Cost Considerations for Placing Enterprise Workloads in Public Clouds

Analysis conducted by Prowess Consulting indicates that a multicloud solution—a combination of on-premises and off-premises locations—could save money over the public cloud for a variety of workloads.

The embrace of the public cloud by organizations of all sizes over the past decade has been extraordinary. Between 2010 and 2020, the global cloud computing and hosting market size increased by 535%; in 2010, the global cloud computing and hosting market was only worth $24.6 billion, a number that grew to a whopping $156.4 billion by 2020.1 In 2021, public cloud services grew by 18.4% year-over-year.1

The monetary cost of the profound adoption of the public cloud for businesses can be equally staggering. End-user spending for public-cloud services worldwide is projected to approach $600 billion in 2023.2 And by 2026, one estimate projects that 45% of all enterprise IT budgets will be spent on the cloud.1

The pros and cons of public clouds extend beyond mere money. Typical use of the public cloud by organizations can pose challenges. The fact that different departments and even teams within organizations can (and do) make their own purchasing decisions for cloud services often leads to the spread of shadow IT, or the use of cloud-based software and services without the knowledge or central management of the IT department, which can pose a security risk. Moreover, the public cloud can create skills gaps for businesses as those called on to use cloud-based services might not know how to do so (or how to do so securely). The mobility and geographical reach of the public cloud can also threaten organizations’ adherence to governance, regulatory, and compliance (GRC) requirements and data-sovereignty mandates.

Even if departmental use of the public cloud goes smoothly, it can still create stiff challenges for organizations’ IT departments. Getting a company’s app to work in a variety of environments can create technical interoperability issues for IT personnel and developers, as they must reconfigure and refactor apps (possibly multiple times). Workloads hosted on the public cloud can also lack access to the newest security features provided by latest-generation processors and hardware, which can compound all of the ramifications for performance and efficiency that older processors and hardware can bring. On top of all of that, disparate operating environments can also lead to security-configuration mismatches across apps and clouds, multiplying the headaches for IT.

In order to assess the price differential of a multicloud (including private cloud) environment versus the public cloud, Prowess Consulting investigated the costs of running various workloads on public clouds versus multicloud solutions. We examined a matchup of Amazon Web Services® (AWS®) and Dell™ APEX solutions as representative examples of these two as-a-service options for running a variety of enterprise workloads. We discovered that multicloud deployments with Dell APEX on average cost 28–58% less than public cloud–native options run on AWS, including accounting for factors such as managed-service and co-location fees.

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