As any business owner knows, there are an infinite number of tools available to drive success. From software to hardware, leaders have to have a long-term vision with short-term acumen. One of the newest tools on the street is “the cloud.” Moving business functions to the cloud is almost always a good idea, but there is no “one cloud fits all” solution. It’s better to think of it as a tool, rather than a destination. And just like every new tool in the market, business surrounding it is booming: a report from Forrester in November 2019, the combined global market size of public cloud services was expected to reach $299.4 billion in 2020 and continue to grow at a compound annual growth rate of 29.2% in 2019-2025.
Moving to the cloud isn’t just a one-time move, however. Taking the view of simply uploading all on-premise solutions to the cloud is not the best way forward. With all the value that the tool brings, it also highlights new challenges and opportunities for business leaders. Companies must understand what combination of cloud operations is best for their business and processes. The best way to approach this is to form a long-term perspective and develop an “above the cloud” strategy. Understanding how private, public, and hybrid cloud options functions differ and how they are used in the real world, is key to finding the successful option each unique business. The key is knowing what functions should reside, for your business, in either, or, or both
The cloud is vast
According to a study by Flexera, more than 50% of businesses migrated to the cloud in 2020. Everyone is moving to the cloud—regardless of business type. The benefits in security, scalability, and cost-savings, make it an attractive option for business owners. Once the business has decided on cloud services, they’re forced to determine which type of cloud solution is best for them: public, private, or hybrid.
1.Public: The unlimited size of the public cloud means a company can scale capacity and computing power either up or down in just minutes in congruence with business needs. The presence of multiple public cloud providers on the market like Microsoft Azure and Amazon Web Services, healthy competition drives innovation to improve the quality of platforms and lower prices.
The initial Capital Expense (CAPEX) costs are nominal with public cloud use, with nearly immediate access. The simplicity of setting up an account and attaching a credit card, is clearly the most attractive to the majority of businesses new in their cloud journey. There are costs relative to resource size, however, which leads many forward-thinking businesses to weigh other options.
2. Private: We all know the adage that owning is better than renting, which is why many businesses begin exploring private cloud options. According to a 2020 study, enterprises spent $72.9 billion on private cloud solutions in 2020. The private model offers a more customized set-up, capable of being configured to a particular business—yet it requires much higher CAPEX expenses.
By using a private cloud, businesses can maintain control of all of their data—which is often necessary for regulatory compliance like in the finance or commodity trading industry. With flexibility and guaranteed resource availability, the increasing number of data sets that businesses must maintain can more adequately store. However, software licenses must be purchased, along with internal team development and maintenance, can make the economics of the private cloud far too high.
3. Hybrid: A hybrid cloud solution’s architecture relies on using the best of all worlds– on-premises infrastructure, private cloud services, and a public cloud. As we all learned with the global pandemic, the world can change fast, and a hybrid solution provides the most agile platform for a business. Being able to change and adjust capabilities at scale—quickly—is what makes a hybrid strategy the fastest growing enterprise option.
Not all information belongs on the cloud, but having access to this information available in on-premise data centers, alongside the data that is secured in both public and private cloud solutions, is what makes the hybrid solution one of the strongest. With big data processing and changing workloads, moving to the cloud can be done at the pace that works for the company.
Moving and sustaining business
Understanding how costs affect functions must be considered to decide on the right cloud path. The cost of operating in the cloud as well as transfer costs are important to consider. Operating costs (OPEX) are often higher than originally expected, and OPEX and CAPEX operating costs have different trajectories, so both need to be factored into the equation. Total cost of ownership (TCO) reduction is what drives most organizations to optimize their cloud platforms but all tool adoptions require a variety of considerations—many of which small and medium businesses aren’t knowledgeable enough to make on their own.
Many businesses don’t have the knowledge and experience to manage a private cloud solution themselves, nor do they have the budget to implement a new staff—which makes them resistant to utilizing private cloud solutions to their full potential. Partnering with service managers enables businesses to have experts assist with deployment and maintenance, all while using the best of all platforms with a hybrid solution.
The move to the cloud isn’t going to stop—it’s only going to keep moving and evolving. The best way to make sure that a business keeps up is by relying on expertise from those in the field.
(The author Michael Norring is CEO, GCSIT and the views expressed in this article are his own)