In fact, Gartner says cost reduction should not be your motivation. In both cases, there will eventually come a point where it’s no longer economical to operate in the cloud because the monthly costs exceed what you would pay to run it on-premises. The next largest portion, bandwidth, can be as high as 20% depending on how much data you are moving between your on-premises systems and your cloud provider. Compute costs will consume 60% or more of your total subscription. Because of this, the main costs for an IaaS subscription are compute and bandwidth. Anything below that and you are either at SaaS, where you are using an application, or a basic service like DropBox for simple storage.įor most customers, running IaaS involves taking on-premises apps and moving them to the cloud for any of a variety of reasons, be it scale, flexibility, or to reduce costs.

As companies make greater use of the cloud, they face pressure to optimize the costs.įor the purposes of this article, we will approach this from the perspective of purchasing Infrastructure-as-a-Service level services, since that is the starting point for a complete package of services.

What is dropbox in cloud computing