TCO: How to Calculate Cloud Storage Costs

Storage costs: You pay a fee for each gigabyte of data that you store in the cloud. The storage costs vary depending on how much data you store (at higher volumes, the per-gigabyte fees are usually lower), as well as which storage tier you use (“hot” storage tiers, which allow immediate access to data, are more expensive that “cool” and “cold” tiers, which offer lower prices but may impose delays when you need to access your data).

Egress fees: Most cloud providers charge you a fee for every gigabyte of data that you move out of their cloud and into another location on the Internet, such as another cloud or an on-premises server. These are known as egress fees. You also typically have to pay a fee (albeit a lower one) if you move cloud storage data from one cloud region to another within the same provider’s cloud.

Access fees: Most types of access requests to cloud-based data involve a fee. Actions such as listing the contents of cloud storage, copying files within cloud storage (even if they remain in the same location and don’t involve any kind of egress), or moving data between one cloud storage tier and another incur fees in most cases. This is true whether you perform these actions manually for administrative purposes or they are performed programmatically by an application that has access to your cloud data.

Replication costs: If you choose to replicate your data by storing multiple copies in different cloud regions, you will pay additional storage fees. Generally, for each additional region you add for data replication purposes, your total storage costs will increase by about 100% compared to using just one region. The added costs may be worth it, of course, if you need the data availability protections that replication confers: When you use replication, your data will remain safe even if one cloud region goes down.

Cloud data monitoring: To prevent unexpected surprises, it’s critical to monitor your cloud-based data. You should perform data-integrity checks to guard against the risk of data becoming corrupted; keep catalogs of your data, which detail which files should exist, and use them to perform audits that check whether the data that actually exists in your cloud matches what should be there; and identify and investigate incidents where applications or users could not access cloud data for some reason, which could be a sign that the storage is misconfigured or corrupt. Continuous monitoring for issues like these requires an investment of time and money on the part of your team, but it will help ensure that you don’t run into situations where data problems disrupt business operations.

Data security: Likewise, your team will need to make an investment in securing cloud-based data. You may need to encrypt your data to meet compliance requirements. You will also need to configure cloud IAM policies to control access to your data. And you should perform security audits to avoid the horrendous mistake of accidentally making your cloud data available to the public, among other security problems.

Cloud backup: Even though public cloud infrastructure tends to be more reliable than on-premises alternatives, public clouds can and do fail sometimes. For that reason, you should back up any critical data that you store in the cloud. You could back it up to another public cloud or to local storage that you maintain on-premises. Either way, the cost of deploying backup software, running backup routines and managing backup data is significant.

Data migration: If you choose at some point to switch to a new cloud provider, you’ll need to migrate your data. This could be quite costly and time-consuming, especially if you have a lot of data to move. You’ll need to pay egress fees to get your data out of one cloud and into another, and the speed at which you can move the data will be constrained by the network connection between the two clouds.