- Payment for the infrastructure
One of the reasons for the high cost of cloud infrastructure compared to on-premises solutions is the cloud infrastructure. When you decide to move your apps and data to the cloud, you will be charged by the provider for the infrastructure you will use. This includes storage, servers and network equipment. The cloud service provider is responsible for maintaining the infrastructure and ensuring their service is always available to the customers. As a result, businesses must factor in the costs associated with these services when comparing the available cloud and on-premises storage solutions. In comparison, the on-premises solutions do not require up-front investment in infrastructure because businesses choose what they can acquire and purchase it by themselves.
- Payment for service
The payment-for-service model is another reason cloud services can be more expensive than on-premises solutions. Compared to cloud solutions, on-premises solutions allow businesses to purchase software and pay annual maintenance and support fees. On the contrary, cloud services are subscription-based, with businesses paying a monthly or annual fee to access the software. This means that businesses rent software instead of outrightly owning it. Due to this, they invest less in the software's long-term success and will be out if the software experiences issues. The increased churn leads to high customer acquisition costs and reduces profit for cloud service providers. This can result in providers charging more for their services to cover the costs they are likely to incur.
- Payment for usage
Usage payment is another reason the cloud can be more expensive than the on-premises software. Unlike the on-premises solutions, where you pay for the software, cloud services allow you to pay for what you use, the number of users you have, and the time you will use the cloud service. This can rise in case of more users and increased data and time. Thus, you will need more resources if you want to increase usage.
- Payment for storage
One of the reasons why people choose the cloud over the on-premises is the storage capabilities and space it offers. However, this can sometimes become more expensive than the on-premises solutions if you need additional data storage capabilities on your servers. You will have to pay more to cater to your needs if you have more storage needs. In addition, cloud service providers. Cloud service providers charge their customers based on the amount of data they store, which often raises the cost of the cloud if you have a lot of data that needs to be stored. Cloud providers may also charge for additional services like backup and recovery, which ends up increasing the final cost. The solution to this is to store only the data you need on the cloud and the rest on-premises.
- Payment for bandwidth
Bandwidth is the amount of data that can be transferred between two points at a given time. It is usually measured in bits per second. In cloud service provision, bandwidth is the data transferred between the cloud, which is a server and the user. This can be the data transferred between the device of the user and the cloud. Since the cloud service relies on data transfer, your purchase bandwidth can determine the cost.