With Rising Costs, Is The Cloud Still Worth It?
Frederik Bussler

Frederik Bussler

April 25, 2022 · 3 min read

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Once the shiny new toy of the tech world, the cloud now comes with a hefty price tag that's putting companies off. Google Cloud Platform (GCP) recently increased prices again, doubling prices for some of its services. And other providers are likely to follow suit.

For companies that are heavily reliant on the cloud, this could be devastating. Not only are some cloud-reliant businesses at risk of bankruptcy, but they're also facing unexpected bills that could run into the tens of thousands of dollars. One small mobile app startup burned $72,000 after testing GCP.

In response, many companies are migrating their applications out of the cloud. Dropbox is one high-profile example. But there are benefits to staying in the cloud – if you have the right strategy.

Cloud Can Be Cost-Effective

With the right strategy, cloud can actually be cheap. If you take advantage of the many deals and discounts that are available, you can keep your costs down. For example, Amazon's Reserved Instances can save you over 50% on your AWS bill.

However, these RIs lock you into a one or three-year contract, so you need to be sure that you'll continue to use the same amount of compute power over that time period. If your needs change, you could end up paying more than you would have without the RIs.

That's a major blocker for many companies who want to stay flexible and be able to adapt their cloud usage quickly. Usage.AI overcomes this with an automated RI marketplace and a flex, no-commitment plan. One firm, FYX Gaming, recently slashed their AWS EC2 spend by 50% using Usage.AI.

FYX Gaming runs the most-played game on the BSV blockchain, CryptoFights. With a surging membership of over 50,000 players and a daily on-chain transaction volume in the millions, they need a lot of compute power.

Without Usage.AI, FYX Gaming would have had to wait weeks in between messages with an account manager. The whole process could take months. Even then, they would only be able to get one or three-year RIs, with no flexibility to change their usage if their needs went up or down.

Today, with Usage.AI, FYX Gaming benefits from immense savings through three-year no-upfront RIs. But if their needs go up or down, they can quickly and easily switch to on-demand instances with no long-term commitment.

Improving Capabilities

In addition to cost, there are other important considerations when deciding whether to stay in the cloud. One is the capabilities of the cloud. With the rise of AI and ML, the cloud has become essential for companies that want to stay competitive.

The cloud provides access to powerful resources that would be prohibitively expensive for most companies to buy themselves. For example, Amazon AWS provides access to NVIDIA's Tesla V100 GPUs, which are the first GPUs to break the 100 teraFLOPS barrier. That kind of processing power is necessary for state-of-the-art AI and machine learning applications.

Additionally, the cloud provides access to vast amounts of data that can be used to train AI and ML models. Many companies are now using the cloud to store and process data that would be too expensive or difficult to manage on their own.

Moreover, the cloud offers a level of agility and flexibility that is difficult to match with on-premise infrastructure. Companies can quickly spin up new resources when they need them and easily scale their applications to meet changing demands.

The cloud has become essential for companies that want to stay competitive in the age of AI and ML. The cloud provides access to powerful resources, vast amounts of data, and the agility and flexibility that are necessary to meet the demands of today's businesses.

Reducing Time to Market

Another key consideration is time to market. With the cloud, you can launch new products and services much faster than you could if you were relying on on-premise infrastructure.

One reason for this is that the cloud enables dynamic scalability. If you have an on-premise infrastructure, you need to provision for the maximum amount of traffic you anticipate. This often results in wasted capacity and higher costs. With the cloud, you can start small and scale up quickly as demand increases.

Another reason the cloud reduces time to market is that it increases innovation capacity. With on-premise infrastructure, IT is often the bottleneck. They’re the ones who have to provision and manage the servers, storage, and networking. This can slow down the introduction of new products and features.

In the cloud, developers can provision resources on their own without having to go through IT. This increases agility and speeds up time to market.

The cloud also provides access to a wide range of services that can be easily integrated into your applications. This reduces the need for custom development and speeds up time to market even further.

Further, by reducing CapEx, businesses can shift resources to truly strategic initiatives that drive competitive advantage and generate new revenue streams. Moreover, leveraging the cloud improves employee mobility and collaboration, as teams can access apps and data from anywhere, on any device.

So, if you’re looking to reduce time to market, the cloud is definitely the way to go.

Boosting customer satisfaction

There's also the issue of customer satisfaction. If you're able to provide a better experience to your customers by using the cloud, then that's another good reason to stay in the cloud.

For example, if you're able to offer real-time customer support or faster delivery times, then that's going to boost customer satisfaction. And that could lead to more sales and more loyalty from your customers.

In fact, research has shown that there is a strong correlation between customer satisfaction and cloud use. For one, IT infrastructure influences customer satisfaction significantly. In other words, if your website or app is up and running smoothly, your customers are more likely to be satisfied.

In addition, the IT knowledge of human resources also significantly influences customer satisfaction. In other words, if your employees are able to quickly solve customer problems, that's going to lead to a better experience for everyone involved.

Making the Decision

So, those are some of the key considerations when deciding whether to stay in the cloud. Cost is obviously important, but it's not the only factor to consider. The capabilities of the cloud, the time to market, and customer satisfaction are all important factors as well.

The decision of whether to stay in the cloud or move back on-premise is a complex one. But if you take into account all the factors involved, you should be able to make the right decision for your business.

With Usage.AI, cost becomes a thing of the past for startups and enterprises alike. By buying and selling Reserved Instances in the cloud on a real-time basis, businesses can cut their AWS costs by over 50%. But, as we've seen, cost is not the only factor to consider when deciding whether to stay in the cloud or move back on-premise. The cloud has certain advantages that make it worth considering, despite the rising costs.


The Author

Frederik BusslerContent Marketer
Frederik Bussler
Content Marketer

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Frederik is a content marketing consultant with experience across startup, mid-market, and enterprise companies, helping them to develop and execute long-term content strategies.

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