How much does your cloud cost?

By Curt Kolcun, Vice President, Microsoft U.S. Public Sector

By now everyone knows that cloud computing has the potential to save federal agencies money, but determining the total cost of ownership (TCO) of a cloud solution is easier said than done. It’s easy to fall in love with low sticker prices, but to determine true cloud TCO and ROI, you have to dig deeper. Initial licenses typically represent a very small percentage of costs, which means agencies need additional information in order to get the most value for taxpayer dollars.

The key is to identify the hidden costs that come along with a cloud solution that isn’t enterprise-ready. By that I mean solutions that weren’t built with the workplace in mind. A lot of communications and productivity cloud offerings are good enough for consumers, but they don’t have the security, functionality, or support options that complex organizations demand. The last thing agencies want is to be stuck with a consumer product that requires a bunch of expensive add-ons from additional vendors to meet enterprise requirements. In addition to the upfront costs, internal IT teams must install, test, deploy, manage, and support each add-on, which requires a significant ongoing time and resource investment.

Let’s take security and archiving for example. Federal agencies deal with sensitive public information and have the highest security standards in the world. They also have archiving requirements and strict data retention policies that must be met. If your solution doesn’t allow you to encrypt messages or designate a file as confidential, you’ll have to add third-party tools. Another example is data integrity. Documents must remain consistent as they move in and out of the cloud, especially when dealing with draft legislation, documents that require watermarks, or any government document that can’t afford to be altered. If a solution can’t guarantee that fidelity, it’s another add-on that keeps upping your TCO.

And this is before you factor in support costs. If your cloud tools don’t come equipped with 24/7 voice support, the burden to fix problems is on you when service is disrupted. That takes time and a lot of online research from an internal support staff, combined with the productivity losses that occur while the solution is down.

There are migration costs. There are installation costs. There are training costs. It’s certainly not cut and dry. We encourage every government organization to really do their homework here. Agencies have different needs, and different existing investments, but an inexpensive solution can become pricy very quickly if it’s not made for the enterprise.