Industry data from Uptime Institute and 451 Research evidence a rapid rate of cloud computing adoption for enterprise IT departments. Organizations weigh cloud benefits and risks, and also evaluate how cloud will impact their existing and future data center infrastructure investment. In this video, Uptime Institute COO Julian Kudritzki and Andrew Reichman, Research Director at 451 Research discuss the various aspects of how much risk, and how much reward, is on the table for companies considering a cloud transition.
While some organizations are making a “Tear down this data center” wholesale move to cloud computing, the vast majority of cloud adopters are getting there on a workload-by-workload basis–carefully evaluating their portfolio of workloads and applications and identifying the best cloud or non-cloud venue to host each.
The decision process is based on multiple considerations, including performance, integration issues, economics, competitive differentiation, solution maturity, risk tolerance, regulatory compliance considerations, skills availability, and partner landscape.
Some of the most important of these considerations when deciding whether to put a workload or application in the cloud include:
1. Know which applications impact competitive advantage, and which don’t.
You might be able to increase competitive advantage by operating critical differentiating applications better than peer companies do, but most organizations will agree that back office functions like email or payroll, while important, don’t really set a company apart. As mature SaaS (software as a service) options for these mundane, but important, business functions have emerged, many companies have decided that a cloud application that delivers a credible solution at a fair cost is good enough. Offloading the effort for these workloads can free up valuable time and effort for customization, optimization, and innovation around applications that drive real competitive differentiation.
2. Workloads with highly variable demand see the biggest benefit from cloud.
Public cloud was born to address big swings in demand seen in the retail world. If you need thousands of servers around the Christmas shopping spree, public cloud IaaS (infrastructure as a service) makes them available when you need them and return them after the New Year when demand settles down. Any workload with highly variable demand can see obvious benefits from running in cloud, so long as the architecture supports load balancing and changing the number of servers working on the job, known as scale-out design. Knowing which applications fit this bill and what changes could be made to cloud-enable other applications will help to identify those that would see the biggest economic benefit from a move to cloud.
3. Cloud supports trial and error without penalty.
Cloud gives users an off switch for IT resources, allowing easy changes to application architecture. Find out that a different server type or chipset or feature is needed after the initial build-out? No problem, just move it to something else and see how that works. The flexibility of cloud resources lend themselves very well to experimentation in finding the perfect fit. If you’re looking for a home for an application that’s been running well for years, you might find that keeping it in on-premises will be cheaper and less disruptive than moving it to the cloud.
4. Big looming investments can present opportunities for change.
Cloud can function as an effective investment avoidance strategy when organizations face big bills for activities like data center build-out or expansion, hardware refresh, software upgrade, staff expansion, or outsourcing contract renewal. When looking at big upcoming expenditures, it’s a great time to look at how offloading selected applications to cloud might reduce or eliminate the need for that spend. Once the investments are made, they become sunk costs and will likely make the business case for cloud transition much less attractive.
5. Consider whether customization is required or if good enough is good enough.
Is this an application that isn’t too picky in terms of server architecture and advanced features, or is it an app that requires specific custom hardware architectures or configurations to run well? If you have clearly understood requirements that you must keep in place, a cloud provider might not give you exactly what you need. On the other hand, if your internal IT organization struggles to keep pace with the latest and greatest, or if your team is still determining the optimal configuration, cloud could give more flexibility to experiment with a wider range of options than you have access to internally, given a smaller scale of operations than mega-scale cloud providers operate at.
6. Conversion to cloud native architectures can be difficult but rewarding in the long run.
One benefit of cloud is renting instead of buying, with advantages in terms of scaling up and down at will and letting a service provider do the work. A separate benefit comes from the use of cloud native architectures. Taking advantage of things like API-controlled infrastructure, object storage, micro-services, and server-less computing requires switching to cloud-friendly applications or modifying legacy apps to use cloud design principles. If you have plans to switch or modify applications anyway, think about whether you would be better served running these applications in house or if it would make sense to use that inflection point to move to something hosted by a third party. If your organization runs mostly traditional apps and has no intention of taking on major projects to cloud-enable them, you should know that options and benefits of forklifting them unchanged to cloud will be limited.
7. Be honest about what your company is good at and what it is not.
If cloud promises organizations the ability to get out of the business of mundane activities such as racking and stacking gear, refreshing and updating systems, and managing facilities, it’s important to start the journey with a clear and honest assessment of what your company does well and what it does not do well. If you have long standing processes to manage efficiency, reliability and security, have relatively new facilities and equipment, and the IT staff is good at keeping it all running, then cloud might not offer much benefit. If there are areas where things don’t go so smoothly or you struggle to get everything done with existing headcount, cloud could be a good way to get better results without taking on more effort or learning major new skills. On the other hand, managing a cloud environment requires its own specialized skills, which can make it hard for unfamiliar organization to jump in and realize benefits.
8. Regulatory issues have a significant bearing on the cloud decision.
Designing infrastructure solutions that meet regulations can be tremendously complicated. It’s good to know upfront if you face regulations that explicitly prevent public cloud usage for certain activities, or if your legal department interprets those regulations as such, before wasting time evaluating non-starter solutions. That said, regulations generally impact some workloads and not others, and in many cases, are specific to certain aspects of workloads such as payment or customer or patient identity information. A hybrid architecture might allow sensitive data to be kept in private venues, while less sensitive information might be fine in public cloud. Consider that after a public cloud solution has seen wide acceptance for a regulated workload, there may be more certainty that that solution is compliant.
9. Geography can be a limiting factor or a driver for cloud usage.
If you face regulations around data sovereignty and your data has to be physically stored in Poland, Portugal, or Panama (or anywhere else on the globe), the footprint of a cloud provider could be a non-starter. On the flip side, big cloud providers are likely already operating in far more geographies than your enterprise. This means that if you need multiple sites for redundancy and reliability, require content delivery network (CDN) capabilities to reach customers in a wide variety of locations, or want to expanding into new regions, the major cloud providers can extend your geographic reach without major capital investments.
10. The unfamiliar may only seem less secure.
Public cloud can go either way in terms of being more or less secure than what’s provisioned in an enterprise data center. Internal infrastructure has more mature tools and processes associated with it, enjoys wider familiarity among enterprise administrators, and the higher level of transparency associated with owning and operating facilities and gear allows organizations to get predictable results and enjoy a certain level of comfort from sheer proximity. That said, cloud service providers operate at far greater scale than individual enterprises and therefore employ more security experts and gain more experience from addressing more threats than do single companies. Also, building for shared tenancy can drive service providers to lock down data across the board, compared to enterprises that may have carried over vulnerabilities from older configurations that may become issues as the user base or feature set of workloads change. Either way, a thorough assessment of vulnerabilities in enterprise and service provider facilities, infrastructure and applications is critical to determine whether cloud is a good or bad option for you.
Andrew Reichman is a Research Director for cloud data within the 451 Research Voice of the Enterprise team. In this role, he designs and interprets quarterly surveys that explore cloud adoption in the overall enterprise technology market.
Prior to this role, he worked at Amazon Web Services, leading their efforts in marketing infrastructure as a service (IaaS) to enterprise firms worldwide. Before this, he spent six years as a Principal Analyst at Forrester Research, covering storage, cloud and datacenter economics. Prior to his time at Forrester, Andrew was a consultant with Accenture, optimizing datacenter environments on behalf of EMC. He holds an MBA in finance from the Foster School of Business at the University of Washington and a BA in History from Wesleyan University.