IT costs are complex and difficult to figure out. First consider traditional IT, better known as on-premises. On one hand you have the cost of the hardware, the software, and the data center space. We all know that’s just the beginning. There are operating and administrative costs, including the cost of the many humans needed to keep your infrastructure running. Also factor in the cost of setting up disaster recovery systems, power and networking costs.
In contrast, cloud computing costs can be easier to figure out because they are mostly fully loaded. That is, cloud invoices include all the costs listed above and you pay only for usage fees. Cloud providers charge service fees based upon the minutes you use or the resources you leverage such as storage, compute, and networking.