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The real cost of your Personal Cloud

As time goes by, it becomes more common to see ourselves contracting services on-line. They are diverse, easy to consume, mature enough, convenient and economic. Some times we see our friends, relatives or colleagues consuming them and, once we get to know details about their experiences, we feel it is the right moment to start and experience the service ourselves.

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Many of them are really economic (in the range of 1 to 5 euros/month), so we don’t feel the need of any sort of financial control. And here lays the problem:

  • It is extremely easy to loose control of how many of these “inexpensive services” we finally end up consuming at the end of the day.
  • Even worse, we may be paying those services on foreign currencies without being conscious of the impact that it is really having. May be, we can’t leave the service for whatever reason and we are not aware that the currency exchange rate is a real risk.
  • May be, our country is forcing your Cloud Service Provider to apply local taxes for users on his territory. Taxes change and evolve with time and, may be, we didn’t notice that we are now paying more than what we originally started paying for that service or subscription.
  • May be, we didn’t notice that it’s been years since we are users of a certain service. But, we keep paying on a monthly basis and loosing the opportunity to save money moving to an annual payment plan
  • May be, we have a “mental picture” of our monthly cost structure but didn’t take the time to aggregate them all and see what they finally represent as a whole …

To make it more “interesting”, we tend to forget that there are “access costs” that we usually take for granted, but that are necessary to be able to enjoy the benefits of these Cloud Services. That is mobile and broadband access to Internet. In fact, we usually demand higher access plans because of our Personal Cloud Service needs.

Therefore, to ease regain control of your own “Personal Cloud”, I’ve decided to build an spreadsheet that can help you take your own purchase/spending decisions. I’ve included a number of services in it with their updated prices from an spaniard point of view. It is, though, just an example. Remember that this is is a tool, so feel free to take it and adjust it to your own situation. One of the interesting things of it is that enables scenario simulation so that you can figure out the real financial impact that one spending decision might represent.

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In the simulation shown in the example we can extract some interesting insights and/or some conclusions:

  1. Internet access costs in Spain are considerably high. Of course, I could have chosen a cheaper carrier, like Pepe Phone or many others. The point here is to show you that switching your service providers for your Internet access services may have a significant impact on the overall cost structure. Anyway, this may not be the case in other countries.
  2. VAT might not be the same: we can see 23% from services paid in Ireland; 15% is what you get charged in the Skype web site (even when you identify yourself as a Spanish citizen …); and the 18% will become 21% in just a couple of months … So, watch out!
  3. Currency exchange rate can change and evolve. It can even be volatile. Just play with the numbers to see what can happen. You should also better know/review too if the Terms and Conditions of all of your Services include clauses to automatically update prices to cover this sort of risks …
  4. If you run your blog with your own hosting, don’t forget to take into account your Domain Names or any other associated costs (paid themes, plug-ins, libraries, components, etc.) …
  5. You might share one Service with others. That will reduce your unit cost, but it will put you in risk of violating the Service Terms and Conditions. Anyway, you should know what you are doing …
  6. Every subscription counts: GPS database maps are just one example. But there are many others: Amazon Prime, cyberlockers, Software Licenses, Book Stores, On-line Security, etc.
  7. Cloud Storage services are fighting in fierce competition. Take the most of what you can get for free and be sure it worth what you pay when that is the case. And, of course, be ready to switch to a different Service Provider if you think you have to …
  8. Skype Premium is relatively expensive … when compared with a Google Hangout. In other words: knowing what the competition of a given Service does, can save you money.
  9. LinkedIn is comparatively expensive. Just make sure it is really working for your goals.
  10. Purchase premium social media tools and services based on ROI analysis or realistic professional needs. They are not cheap –comparatively speaking, of course- and you will need more than one of these services for professional activities.
  11. We can save money with annual payment plans provided that we know that we are sure of such type of commitment. Therefore, make sure you review your choices whenever you are reaching one year of service experience.
  12. As we suspected, our “mental picture” of our monthly expenses doesn’t match, most of the times, with what we finally see when everything gets aggregated …
  13. A Personal Cloud is composed mainly of plain simple SaaS cloud services. More complex IaaS and PaaS offerings –such us Amazon Web Services, Windows Azure, etc.- would require an in depth analysis for each particular case. But, fortunately, they don’t usually belong to the sphere of your Personal Cloud.
  14. Just in case you are Product Manager or someone responsible for a digital business strategy, this tool can help you compose consumption profiles for a basket of digital goods and compare them with their overall incomes and expenses. This way, you can start taking decisions, compare real market behavior against a theoretical model, etc.

As you can see, it is extremely easy to overlook many of these details. We are all humans, we all have lives and short-term issues to deal with. Hopefully, this tool can help you to handle your personal journey to the cloud or regain control over your existing situation.

Anyway, I would love to hear about your particular experience. What do you think about this? Do you think that there is something missing?

The real cost of your Personal Cloud by Carlos Veira Lorenzo is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Published in Internet Personal Stuff Service Management Strategy Virtual World

  • This is very interesting. We have created a tool which answers this question but for Public IaaS clouds (think AWS, Google, Microsoft, Rackspace).

    I agree with you on where the problems, in fact our users have these exact same issues. These problems are not just for the personal cloud, but for businesses also.

    Anyway, I thought I would comment since I enjoyed reading this.

    Thanks,
    Hassan

    PlanForCloud.com

  • Cástor Torres

    Great article! Some comments:

    It is true that carrier are expensive in Spain, but for example, I am now using more any free “free call” Application as FRING, VIBER or even Skyppe to do my regular calls, specially to other countries.

    What I have also discovered on investigating on Social Media, is that for some small volume of information, everything is pretty much free, and if it is not, basic things will become, as you mentioned, competition is strong. Hence, I do thinkn that it is convenient to spend some money once you have a clear idea on what you want to do and you have at list try with free applications on the volume that you require.

  • @Hassan Yes you are right. IaaS and PaaS cost drivers are far more complex and require careful planning :).

    1000 thx for sharing your point of view! :)

  • @Castor Yes, you are right.

    Anyway, the access cost is still there: unless you are surrounded by decent WiFi access you still have to afford expensive Data Plans from your local carriers …

    I should give Viber another chance :). My last experience was not very good, but this might have changed! :D.

    Very good point about Social Media services! :) However, my experience also shows me that looking for services that behave “reliably” worth every penny you can pay. At the end of the day, time is money. And you are not doing a good business if you have to be constantly watching if something has failed: the opportunity costs can be huge! :D

    1000 thx for sharing your point of view! :)