership (TCO) analysis of cloud computing requires an assessment of those needs, plus additional application, data, security, and integration services.
Is cloud computing more expensive?
Cloud computing enables companies to avoid many up-front capital costs associated with on-premises deployments, but long-term costs vary based on a company’s size, workload, and needs. That said, more than 8 in 10 organizations reported cost benefits after moving from on-premises to cloud infrastructure, according to the Deloitte US Future of Cloud Survey Report.
How much does it cost to move to cloud computing?
Cloud migration costs include both direct and indirect expenses, such as data transfer fees, architectural design, staff, and consulting labor for implementation, as well as hidden costs including downtime and productivity losses during the transition. Costs can range from $5,000 to $500,000 depending on workload size.
How much does a cloud server cost per month?
Cloud server cost structures vary by compute, storage, and network needs. Per Oracle, prices can start anywhere from $54 per month for a virtual machine instance featuring four AMD vCPUs and 16 GB of RAM, up to $1,734 monthly for a Kubernetes cluster with 100 vCPUs and 750 GB of RAM.
Is Google giving one 1 TB workspace for free?
A subscription to Google Workspace Individual includes 1 terabyte of cloud storage.