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Hidden Cost in Cloud Computing

Over the last decade, cloud computing has gained influence as businesses are compelled to migrate to this new platform. Virtualization has capitalized on cost efficiency as its main strength for any industry. However, recent revelations has uncovered that there may be hidden costs that cloud providers are not showing.

According to a survey: “79% of the CIOs are concerned about the Hidden cost of cloud computing”

According to the study conducted y Research In Action from Compuware Corporation in December 2012 which gathered 468 CIOs from Asia, US and Europe as respondents in order to look into the top investment priorities and IT projects of 2013. Perspectively, the study showed that 79% of the CIOs thought of the potential hidden costs of cloud computing. The costs here can be anywhere from subscription fees, system and staff setup and training. Let’s discuss the detailed concerns they have of cloud computing migration:


Poor end experience due to Performance:

Almost 64% of the CIOs believe that due to cloud application bottleneck usage cloud resources and e-commerce will experience poor performance. This goes right to the customer end-user experience as well, since e-commerce is the leading cloud application area, the survey also finds that – “78 percent of respondents are already using cloud resources to support e-commerce”.


Brand Performance and Customer Loyalty:

Due to poor experience and poor cloud computing customer’s loyalty may greatly reduces, believed by 51% of the respondents.


Revenue Loss and Increased Cost:

44% CIOs believed that as a result of poor performance, reduced availability or slow technical troubleshooting services, companies may lose revenues and as problems becomes more multi faceted and evident business cloud solutions may become more costly, 35% CIOs perception.


Increased effort required to manage vendors and service level agreements:

As system troubles become more complex, vendor management and service agreements may begin to require more effort of control and management. According to 23% of the respondents


The same study also revealed that 81% of the CIO respondents are already using e-commerce to leverage their business cloud platforms and critical applications. For those who have not fully migrated into the cloud, they intend to do so in the next 12 months. The research also showed that 73% of the companies are still operating using traditional methods to control and manage application performance.

Thomas Mendel, managing director at Research In Action said, “The cloud is increasingly being used to deliver business-critical applications, so it is quite shocking that most companies are just waiting for problems to occur and then firefighting. The fact is that most traditional monitoring tools simply don’t work in the cloud. Effectively monitoring and managing modern cloud-based applications and services requires a new approach designed to work in today’s complex, hybrid and dynamic environments. Failure to do so could have a hugely detrimental impact on reputation, customer loyalty and revenues.”

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