Throughout the last year and a half, most organizations were forced to either create or develop their online service offerings at a rapid pace. Companies had to find alternate solutions to continue day-to-day operations in the transition to remote-first. Low development costs and the wide range of use cases have been primary factors in the continued rise of online services even as enterprises look to move back to the office.
Although the initial development costs are affordable to most global organizations, maintaining those workloads—such as internal self-service or software-as-a-service (SaaS) platforms—is a different story. Many enterprises fall victim to paying unnecessary expenses to keep their online services operating. When calculating the costs of these services, organizations often leave the costs of managing hardware out. In the event they are included, the cost breakdown is not typically accurate.
When transitioning to or enhancing online services, calculating the correct costs can be overwhelming. To avoid overpaying, companies need to properly assess the operational costs of their online services. Here’s how.
Evaluate the Infrastructure
First, determine what type of infrastructure fits best for the online offering or service. A popular trend is the “always-on” model, and with good reason. The success of online streaming services and high-availability digital workspaces encouraged enterprises to adopt this method.
However, it is important to note that these companies are successful with this type of business model because it fits best with their overall product and services offerings. Many organizations cannot thrive in an always-on style because they simply do not need to be always-on. After all, not every service needs to be available 24 hours a day.
If the online service is only needed during typical ‘office hours’ but can remain on standby after closing, the organization still needs to pay for those idle hours. These costs add up and can make for an unpleasant surprise when they show up on the monthly bill. Determine what the cost of using an always-on service will be for the organization before committing to it and weigh if it is necessary. Many times, an always-on service is not needed, and an alternate approach will do just fine.
Pay for What you Need
The more users on a particular platform, the more data is used. Estimating the accurate amount of data use is a vital step in being cost-efficient. In many cases, organizations pay more than the necessary amount because of inaccurate calculations about how much data will be used. It is vital to assess data use regularly to make sure that customers have what they need without the business breaking the bank.
Saving money does not have to equal a poor quality of service. When paying for online services with an infrastructure-as-a-service (IaaS) provider, a business is paying for more than just a place to host its platform. IaaS providers also provide varying levels of support, allowing for organizations to take advantage of additional services at no extra cost. By partnering with an IaaS provider, an organization can experience speed, reliability and security without blowing the budget.
Assess if the Cloud is the Best Fit
A common misconception is that online services are fully maintained in the cloud; however, that is not always the case. Building and testing services may require some operations take place in an on-premises location. An organization needs to evaluate whether on-premises is more cost-effective than developing its service in the cloud. Along with the potential for cost-effectiveness, on-premises solutions can sometimes prove to be more secure. Choosing on-premises or even a hybrid model for highly sensitive data may provide tighter security control.
Maintaining a service in the cloud can potentially transform an online business by offering flexible, scalable and cost-effective solutions. A scalable infrastructure becomes an imperative for a growing business, and with the cloud, services and consumption can grow as the business does. However, organizations need to consider their business requirements and see if their deployment decisions match the requirements for cloud or on-premises.
Evaluate your Total Cost
Providers often give a basic estimate of total expenses, but it is always helpful to ask for your total cost of ownership. Looking at the total cost of ownership ensures clarity between the organization and the service provider. Overall, the most crucial best practice for avoiding unnecessary costs is to be aware of how your organization is spending money.
By assessing the above factors, organizations can cut unnecessary online service costs by only paying for what they need. An organization that is well-informed about its needs and use of resources is in a better position to succeed and scale their offerings—without breaking the bank.
