We have the privilege of seeing a lot of new and exciting technology that can give strategic benefits. Our team also has the opportunity to help clients evaluate, select and implement those strategic technologies. There is much buzz and hype around cloud technologies. Like any technology, there are benefits and there are risks.
Cloud technologies leverage the benefit of Internet access to provide anywhere, anytime access on any device. There are notable benefits when collaboration is needed or when work needs to be performed outside of your office. You can choose to use public cloud offerings or build your own private cloud starting with your own computer network. It is wise to reflect on the benefits and the risks of cloud technologies before choosing one strategy over another. In this short article, it is not possible to name all of the benefits, risks or products. However, we will provide some high level guidance that you can use as a starting point in your analysis.
The Benefits
1) Collaboration – If you need to work on documents at the same time as your clients or customers, you can use web technologies such as portals to share documents.
2) Remote and web based access – If your solution is implemented correctly, your team members should be able to work remotely accessing most, if not all, of the key technologies from your office. Depending on your remote connection speed, you may have similar performance to being in the office.
3) Public Cloud offerings have the following attributes:
a. Data center advantages – since public cloud offerings are built in more sophisticated data centers they inherit the advantages of the data center: redundant power supported by backup generators, redundant communication lines, physical security and controls, and a strategy to backup and prepare for a disaster. These strategies don’t always work, but will probably be more advanced than what you would do for your business.
b. Software as a Service (SaaS) based applications that run in a browser – Over the last ten years or so there have been new generation applications built that run in a browser. Some of these applications solve very specific problems, and can be implemented quickly. Sometimes the applications are not robust enough to solve the business problems.
c. Some maintenance is performed by the supplier – Most public cloud vendors take the responsibility of updating the software, eliminating this task from your in-house IT personnel. However, other maintenance issues still fall on internal personnel. For example, hosted email is very popular. The sales argument is that there is less maintenance. In practice, this is generally not true.
d. Exposure of confidential data under provisions of the Patriot Act – all public data centers must provide data without disclosure or notification to the owner of the data under the Patriot Act. If you are dealing with non-confidential data, this is probably less of an issue, but if confidential information is involved, you could be responsible for being the source of this security and confidence breach.
e. Possible lower cost of ownership for < 10 users – The cost of servers, storage and implementation services for less than 10 people, spread over 5 years is around $500-750/month. You will probably have some additional, intermittent costs for maintenance. A typical cloud hosted environment will be around $100/user/month minimum.
4) Private Cloud offerings have the following attributes:
a. More control – since the systems are in-house and you own them, you have the choice of what is done with the systems.
b. Speed – internally, it is clear that performance will be quicker since there are no communication slowdowns. Even with your remote users, you should be able to achieve acceptable remote speeds without excessively spending on communication lines.
c. Flexibility – again, since you own the systems, you have the choice of adding applications, delaying replacement purchases and selecting different applications.
d. Less need for workarounds – when you work in the cloud, you are restricted by your hosting vendor’s choices or limited by the applications they support. If you have your own private cloud, you make the choice about what is supported.
e. Integration is easier and more complete – If you are trying to mix and match solutions, which is called a hybrid solution in the computer industry, you will encounter limitations on what can be integrated. For example, if you want your phone system integrated to Microsoft Exchange and you are hosting your Exchange email, you can expect difficulty of integrating your phone system.
f. Probable lower cost of ownership for >10 users – the economics are similar to above. In-house systems have relatively flat rates for server, storage and installation. Scaling from 50 to 100 or 200 users make little difference in the private cloud hardware costs and have software license cost increases.
The Risks
1) Security – if your data is in the cloud, the cloud vendor will be trying to protect the data to protect their reputation. Unfortunately, you have no control over the data center’s security. Hackers target larger data stores because they know if they can get through the defenses, they will be rewarded with more data.
2) No options on resolving down time – Public Cloud solutions have several variables in performance, most of which are beyond your control. Included are: data center speeds, application inefficiencies, communication line speeds or bottlenecks at the data center, internet speeds between the data center and your office, and constraints in line speeds in your office from technology availability, firewall misconfiguration or the number of users for the amount of bandwidth purchased.
3) No single point of responsibility “one throat to choke” – Public Cloud vendors can’t control speeds between their site and your site. Sometimes they can’t control the data center where they are hosting their applications. Because multiple providers are involved, there is not a single point of contact to correct your issues.
4) Public Cloud offerings have the following disadvantages:
a. Speed is outside of your control – you can only control your internet speed, firewall and internal network speed. For everything else, you are at the mercy of other providers.
b. Increased operational costs for more users – as you scale up, your costs increase. This could be an advantage if you frequently scale down, too.
c. A permanent lease (vs. buy = capital expense) – Most of us understand that leases have costs to provide profit for the lease provider. Whenever you enter a Public Cloud arrangement, you have entered a permanent lease with no residual value.
d. Outages can and will occur – You must have manual procedures or a plan to compensate for this.
5) Private Cloud offerings have the following disadvantages:
a. You need access to IT expertise to implement correctly – some IT providers do not have the expertise to build Private Cloud access well.
b. You need to invest some time to understand your options – Because you have fewer limitations, you now have more options. You will have to do enough research and understand your needs well enough to make an informed decision.
c. Upfront capital expense – You will have to have enough capital to make the acquisition, or will have extra costs to finance the purchase since all of the infrastructure must be acquired up front. Additionally, it is not easy to scale back.
d. You need a team that can support this during your mission critical hours, possibly 24×7 – You may wind up with extra expense to get extended support. This should be considered as part of your expense when contrasting Private Cloud with Public Cloud. Remember that many Public Cloud offerings will still require some level of support from your own IT team or contractors.
Our NMGI team understands and can explain the benefit of both public and private cloud applications. Further, our team can implement both Private and Public Cloud solutions. Contact us today to discuss your business needs and the options available to address those needs.
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