Cloud Storage Pricing Models and Other Considerations for Education

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The future of computing infrastructure is in the cloud. While many organizations continue to rely upon outdated, inefficient on-premises data solutions, more and more private companies and public institutions are realizing the tremendous potential of cloud computing by migrating their infrastructure into a variety of cloud services. 

For educational institutions, the cloud may offer a number of advantages, but cost is always a key consideration when making technology decisions. Finding the right cloud storage pricing model will often determine whether or not a cloud migration will be successful. While there are a few other unique considerations facing these institutions, every migration decision needs to begin with assessing cloud storage pricing models.

 

Cloud Storage Pricing Models

Cost is typically a key driver for organizations migrating to the cloud. That’s because the economies of scale offered by cloud storage providers make it possible to convert sizable capital expenses (CAPEX) into much more manageable operating expenses (OPEX). 

But educational institutions need to be aware of what form those OPEX costs are going to take after the migration. This is determined by the type of billing method the provider uses for cloud storage in education.

 

Consumption-Based Billing

Traditionally, cloud storage providers have favored a consumption-based model for billing. Much like paying an electric bill, users pay for the amount of cloud computing resources they use each month. While this system may be ideal for an organization that has a very accurate picture of how much capacity they’ll be using, many companies and institutions lack this level of accuracy.

That’s because most migrations are carried out with the intention of replicating existing capacity. This makes sense in theory because an organization wants to have the same IT capabilities in the cloud that it had with its on-premises infrastructure. The problem, however, is that most companies routinely overestimate their infrastructure needs. A 2017 Stanford University study found that on-premises data solutions have as much as 80% more server capacity than they need due to inefficient deployments that waste power and storage space. Using this inefficient infrastructure as a baseline causes companies to drastically overestimate their cloud computing needs, leading them to waste more than $60 billion on capacity they don’t actually need.

These inefficiencies can result in sizable swings in cloud storage billing from month to month. Since many public cloud storage providers don’t offer good visibility into how cloud data is being used, it can be difficult for an organization to identify where the irregularities are located and determine what changes need to be made to get the cost of cloud storage back under control.

 

Level Billing

Also known as dedicated billing, this alternative cloud storage pricing model is far more attractive for government agencies and educational institutions with very strictly defined budgets. The whole idea of ongoing OPEX is predictability. Organizations want to know how much money they can expect to spend on IT costs each month so they have more flexibility with their long term budget. When migrating data and applications into a service that offers a level billing model, monthly costs of cloud storage are determined ahead of time based on estimated need, which ensures each month’s bill doesn’t come as a (potentially unpleasant) surprise.

Adjustments to level billing are typically made on an annual basis, which coincides with the budgetary timeline for most educational institutions. At this point, the SLA will be reviewed and a reconciliation period will address any discrepancies. 

If the organization used less capacity than it was paying for, it could receive a better deal on pricing for the upcoming year. Of course, if the initial capacity needs were drastically underestimated, customers could find themselves stuck having to pay the difference and face increased costs for the next year. This makes it more important than ever for IT departments to provide an accurate assessment of capacity needs during the initial migration period.

 

Other Cloud Storage Pricing Considerations for Educational Institutions

There are a few other factors educational institutions need to take into account when assessing cloud storage providers. Given the complications involved with any cloud migration and cloud storage in education, it’s important for them to assess their needs from multiple angles and make a decision that will deliver the most long-term benefits.

 

How Many Cloud Platforms Are Needed?

As with any organization, one cloud service often isn’t enough to meet the needs of an educational institution. Certain departments may need access to different cloud applications, and there may be interoperability concerns with partner institutions that have already made the transition to the cloud. 

Furthermore, many individual users may have their own arrangements with different cloud vendors that they want to tie in with the institution’s primary cloud deployment. Assessing these multi-cloud needs can be a major challenge for administrators, but migrating into a cloud storage provider that offers the connectivity options to add services from other vendors as the need arises is a good way of securing future flexibility.

 

Does the Cloud Platform Meet Security Requirements?

Security is one of the biggest concerns with migrating to the cloud. Since cloud-based networks are so much more accessible than traditional on-premises networks, they must account for a variety of additional security risks. 

Who will be authorized to access certain data and applications? How will the system handle user data for people who are no longer affiliated with the institution? What devices will be allowed to access cloud data and under what conditions? 

Many institutions have chosen to address security challenges by hosting their essential network services in a virtual private cloud (VPC) rather than a public cloud. A VPC not only offers more visibility and control, but also provides higher levels of service uptime.

 

What Are the Institution’s Compliance Needs?

While closely connected to the question of security, compliance needs are quite significant for cloud storage in education due to the unique nature of the institution’s mandate. For instance, any institution involved in providing medical services or conducting medical research needs a cloud computing solution that is fully compliant with the demands of HIPAA/HITECH regulations. Student records are also protected under the Family Educational Rights and Privacy Act (FERPA), which dictates how institutions may disclose student information. 

Since they also handle financial information related to tuition payments and loans, educational organizations must also be sure that their cloud computing solutions are fully compliant with various financial guidelines (such as PCI DSS for credit card information).

 

DSM Can Take You to the Cloud (and Beyond)

As Florida’s preferred cloud provider, DSM has the experience and infrastructure to help educational institutions begin their journey to the cloud. Whether it’s using our colocation data center services to establish a secure on-ramp to the cloud, or implementing a fully managed (and compliant) VPC, our team of cloud experts is ready to meet the operational needs of any organization. 

To learn more about DSM’s cloud storage billing and managed hosting services, contact our team today and tell us all about your unique infrastructure needs.

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