4 Hidden Costs of Cloud Contracts

Author: Imagination Date: October 01, 2012

What to consider and who to work with to ensure you aren’t overpaying.

More on Data SecuritySmall business owners are quickly adopting cloud-based services, but they should be aware of hidden costs that come with many of these services.

“Often, certain features are an extra cost because they have an impact on infrastructure,” says Sean Morris, director of sales at Digitech Systems Inc., a provider of Software as a Service and on-premise Enterprise Content Management in Greenwood Village, Colo. 

Here are a few hidden costs to look out for:

1. Percent Uptime

Uptime refers to the time your cloud service is available, so the higher percentage, the better. “Some agreements are 24/7, but others are Monday—Friday, 9 to 5, so a service level agreement could be an up-charge,” says Morris.

ImageSilo, Digitech Systems Inc.’s cloud service, offers a five nine (99.999 percent uptime, or five minutes of downtime per year), while others offer only 99.9 percent uptime (up to 9 hours of downtime per year). Morris says uptime is important to consider because many businesses can’t afford downtime—or the fees for more uptime.

2. Security and Data Delivery

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A cloud service is no help to your business if you can’t ensure your data is safe and accessible. “It’s important that the user knows how to get a copy of data in the event of a failure,” says Morris.

Morris says some providers will tack on fees for better security options and data accessibility, putting you and your clients at risk if you don’t pay more.  

   RELATED: Cloud Computing: How It Can Work for Your Small Business 

3. Unknown Extras

If you don’t have a clear understanding of what’s included in the agreement, you could find yourself with a lack of service features and a flurry of fees. 

Morris says some providers “charge for support calls after hours or to add additional users” once you reach a certain number. 

Other hidden charges include: 

  • Storage limitations or fees for exceeding your minimum
  • Fees for collaboration or sharing may be extra above storage
  • Fees for extra features like email management or records management functions 

4. Buying á la Carte

The best deals allow users to “pick and choose what they need,” says Morris. Choosing coverage on an as-needed basis allows you to pay for items that will solve your problems, and allow you to save money. 

For example, Morris says many companies will sell cloud services in “buckets of five user licenses.” But because many small businesses will only need one or two, purchasing five isn’t cost-effective.

Morris suggests contacting a value-added reseller who can help you wade through your options and find a service with the features and the price tag that fit your business.

   RELATED: 3 Tips to Secure Your Data in the Cloud 


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