It should come as no surprise that investments in cloud-computing has been increasing at a rapid rate. According to management consulting firm McKinsey & Company, cloud-specific spending is expected to grow at more than six times the rate of general IT spending through 2020.
And while some organizations are still struggling to adopt a cloud-centric or cloud-first strategy and leveraging all the potential that cloud technology has to offer, most recognize that cloud computing will be a necessity moving forward if they intend to continue to innovate and compete.
With so much movement going on in the cloud space, one would think that the mechanisms by which organizations purchase cloud services would be keeping pace. Unfortunately, they are not.
The process of buying cloud services still mirrors old-fashioned sales models. Purchasers must contact multiple companies to get price quotes and are often unaware of other, more viable options on the market.
In terms of IT spending, waste is always an issue. But the problem of wasted cloud spending doesn’t stem from poor budgeting or even from mistakes made within IT departments. It stems from the cloud services market itself.
There is No Pricing Transparency in the Cloud Market
Organizations across the U.S. and Europe depend on public cloud services. They are critical to their operations and their continuity. But if you’re an organization searching for a cloud package that fits your objectives, you will face multiple challenges.
First, the cloud market has a lack of standardization, regulatory or otherwise. Often, organizations must be wary of getting “locked into” a contract with a cloud provider only to find out later that the package they’ve purchased isn’t the right fit for them.
Second, the process of buying cloud services is overly complicated and time-consuming, which means your organization loses productivity and incurs additional overhead costs just by shopping for cloud services.
Third, there are no comparison tools for enterprise-level cloud services. Not only are organizations required to ask for quotes from multiple sources manually, they’re likely to be unaware of a substantial number of other options available on the market. They could be missing out on a better price point or a package that aligns more clearly with their strategic objectives.
And lastly, many organizations sign a contract without understanding the full range of fees and charges they may face because of how they use their cloud services. These costs can take the form of surprise migration costs, overused resources, underused resources, and the expiration of free resources. These costs can add up, ballooning the IT budget.
All of these issues lead to a lack of cloud pricing transparency that makes it difficult for organizations to budget effectively and plan in the long term.
Cloud Pricing Transparency in the New Cloud Marketplace
The answer to the transparency issue lies in the new cloud marketplace. Organizations should be able to shop for cloud services in a single location, gaining insights into pricing information and computing power with the click of the button and the scroll of a mouse. Instead of dealing with confusing fees, cloud pricing will be upfront and easy to understand, allowing organizations to pursue cloud cost optimization while balancing their IT budgets.
We created UCXmarket to address the problem of cloud pricing transparency. Sign up for free and start shopping for cloud services right now or book a demo to learn more about how the marketplace works.