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Understanding public cloud risks and costs

Public cloud boasts a number of enterprise benefits, but it isn't perfect. Enterprises should be aware of unpredictable cost structures and other drawbacks.

Public cloud services offer enterprises several advantages. They allow for flexible and affordable virtual machine deployments and can boost an organization's data backup and workload-scaling capabilities. However, public cloud isn't without its drawbacks.

After understanding the benefits of public cloud, as laid out in this series' first article, it's important to look at the critical disadvantages before entering the project planning phase. The next article in this series focuses on purchasing criteria and preparing a vendor request for proposal (RFP). Finally, the series will compare market-leading services against established criteria and against each other to help you select the best public cloud service for your environment.

Multi-tenant environment

One of public cloud's biggest disadvantages is its multi-tenant environment. The host server running your virtual machine (VM) likely is hosting other companies' VMs. Because of this, public cloud providers don't give you access to the hypervisor, so you can't install host-level utilities, such as antivirus software or backup agents. This also means you can't join a hypervisor to an existing domain or cluster. There are also security implications, as well as potential downtime from cloud or WAN failure.

In addition, public cloud providers own the hardware and control the underlying software, so they can make low-level changes at will. Consider how much work you put into planning a server OS or other type of upgrade. Normally, an organization will perform extensive testing prior to upgrading the OS to make sure there are no adverse effects. Conversely, a public cloud provider can make low-level changes to the infrastructure without notifying customers in advance. These types of changes can impact customer workloads.

Unpredictable costs

Another disadvantage of running VMs in the cloud is that costs can be wildly unpredictable. Public cloud providers are not known for using simple billing models.

Typically, you are billed based on the resources you consume. This includes storage resources, but also CPUs, memory and storage I/O. Resource consumption may be billed differently at different times of the day, and not all activity is treated equally. There are cloud providers that differentiate between various types of CPU functions, billing those functions at different rates.

Because public cloud providers use complicated billing formulas, it can be difficult to estimate the cost of running cloud workloads. They can vary each month based on how heavily the workloads are used. Fortunately, some cloud providers have portals that customers can use to monitor costs and establish safety stops if costs are approaching designated thresholds.

Backups become complicated

Another disadvantage is how public clouds can complicate your backup processes. If you have mission-critical VMs running in the cloud, you need a way to back them up.

While most cloud service providers perform their own backups, they don't necessarily offer restoration services for customers. As such, you may need to back up your cloud-based VMs to your local data center or to a backup server running on a different public cloud.

This can be complex because most of the off-the-shelf backup products support data backup to the cloud, but not from the cloud. A cloud data backup increases the consumption of storage I/O, network I/O and WAN bandwidth, which may also increase costs.

There are a number of advantages and disadvantages to running VMs in the public cloud. Whether an organization should take advantage of the public cloud depends largely on the organization's individual needs. After reading about the benefits and disadvantages of public cloud, check out other articles in this series on the buying process for public cloud virtual server services, public cloud purchasing criteria and cloud market comparisons.

Next Steps

Avoid surprises with cloud cost analysis tools

Building a solid cloud backup strategy

What to know about assessing cloud risk tolerance

This was last published in April 2015

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