Can a Multi-Cloud Strategy be Cost Effective?

Looking to make a move to multi-cloud? Learn about how this can impact costs and whether its a cost-effective strategy

So you’ve been running happily along with your existing cloud service provider. You’ve successfully migrated your startup’s development operations into the cloud. Getting all the benefits of an agile, flexible, and scalable cloud architecture to deploy and host your business applications. All without having to worry about the challenges of multi-cloud cost strategy.

Now, your org has scaled beyond the startup days, you’re becoming a medium to enterprise sized business, and the game is changing. You have new challenges to tackle. You need to improve the redundancy of your infrastructure, you have clients in new geographies that have specific data compliance requirements, and there are capabilities that you need that your current cloud service provider simply doesn’t have available right now.

On top of all that, you need to make sure that your cloud infra is still running as cost-effectively as possible.

Can a multi-cloud strategy that incorporates the best of multiple-worlds be the right solution, solving all your challenges, AND without breaking the bank?

We’ll dive into that topic today! Here’s what we’ll touch on in this article to help you make a more informed decision on your cloud strategy.

  • What is a multi-cloud strategy?
  • Why would you need one?
  • Can it be cost-effective?
  • What are some multi-cloud cost control tools?
admin in a cloud server room

What is a Multi-Cloud Strategy?

In essence, a multi-cloud strategy is a cloud infrastructure strategy that utilizes two or more cloud service providers. The most popular cloud providers being AWS, Azure by Microsoft, and Google Cloud. AWS has the majority of the market share with 34% of organizations utilizing AWS for their cloud infrastructure requirements.


Why Would You Need a Multi-Cloud Strategy?

There are a number of reasons why your organization may need to utilize the services beyond just the one cloud provider.

Dependency and Redundancy

For some businesses, the risk of downtime can be huge. ECommerce organizations for example have the highest potential revenue loss with downtime of ordering systems. Especially during peak periods, an outage of even just a few minutes can mean not capturing thousands of orders and losing that revenue completely.

With that, even the high availability SLAs of one cloud provider may not be enough. By spreading redundancy to an additional cloud provider, an organization is able to further reduce the risk of downtime and impact on their business.

Data Sovereignty

Data privacy and compliance evolved a lot over the past couple of decades. All in the name of protecting consumers all over the world. With that comes increased data compliance regulations that companies need to adhere to lest they expose themselves to hefty fines.

Many companies collect data that is required to be kept in or out of certain geographic areas.

With a multi-cloud strategy, allows an organization to find the best provider for their geographical data needs. A common use case is a company choosing not to host their data with a cloud provider with data centers based in the United States. As this data is subject to the patriot act, making it available to the US government.

Service Features

As much as you might love your existing cloud provider, they may be missing a key piece of functionality for your business requirements. There is a ton of nuance in functionality between the various cloud providers (more than we can list in this article), so there is often the case where one provider has better services in compute, storage, or networking. An example of this is the rate at which cloud providers are bringing AI and ML services to the market.

Legacy Infrastructure

Often you’ll run into a case where the company is currently running legacy infrastructure that has yet to be or is in the process of being modernized. In the 90s and 2000s, the majority of tech companies were running on-premise windows infrastructure. Making the move to Azure just made sense, but now with the leaps in functionality from other cloud providers, it may make sense to move to AWS or GCP.

A major downside (outside of potential costs) to consider is the team skill requirements. With a multi-cloud setup, you’ll need a team with a wide range of skills to be able to manage the infrastructure. With many cloud engineers focusing on one or maybe two different cloud providers, you may find it difficult to round out your team to manage your infrastructure effectively.

Can it be Multi-Cloud be Cost Effective?

  • Additional cost transferring data between providers egress fees
  • Can’t leverage volume discounts

That’s all great, but if it’s prohibitively expensive, then why bother? While there are benefits in running multi-cloud, if one of your priorities is cost then it may not be the best strategy and here’s why.

Volume Discounts

Cloud providers such as AWS give their customers incentives and discounts for increased usage of their services. An example of this can be seen with data transfer fees on S3. They’ll charge you $0.17c per GB for the first 10 TB and then $0.13c for the next 40 TB. Saving you money as you scale up usage on their platform.

By splitting your usage across multiple cloud providers, you’ll likely fall short of the volume discounts and end up paying higher pricing for the lower usage rates.

Egress Fees

Every cloud provider wants to encourage you to keep your business within their platform. As a result of that, there are fees associated with transferring data out of one provider’s infrastructure and (presumably) into another cloud provider’s infrastructure. Here’s an example of egress fees for data coming out of an AWS EC2 instance:

OUT of EC2 to InternetPricing 
Up to 1 GB / Month$0.00 per GB
Next 9.999 TB / Month$0.108 per GB
Next 40 TB / Month$0.102 per GB
Next 100 TB / Month$0.084 per GB
Greater than 150 TB / Month$0.06 per GB

Multi-cloud cost control tools

keywords: cyber security tips for the small business owner

Fortunately, if you do plan on running a multi-cloud strategy there are a number of tools to help you manage the cost of your cloud.

You can read about them and more in our article on the best cloud cost control tools.

multi-cloud server room

Should You Consider a Multi-Cloud Solution For Your Business Needs?

For many organizations, a multi-cloud strategy ticks most of the boxes for an effective cloud infrastructure to support the business. However, if cloud spend is near the top of your priority list, you may find that you’ll lose out on the economies of scale of focusing on one provider.

If you’re considering a multi-cloud strategy for your business or looking for a team to manage your multi-cloud infrastructure then give us a shout! We’re experienced in AWS, GCP, and Azure. So we know the benefits and constraints of each cloud provider and can help you create a strategy that best suits your requirements.

Tony Nguyen

VP Customer Success, Marketing & Ops

Tony is focused on building the Autimo brand as the leader in Cloud Services and Education. Helping to level up each and every one in the global cloud community. He’s an AWS Certified Solutions Architect Associate (CSAA) and is focused on continuously growing his knowledge of cloud technology.

Make sure you don't miss out on the next part of the series!

Sign up and we'll send you the latest cloud technology insights
Need help?

Don't hesitate to contact us for more information

We’d love to get in touch to see how we can help you leverage cloud technologies to grow your business.