Cloud computing refers to the process of using a network of remote servers hosted on the internet, in order to store, manage, and process data, as opposed to using a local physical server or a personal computer.
Cloud computing is just another way of backing up data, however, is associated with cost savings compared to on-premise options. In fact, evidence has shown that 51% of United Kingdom businesses believe investing in cloud computing saved their business during the pandemic, helping to reduce costs, with 60% of respondents planning to scale up their cloud computing usage that year.
Businesses may struggle with the decision to have an on-premise server or not, especially when they are starting up. However many, if not all small businesses won’t need an on-premise server thanks to the power of cloud computing. As long as you have an internet connection, you can access your software files and information anywhere and any time, without needing to be connected to wired networks.
Whether your business needs or doesn’t need a cloud server, is down to several factors, with the main factor being the maturity of your business. A small business may require, or think that they require, an on-premise server when they are first starting out. However, most often, companies who opted for on-premise servers first then decide to move to a cloud server as they begin to develop.
For a business that has intentions to scale up, cloud computing is usually recommended. It is considered easier to handle and more flexible, the only requirement being an internet connection. Furthermore, when on-premise servers can cost anywhere between £500 and £110,000 in the United Kingdom, which may not be affordable for a business when starting up.
Read on to discover how to understand and calculate cloud computing costs.
Types Of Cloud Computing
When trying to understand how much cloud computing costs, it is important to understand what cloud hosting is, and what the different types of cloud computing solutions you can opt for are. In fact, there are 4 main types of cloud computing; private cloud computing, public cloud computing, hybrid cloud computing and multi-cloud computing.
Public Clouds
Public clouds refer to a cloud environment or environments generally created from IT infrastructures not owned by the end-user. These public cloud providers include names such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud (GCP—formerly Google Cloud Platform), and more.
Private Clouds
Private clouds, on the other hand, are classified as cloud environments with the dedication to a single end-user or group of end-users, where the environment generally is managed behind that user’s firewall. Clouds become private clouds when the infrastructure is dedicated to a single customer.
Hybrid Clouds
A hybrid cloud differs slightly from the above, in which it appears as a single environment, though is created from multiple environments connected through local area networks (LANs), virtual private networks (VPNs), wide area networks (WANs) and more.
A hybrid cloud will differ depending on the requirements, with some needing to include at least 1 private cloud and 1 public cloud, 2 or more public clouds, 2 or private clouds, as well as other combinations. However, all clouds become hybrid clouds when applications can move in and out of these separated (yet unified) environments.
Multi-Clouds
Multi-clouds refer to a cloud system made up of more than 1 cloud service, from more than 1 cloud vendor. This is the most uncommon term of the four because all hybrid clouds are considered multi-clouds. However, not all multi-clouds are considered hybrid clouds, only becoming a hybrid cloud when multiple clouds are connected through LANs, VPNs, WANs and so on.
The point of a multi-cloud may be to control sensitive data, or as a backup solution. For example, for disaster recovery. Having a multi-cloud infrastructure is considered a way to improve security through diversifying cloud services. However, it opting for a multi-cloud solution can increase costs exponentially.
Types Of Cloud Computing Services
There are 4 main deployment methods for cloud computing (5 if you consider on-premise computing). These cloud computing services can be classified as; on-premise, infrastructure-as-a-service (IaaS), platform-as-a-service (Paas), and software-as-a-service (SaaS).
On-Premise Cloud Computing Services
On-premise cloud computing services use physical servers and allow you to have full control over your data, as well as the flexibility to configure your cloud computing infrastructure in a way they want it to function. A company using on-premise cloud computing has access and control over all of the hardware, network and other elements involved in cloud computing.
Full control and ownership mean you will not need to rely on or trust third parties with their data, which may be a requirement. However, as mentioned above, on-premise cloud computing can be the most expensive option based on hardware alone. Once the expertise required to manage this is hired, costs can increase even further.
Costs estimate between £500 and £110,000 based on the requirements needed. There are cost savings associated with cloud computing, however, management costs will also be involved when not opting for on-premise options. Those cloud costs will also need to be a consideration.
IaaS Cloud Computing Services
Infrastructure-as-a-service refers to cloud providers that manage the infrastructure for you. You are able to rent infrastructure to run your own software, middleware and operating systems.
Although you will have less control than on-premise, this is still a viable option, which allows for flexibility over your infrastructure in order to reduce management costs. Although you won’t have complete control over your hardware and network, you still have the ability to install and manage software and operating systems within the infrastructure.
PaaS Cloud Computing Services
Platform-as-a-service differs from the above, in which the hardware and application-software platform is managed externally by cloud providers. PaaS allows you to host your own custom applications, however, because the provider provides the infrastructure, operating system, and other services to run your applications, it means you can spend more time on other activities such as the development of your application.
PaaS also allows for scalability. If you require additional resources, you may scale up easily with this service.
SaaS Cloud Computing Services
Software-as-a-service is a service that delivers and manages software applications for you. The application is provided to the user via a hosted format, typically via a web or mobile application that users can access via a web browser.
This means you do not need to worry about running or managing anything aside from the application, including the infrastructure, operating systems and more. This cloud computing service is the easiest to manage, and it also eliminates the need to have applications installed on each local device. However, SaaS is the least flexible.
How To Estimate Cloud Computing Costs
When looking at how to calculate cloud computing costs, the price you pay will vary on your requirements. Most IT support companies will offer tailored cloud solutions, as well as different payment structures and saving plans, such as pay-as-you-go, long term contracts and pay more with less. Read on below to discover our cloud pricing comparison.
Types Of Cloud Computing Payment Methods
Pay-As-You-Go
A pay-as-you-go model will only have you paying for the resource you need, allowing flexibility and scalability. This is called on-demand pricing, or demand-based pricing, and is the standard pricing model used by most cloud providers. Pay-as-you-go pricing models make it easier to scale up your resources as your requirements change and evolve.
Long Term Contracts
On the other hand, committing to a fixed price contract, let’s say 1-3 years, could have you saving a considerable amount – at a small sacrifice of flexibility, however, scalability will still be easily achievable. These long time contracts offer a discounted price for committing. Save when you commit pricing models also usually have multiple payment options, such as paying it all upfront at a further discount.
On the other hand, there is the partial upfront option which will have a smaller discount, and lastly the no upfront option, which just requires your monthly/bi-monthly commitment. However, as expected, the discount on your cloud costs for the no upfront option will be the lowest.
Pay More With Less
The pay more with less option, is based on the pricing principle that you will be charged a discounted price as you increase your usage. In other words, the more you use a service, the more you reduce costs and the less you pay. This pricing plan is useful for companies that plan to scale up.
How Much Does Cloud Computing Cost?
As stated before, the price will vary depending on the requirements. Although we can give you a general idea, it is more accurate to speak to an IT support company as they can tailor a plan to your needs. Because of the different payment structures, and depending on the business needs, it’s difficult to pinpoint an exact cost. Cloud providers could range from £2 to £800 a month, not including management fees.
How Much Money Does Cloud Computing Save?
Cost Benefits Of Cloud Computing
There is a large cost-benefit associated with cloud computing, in particular, based on hardware responsibilities. If your company is using on-premise, physical servers, if it decides to fail, the operational costs can become exceptionally high.
However, if virtual machines, servers, or even entire data centres go down, the responsibility (and cost) lies with your cloud provider. You, as a business, should be able to carry on as usual.
Furthermore, the running and management costs become a lot cheaper on the cloud, compared to on-premise computing. This is due to the pricing models stated above, such as PAYG, and long term contracts.
Should I Move To Cloud Computing?
If you are a business trying to scale up, the answer is probably yes. More and more businesses are moving their business activities to the cloud, and utilising cloud resources for their many benefits. The main reasons are:
Efficiency
Compared to traditional on-premise computing, you are able to take advantage of economies of scale. Cloud computing providers greater efficiency due to the sharing of resources across customers, as well as them having the latest in development technology.
Furthermore, traditional hosting may be more expensive – a high-quality, high-computing server could cost you up to £8000 alone without factoring in maintenance costs that could multiply that by up to 5 times. With what might seem like a one-off cost, and cheaper in the long run, traditional hosting could actually be costing you up to £40,000 a year.
Ease Of Use
Using a cloud computing solution requires minimal effort from the business, and increases depending on the type of solution you use. You can completely eradicate the management and maintenance required with traditional infrastructure.
Accessibility
It is extremely easy and straightforward to access the cloud and cloud-based applications. As said before, all you need is an internet connection, and you can store, manage, and process data.
Capacity
The cloud, unlike your on-premise server, is essentially infinite in size, meaning you never need to worry about running out of space and resources. With pay-as-you-go models, you only need to pay for what you use, so you don’t need to worry about wasted resources either.
How Can GRIT Consultancy Help You With Your Server?
Whether you opt for an on-premise or a cloud hosting solution, installing and managing it can be both challenging and time-consuming. Furthermore, keeping it safe against cybercriminals is a definite must, however, defending against cyber threats can be extremely challenging without a dedicated team with years of technical expertise.
At GRIT Consultancy, we provide secure private cloud hosting. In fact, your security is our top priority, meaning we only work with a cloud provider that’s Cyber Essentials Plus, ISO 9001 and 27001 accredited.
We offer affordable, flexible support packages to suit the needs of any business, both big and small, and can use our years of industry experience to build or consult you when creating your IT infrastructure.
Get in contact today.
