Companies embrace the cloud because it offers agility, speed to market, self-service, rapid innovation, and yes, cost savings. There are plenty of cases where organizations can save money by using cloud resources, but it’s easy to focus on vendor compute and storage pricing, and forget about all the other financial components of a cloud application. See Joe Weinman’s Cloudonomics for an excellent analysis of how to assess the economic impact of using the cloud. An application can very easily cost MORE in the cloud – but that might still be just fine, since it helps the business shed some CapEx and remove servers from corporate data centers. In this post, we’ll talk about the full scope of pricing cloud applications and give you a useful perspective for assessing the overall cost.

Example application

Businesses deploy applications, not servers. A typical application is comprised of multiple servers that perform different roles. For instance, let’s consider an existing, commercial website that receives a healthy amount of traffic. It uses a load balancer to route traffic to one of multiple web servers, leverages a series of application servers for caching and business services, and uses a relational database for persistent storage.

n-tier web application

To maximize revenue and customer satisfaction, the application is replicated in another geography for availability reasons and traffic can be quickly steered to the alternate site in the case of a disaster or prolonged outage.

Cost breakdown

“Hidden costs” often bite cloud users. This is especially true for those who buy from a cloud that offers “cheap virtual cores!” but also require you to buy countless other services to assemble an enterprise-class infrastructure landscape. Let’s look at each area where it’s possible – and likely – that you will incur a charge from your cloud provider.

  *Application migration. If you are doing greenfield development in the cloud, then this won’t apply. But if you have existing applications that are moving to the cloud, there are a few migration-related costs. First, there can be a labor cost with doing virtual machine imports. Some cloud providers let you import for free, others charge you. In most cases, there is also a bandwidth charge for the transfer of virtual machine images. Finally, there’s likely a cost for storing the virtual machine image during the import process.

  *Server CPU processor. This – along with RAM –  is the number most frequently bandied about when talking about the costs of running a cloud application. Some providers let you provision the exact number of virtual CPU cores desired; others provide fixed “instance sizes” that come with a pre-defined allocation of CPUs and memory.

  *Server memory. Cloud providers are ratcheting up the amount of RAM they offer to address memory-hungry applications, caching products, and in-memory databases.

  *Server storage. There are many different types of storage (e.g. block storage, object storage, vSAN storage) and costs vary with each. Don’t forget to include the cost of storing data backups, virtual machine templates, and persistent disks that survive even after servers have been deleted.

  *Bandwidth. It’s easy to forget about bandwidth, but it’s a charge that can bite you if you’re not expecting it! You may need to factor in public bandwidth, intra-data center bandwidth, inter-data center bandwidth, CDN bandwidth, and load balancer bandwidth. Not all of these may apply, and some may not be charged by your cloud provider, but it’s important to check ahead of time. Most cloud providers use the “GB transfer” model, charging for all data transferred – and penalizing customers for bursting above their commitments. CenturyLink Cloud utilizes the 95th percentile billing method, preventing surges in traffic from grossly affecting costs.

  *Public IP addresses. Nearly every cloud provider offers a way to expose servers to the public Internet, and some charge for the use of public IP addresses. This is usually a nominal monthly charge, but one to consider for scenarios where there are dozens of Internet-facing servers.

  *Load balancing. There is often a charge to not only use a load balancer, but also for the traffic that passes through it.

  *VPN and Direct Connect. Cloud users are looking for ways to connect cloud environments to on-premises infrastructure, and vendors now offer a rich set of connectivity options. However, those options come at a cost. Depending on the choice, you could be subjected to fees for setup, operations, and bandwidth associated with these connections.

  *Firewalls. This is usually baked into each cloud provider’s native offering, but you will want to check and make sure that sophisticated firewall rules don’t come with an additional charge.

  *Server monitoring. Even those cloud servers aren’t in your data center, it doesn’t mean that you don’t need to monitor them! Depending on your monitoring needs, there can be a range of charges associated with standard and advanced monitors for each cloud server.

  *Intrusion detection.  Given that cloud servers are often accessible through the public Internet, it’s important to use a defense-in-depth approach that includes screening incoming traffic for potential attacks. CenturyLink Cloud is a bit unique in that we offer this at no cost, but you can still get this sort of protection from other vendors – but rarely for free.

  *Labor for integrating with on-premises assets. You don’t want to create silos in the cloud, and you will likely spend a non-trivial amount of time integrating with your critical applications, data, identity provider, and network. If this effort requires assistance from the cloud provider themselves, there could be a charge for that time and effort.

  *Distributed, disaster recovery environments. Applications fail, and clouds fail. If you require very high availability, you may need to duplicate your application in other geographically-dispersed cloud data centers. You could choose to keep that environment “warm” by synchronizing a data repository while keeping web/application servers offline. Or, you may choose to build a truly distributed system that leverages active infrastructure across geographies. Either way, it’s possible that you’ll incur noticeable charges for establishing replica environments.

  *Development / QA environments. Applications may run differently in the cloud than in your local data center. Hence, you could choose to provision pre-production environments in the cloud for building and running your applications.

  *System administrator labor costs. One of the wonderful things about the cloud is the widespread automation that makes it possible to provision and maintain massive server clusters without adding to your pool of system administrators. However, there are still activities that require administration. This may involve server patching and software updates, deploying new applications, and scaling the environments. Some of those activities can be automated as well, but you should factor in human costs to your cloud budget.

Places to save money

Given the various charges you may incur by moving to the cloud, how can you optimize your spend and take full advantage of what the cloud has to offer? Here are five tips:

 1. Don’t over-provision.  Gone are the days when you have to request a massive server from an internal IT department because you MAY need the extra resources in the future and don’t want to deal with the hassle of upgrading the server later. CenturyLink Cloud makes it simple to change the number of virtual CPUs, amount of RAM, or amount of storage in seconds. Only spend money on what you need right now, and only pay more when you have to scale up. In addition, don’t settle for cloud providers who force you into fixed “instance sizes” that don’t deliver the mix of vCPU/RAM/storage that your application needs. CenturyLink Cloud encourages you provision whatever combination of vCPU/RAM/storage that you want! In fact, we usually tell customers to _under-_provision to start with, and ratchet up resources as needed.

 2. Turn off idle servers. If you decide to create development or QA environments in the cloud, it’s likely that those environments will be fairly quiet over weekends. By shutting those down – and doing it automatically – you can potentially save hundreds or thousands of dollars per year.

 3. Automate mundane server management tasks. Running maintenance scripts or installing software on a cluster of servers is time consuming and tedious. CenturyLink Cloud provides an innovative Group capability that makes it possible to issue power commands, install software, and run scripts against large batches of servers.

 4. Add resource limits to prevent runaway provisioning. Elasticity is a foundational aspect of cloud computing, but it’s not a bad idea to establish resource caps. With CenturyLink Cloud for example, customers can define the maximum amount of vCPUs, memory, and storage that any one Group can consume.

 5. Carefully consider uptime requirements and disaster recovery needs. Even though the cloud makes it easier, it’s still not cheap or simple to build a globally distributed, highly available application. Evaluate whether you need cross-data center availability, or, a defined disaster recovery plan. The simplest solution for CenturyLink Cloud customers is to provision Premium block storage which provides daily snapshots and replication to an in-country data center. In the event of a disaster, CenturyLink Cloud brings up your server in an alternate data center and gets you back in business. If you want to avoid nearly any downtime, then you can architect a solution that operates across multiple data centers. To save money, you could choose to keep the alternate location offline but synchronized so that it could quickly activated if needed.

Summary

When considering all the services you need to deploy and operate enterprise-level business applications, the “cheap virtual cores!” pitch is less compelling. It’s about finding a cloud provider that offers an all-up, integrated offering that gives you the set of services you need to deploy and maintain a robust, connected infrastructure. Give CenturyLink Cloud a try and see if our innovative platform is exactly what you’re looking for!