5 Common Online Service Costs and How to Avoid Them

Many organizations are taking the leap to begin rolling out new online services – and with relatively low development costs and a wide range of use cases, it’s no surprise that online services are rising in popularity. From internal self-service platforms for HR, to customer-facing solutions, all the way to Software as a Service and media platforms, online services are proving useful for almost any organization and their needs.

However, running these workloads is a different story. This is especially true when the back end is involved, as the costs of using or managing the hardware itself are often left out of the scope. Even if these costs are included, they are usually only a ballpark estimate with no real cost breakdown. To avoid overpaying, watch out for these five common pitfalls when assessing the operational cost of your online services.

1. Your Online Service Is ‘Always-on’ – Should It Be?

Not every only service needs to be available around the clock, every day of the year. If your online service is only used during office hours but remains on standby at night, you will still pay for the standby hours (even if you do not use them). These costs often add up quickly and are only discovered when they show up as a surprise on the bill. If you are hosting applications or online services with a cloud provider, determining whether you want always-on infrastructure (and if so, what the cost is) is the first thing you need to decide.

2. More Users Means More Data Usage

The more users on your platform, the more data they will use. This can cause usage spikes, especially if you host a platform on which users can post videos or other data-heavy content. Always make sure your environment is sized on realistic usage and ensure there is a good trade-off between cost and return. Otherwise, as you see your user base grow you also risk seeing your data usage (and costs) skyrocket.

3. Unsuitable Service Levels

When hosting apps or online services with a service provider, you are paying for more than just the use of their infrastructure – a level of support and management services are also included in your costs. The service levels you receive should be assessed on a regular basis to ensure that you are receiving (and paying) for the right support. After all, there is no sense in paying for something you never use.

4. Everything Is Running in the Cloud – Is It the Best Fit?

Yes, online services and cloud go hand-in-hand. However, there are a lot of steps that go into building, testing, running, and optimizing online services and apps, and not all these steps are necessarily better off in a cloud environment. If processes are not run in their optimal environments, running everything in the cloud can quickly become costly, and can also run the risk of compromising data sovereignty, compliance, and security. For example, choosing an on-premise solution for highly sensitive data stored in your online service platform may give you tighter control over security, continuity, and costs.

5. Assess Your Total Cost of Ownership (TCO)

While you should always be able to assess your TCO, many service providers will try to only give you a simple estimation of unverifiable accuracy. This then gives them room to add in additional costs, for, say ‘start-up’ and ‘development’ that you are later unable to control or dispute. To avoid this, ensure that you always ask for and take an objective look at your full TCO statement.

In the end, the best practice to avoid overpaying for your organization’s online service is to keep an open line of communication with your service provider. A trusted and reputable provider will always listen and ensure that you have the optimal setup for your needs – with cost-saving and platform optimization at the forefront of their minds.