The cloudy business case for cloud

A decade ago, the rationale behind adopting a public cloud consumption model was robust.

It allowed us to steer clear of the expenses tied to hardware and software, the arduous task of maintaining these platforms, and made use of computing and storage as a utility. The primary selling point was the savings in operational costs, primarily by evading many capital expenses (CAPEX versus OPEX), and additional benefits of enhanced agility and quicker deployment were like the cherry on top.

Naturally, venturing into new technology is seldom straightforward. And despite our name, the Cloud Community team are just as vigilant for the potential pitfalls of cloud as we are for its advantages. The reality is that there can be several unforeseen challenges, most notably the drop in data centre hardware prices coinciding with an increase in cloud computing service costs.

 

 

This scenario could give CFOs pause, prompting them to reconsider the wisdom of migrating all IT assets to the cloud when the cost advantage doesn't outweigh the migration risks. Present-day business cases are more intricate than they were just a few years ago.

Assessing the pros and cons

Assessing the pros and cons goes beyond merely examining the costs of each deployment model, even with reduced hardware prices. If you base your decisions solely on direct expenses, you may miss out on a significant amount of business value that is more challenging to grasp. Furthermore, if you assess each application and data set solely based on its specific requirements, you might overlook broader strategic considerations.

Do you have applications and data sets with predictable patterns of computing and storage usage, with limited need for rapid scaling? These are ideal candidates for residing on traditional servers that you own and maintain.

We now have examples of companies that initially adopted public cloud providers and later moved back to self-owned hardware. Successful transitions were characterised by well-defined computing and storage needs and predictable demand. These specific patterns capitalise on cost-effective owned hardware and leverage recent price reductions to a business advantage.

Nevertheless, not all applications and data sets fit into this category. The more dynamic the computing and storage requirements for an application or set of applications, the more likely public clouds are the superior choice. Scalability and seamless integration offered by cloud services are vital for such data and computing needs, as well as the ability to rapidly expand and enhance public cloud services with other native offerings.

While there may be a short-term advantage to owning hardware for certain applications, the public cloud often proves more cost-effective in the long run, especially as application requirements evolve and expand. Nonetheless, the amortised costs of traditional on-premises hardware solutions can be more economical. The advantages of using your own servers for computing and storage can diminish rapidly when these resource needs frequently change, which is often the case.

What's the best course of action?

Cloud computing should not be an automatic choice. After carefully considering your business requirements, it's essential to question the merits of any technology solution. As mentioned earlier, there are merits to using resources in your in-house data centre, but also compelling reasons to opt for public cloud providers.

As traditional server prices decline, it's crucial to consistently reassess our objectives for utilising these systems. Questions will persist about the adaptability and integration capabilities of traditional servers with other service types. Some assessments may point to public clouds as the platform that delivers the most value to the business, but that won't always be the case. It's important to keep those evaluations up to date.