Everyone is talking about Cloud but what can it really do for your business? The answer is “it depends”. The promise of the cloud is that it takes the focus off of technology and systems and places it on business goals and outcomes. Cloud conversations need to be taking place with business and financial leaders, as well as IT. IT’s role needs to move up the value chain so that they are participating in solving business problems and not implementing technology.
Table 1 is a comparison of on-premise IT solutions verses the same solution provisioned with a Cloud provider or publisher. This should give you a sense of why people are getting excited about the cloud!
Cloud solutions move the cost to a monthly or annual recurring Operational Expense instead of a Capital Expense. This is beneficial to most companies due to being able to pay as they go instead of utilizing large up-front cash investments. If the business needs change, they can upscale, downscale, or change solutions with little to no cost penalty. Capital expenditures require a large upfront cash investment and you are stuck with the cost even if business needs change.
The cost to procure an Internal IT project is only the beginning. There will be ongoing investments in facilities, power, backups, cooling, and staffing. Cloud solution costs are more predictable and you pay for exactly what you use and nothing more.
Internal IT delivered solutions have to be designed for peak usage which means that most of the time they are under-utilized and sometimes they may need more capacity than what they are capable of. Adding resources for growth can be time consuming and unpredictable. Cloud solutions can scale for peak demands and “give back” resources under low utilization periods.
Provisioning time for a server can be several days to several weeks depending on how fast a company’s internal procurement and implementation processes are. Spinning up a server in the cloud can be done in minutes.
The skills required to deploy a cloud solution are usually low when compared to the skills required to build and manage an application in house. For an internal IT solution, you will need system administration and application specific skills. For a cloud solution you can hand it all over to the provider or you may need some migration services.
Cloud providers have experienced highly publicized outages but many customers did not have an outage if their solution was properly engineered in the cloud for high availability. A single point of failure in the cloud is just as problematic as a single point of failure in private data centers. However, most cloud solutions are highly automated which reduces the highest failure item in the data center – humans! It is important to look at all the advantages of public cloud solutions and not just deployment costs. Public cloud will lose in a lot of TCO models since many companies have not quantified the total costs of maintaining infrastructure, or they will take advantage of sunk costs in data center operations and facilities. However, there are many drivers which make considering cloud solutions as alternatives to internal IT delivered projects, an important part of your company’s strategy.