The great IT debate about how best to leverage the benefits of cloud computing continues. Is it better to own or rent? The answer is, “it depends” on what you’re evaluating and your specific requirements. Rent to own furniture…I’ll save you the trouble. Don’t do it. With Cloud, businesses like yours need to look at what is the best fit for you – it is economics as well as strategic focus. And if you’re doing your homework right, it’s not a simple process.
Not only is it difficult to accurately quantify the true cost of cloud infrastructure from a provider versus building it yourself, you also need to assess your reasons for buying cloud. Most don’t make the move to cloud for anticipated savings. Most move for business reasons such as agility, scale, or simply “getting it done faster.” According to some stats, over 46% see cost savings as one of the benefits of cloud computing, while 43% see efficiency as a benefit.
So, how do you get there from here? Well, unfortunately Apple hasn’t developed the GPS app for the “road to cloud,” but give them a few months and they might.
If you can’t wait for the app, however, then you need to start by asking the right questions both internally as well as of any potential service provider. And listening intently to the answers.
Reaping the benefits of cloud computing: Facilities considerations
Where to start? How about with the “F” word? Yeah, I’m referring to “facilities.” If you’re like most companies, you probably already have some infrastructure, but is it enough? How do you accurately predict growth? The operative word being accurately. Then several more questions fall out of that:
- How do you make sure you have your infrastructure on-time? Not only do you need to know how much equipment, but you need to have it on hand to scale.
- What are the costs and what is the time to build out more data center space?
- What is the cost associated with that capital and what is your expected payback time? Payback is usually 5 – 7 years and it can take up to 15 months on average to build a data center. Average electricity costs can represent 15 – 20% of the cost of running a data center. Ahhhhh…THIS is why cloud is so attractive. Still, it needs to be weighed against your needs.
- Do you have security or performance concerns that need a more dedicated environment?
- Do you already have investments made in infrastructure that you want or need to leverage?
- Do your capacity requirements justify investing in your own private cloud?
So we’ve briefly touched on facilities. Now how about people?
Reaping the benefits of cloud computing: Labor cost considerations
How about labor costs? The cost of a systems administrator can run upwards of $120K. You have to factor in salary, benefits, experience, market rate, etc. And by the way, that’s the cost for one person. What if you need operations to be 24/7? The demand for information to be available around the clock is only increasing. This is not to say that if you go to cloud, you can fire your system admin. Nope, that person is critical. Just try to figure out how to upgrade your critical ERP system or figure out how to access critical database information without them. Utilizing a service provider simply frees up sys admins and DBAs from the day-to-day infrastructure management to focus on important business projects. I know you have them – business units demanding you get that new application on line yesterday, upgrade their supply chain management infrastructure, deploy a new offering, address the growing demands from other business units…and on and on.
Reaping the benefits of cloud computing: Storage considerations
What about storage? Cloud storage is an option being considered to allow you to replace storage-related capital expenses. You need to examine the different pricing models – what it would cost for you to build dedicated storage and perform the backups yourself compared to service providers’ monthly storage costs. Also factor in what other costs are involved such as:
bandwidth costs and copy /duplication costs, etc. Bandwidth is tricky as it relates to storage (i.e., amount of data actually transferred between servers and storage). This can be unpredictable, so make sure you understand how workloads affect storage and evaluate how much storage you anticipate consuming. HINT: There is a reason for the term “big data” and it’s only getting bigger.
Cloud providers build storage infrastructures from components and factor in one-time software charges, installation fees, and annual hardware and software maintenance fees as well as the cost to design, development, testing and maintain those infrastructures. Their costs shrink with the scale.
There are many other factors that haven’t been highlighted here that will also impact which benefits of cloud computing you end up focusing on. The main point is to take a good look at the costs (ALL of them) and the goals (agility, flexibility, increased uptime, etc.). Accurately assess what it would take for you to do it in house versus outsource it to a service provider. It is also not an “all or nothing” proposition.
Whether you decide to build it our buy it, if it is cloud they will come. Download our infographic, “Cloud: Do-It-Yourself or Outsource?” and find out which cloud solution makes sense.
Visit SunGard Availability Services to learn about additional benefits of cloud computing.