The Hidden Costs of Data Transfer from Public Cloud

6th December, 2019

Cloud computing has revolutionized many aspects of IT, helping companies of all sizes to become more agile and responsive. However, the cloud can also become expensive if not closely supervised. Even though the risks of overspending on the public cloud are widely known, avoiding and minimizing unscheduled expenditure can still be tricky.  

Last year, Adobe managed to accidentally incur daily charges of $80,000 for a single computing job on Microsoft’s Azure cloud platform. Around the same time, Capital One was reconciling a 73% spike in the price it paid to use Amazon Web Service’s (AWS) cloud platform.  

Blue-chip brands like Adobe and Capital One have detailed (and generous) IT budgets, yet they were still blindsided by the unexpected costs. For smaller businesses, a sudden overspend could have tragic effects throughout the company, impacting each department. Unexpected cloud costs could prevent scheduled IT projects from taking place, hamper corporate growth, or delay much-needed service improvements.  

Even if a client knows about an issue straight away (which isn’t guaranteed), it could take time to resolve. In Adobe’s case, it was a week before anyone noticed what had happened, by which point the company had effectively wasted $500,000.  

Incomings and outgoings  

One of the leading stealth expenses faced by IT companies involves ingress and egress costs. Many users are sweet-talked by initial offers of fee-free ingress when signing up to a new host. However, this generosity may not extend to subsequent transfers of assets or data. Future uploads may involve office relocation, corporate expansion, the failure or obsolescence of legacy hardware, or simply a desire to bring every data resource into one location which may become quite costly. At the same time, egress costs add to the challenges of transferring public cloud services away from existing providers.  

It’s been estimated that almost 60% of organizations overspend on the cloud. Yet despite this, you can still enjoy the benefits of public cloud hosting without damaging your firm’s end-of-year accounts. To help you do so, we have gathered our recommendations for ensuring cloud contracts don’t come with an expensive price tag…  

1. Study the small print  

When it comes to public cloud costs, the devil is in the detail. Before signing up, investigate exactly how much you will pay for remapping IP address. Is data traffic between two hosts chargeable, even if it’s essential for data recovery and failover protection? What storage options are offered, and are there any necessary extras that could be billed separately? Complex multi-server environments are especially prone to incurring stealth charges, which erode those tempting headline rates used to attract new clients.  

2. Investigate egress costs  

Egress fees are commonly known as data transfer costs and can be brutal. In 2017, Apple paid AWS almost $50 million in data transfer fees. Cloud providers like Google and Microsoft don’t want customers to leave, so they apply egress fees to deter firms from taking their business elsewhere or bringing it in-house. These fees are rarely a secret, but few firms prioritize egress costs when negotiating a new hosting contract. Even charges of cents per gigabyte will quickly add up, especially if your firm is data-heavy.  

3. Communicate with other departments  

The accounts team may prefer a prepaid cloud package structured around the working week, but the marketing team may require evening and weekend access for home-working staff and overseas customers. Meanwhile, the IT department may explain how traffic spikes at key times of the year could lead to additional bandwidth costs. Pinterest made this mistake in 2018, paying $20 million to AWS in extra capacity charges because of unexpectedly high traffic levels in the run-up to Christmas. It’s crucial for various departments to share information before entering cloud hosting contracts, pooling their expertise to avoid mistakes or miscalculations.  

4. Investigate costs for multiple IPs  

Cloud providers may charge for using public IP addresses and costs can also tend to spiral where two-way dialogue between servers and client devices is involved, or whenever large data files (like downloadable videos) are being accessed by multiple clients.  

5. Choose a host offering clear, upfront pricing  

At THG Hosting, we ensure our customers don’t encounter surprise charges. We offer dedicated bandwidth allotment and forecasting tools to manage usage costs. Need more bandwidth? No problem. Add up to 500TB for a flat monthly rate. Our data center interface fees are upfront and well within your budget and customers utilizing THG’s DCI connections can easily move and backup data between connected centers when needed without hidden fees.  

We believe in a simpler, more effective, and honest way of managing public cloud services. Learn more today about making the most of your data storage budget today at THG Hosting.

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