From the course: Planning a Small Business Cloud Strategy

How much does it cost?

From the course: Planning a Small Business Cloud Strategy

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How much does it cost?

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- [Instructor] Let's talk about how much all this costs and how we price cloud based systems. So what's important here is to focus on what it costs to build and operate. Not necessarily who's got the best storage prices, things like that. You need to consider your ability to push this out into a operational aspect and how much it's gonna cost you to build a thing, operate the thing, over time. Watch out for hidden costs which is training or data center space, things like that. You may find you need to keep a certain amount of legacy systems that are on premise and therefore you're gonna need data centers. You need to certify your people for whatever cloud that you're leveraging. They may have hidden costs that are above and beyond some of the costs that they publish as part of leveraging the services. Those need to be understood. Make sure to put cost metrics and monitoring in place, is something I can't stress enough. Ultimately, we need to understand how the costs relate to how we're gonna operationally leverage something. We need to monitor things ongoing as well as do predictive monitoring in terms of what we're going to leverage over time, what patterns of usage have occurred, how much we're paying for that cloud service over time. All those things really need to be put in place in governance monitoring costs metrics, things like that need to be established. So this is typically AWS pricing and this is what people look at in terms of sizing output of cloud infrastructure and service provider like AWS will cost. Obviously, Microsoft is gonna be a bit different. And Google's gonna be a bit different. But you know we have standard on demand instances, we have API sizes small, in this case, Linux and price per hour is gonna be 6 cents. Which doesn't sound a lot, but if you allocate that system and leave it up for a year, you're gonna run into some money, as well as Windows based systems. So it's really a matter of picking the platforms that you need, the T-shirt size you need, Small, Medium, Large, Extra-Large, the cost of that platform to run per hour, and then how that's going to pair up to storage, leveraging a database, and all that's gonna be extra cost, as well as network utilization, things like that. So, if this hasn't gotten by you, it's very complex to understand the pricing, such in this case AWS's pricing, Amazon Web Services pricing, and how it kinda lines up with your pattern of use or how you're gonna leverage the system. It's gotta be important for you to understand how this is going to be operationalized and how much it's gonna cost you ongoing. So we're moving to on-demand pricing and so, ultimately, we're, you know, able to look at things such as EC2 cost savings versus on-demand in the US East, percentage of on-demand price, and the prices go up based on use, in this case large versus small, some of them are gonna be stable over time, some of them are gonna be very bursty, and the prices change overtime as well. Typically they go down, but not always, and so you need to work with your cloud provider to understand exactly what they're charging you for, the increments in which they're charging you, how you're consuming those things, and how you're likely to consume them going forward. So make sure you understand what you're paying for, AWS provides you with a simple monthly calculator, please make sure to use that, beyond your cost-governance tools and cost-calculation tools, just to have a baseline understanding of what your bill's likely to be based on your utilization of, in this case Amazon's technology, but Google has a very similar feature, and so does Microsoft.

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