5 Reasons to Own Your Cloud
February 2nd, 2012 By: Industry Perspectives
Kent Christensen is virtualization practice manager for Datalink, where he consults with both Fortune 500 and mid-tier customers on storage consolidation, virtualization, cloud strategies and technologies. He blogs about these issues.KENT CHRISTENSEN
Cloud computing is gaining popularity. Yet, we know that only about 25% of IT teams are actively involved in cloud computing within their organization. Why the disconnect? Many IT people tell me they are interested, but just don’t have time to explore what cloud computing could mean to their IT organization.
The best advice I can give them comes from American Revolutionary Thomas Paine, himself:
“Lead, follow or get out of the way.”
Now’s the time to move forward with plans for your own internal, private cloud. If you don’t, you may find yourself — and your IT organization — left behind.
Migrating to Cloud
Here are five reasons to move to private cloud computing:
1. You need to do this.
Today’s economic environment will continue to be challenging for IT organizations. Companies are looking at ways to trim IT budgets and staff even further. Many business owners and C-level execs are also actively seeking other ways (outside of traditional IT) to run their applications.
Some public cloud successes include:
- Software as a Service (SaaS) or Business Process (BP) services. These include CRM applications like Salesforce.com, outsourced e-mail services or payroll processing applications from ADP, PayCom, etc.
- Low-cost, agile Web services for everything from block storage to database or virtual server platforms. (Think Google or Amazon Web Services).
- Consumer cloud examples like the highly popular iCloud.
You need to look at the appealing attributes of cloud computing and determine how to offer similar functions within your own IT firewall.
2. You can do this!
You may be closer than you think to private cloud operation. You’re likely running virtual servers, which are backed by data storage. Many may also be using advanced virtualization, where resources are virtualized across servers, network and storage.
Many attributes derived from advanced virtualization closely match those in a private or public cloud. These include:
- Added Efficiencies
All you need is the vision, commitment and IT leadership needed for a cloud initiative. This includes getting cross-functional IT teams (server, storage, network and application support) to work together.
3. Your cloud will be lower cost to begin.
Building your private cloud will likely be 25 percent cheaper than the cost of using an external cloud service provider. Cloud providers need to buy much of the same infrastructure as you do, plus they need to make a profit.
Select cloud offerings (SaaS or BP services) may be cheaper to outsource. But what about the other specialized or security-sensitive applications you run in your data center? I hear from at least 10 companies who say they want to outsource 40 percent of their IT infrastructure ‘to the cloud’ to save costs. When we start asking the tough questions, most realize it doesn’t make sense at this time.
One company planned to roll out a social media application. They thought a public cloud provider would be a highly affordable fit. The provider’s monthly bill; however, showed the company it could run more efficiently and cost-effectively by running the application in their own internal cloud. Planned expansion multiplied the benefit of internal vs. external. This was true even when compared to the cheapest cloud provider.
4. Your private cloud/infrastructure can be shared amongst business applications.
Technology from external cloud providers needs to mature before it can offer the shared infrastructure and level of security, delivery, compliance and qualities of service required for many enterprise IT applications. Most external cloud providers may even require significant application rewrites.
Once you offer similar cloud attributes on your private infrastructure, internal business owners should find your internal IT services more appealing. These are services more closely aligned to your corporation’s internal systems and unique goals. Business application owners can also get easy access to the shared infrastructure while limiting their risk.
5. He who controls orchestration, controls the cloud.
As you move ahead with private cloud computing, you’ll need to learn how best to manage the environment. I summarize this as orchestration. It covers everything from on-demand resource provisioning to life-cycle management of virtual machines. It can even cover which applications should be outsourced to an external cloud provider.
Eventually, you may be called on to manage private clouds, public cloud services or a hybrid scenario (a mix of both private and public cloud services which you’re more than likely to move toward).
Many vendors are willing to step into this role and orchestrate your IT infrastructure for you. As you move ahead with private cloud computing, you’ll have the option to retain control of orchestration yourself.
You want to do this so that you control how much it costs to run an application internally versus outsourcing it. You want to retain control of the application and its resources, even if you choose to outsource peaks in activity to a cloud provider. You want to still be able to compare the cost of your raw materials to what the cloud service provider offers. Orchestration allows you to:
- Determine the best mix of internal and external resources
- Obtain bids surrounding Infrastructure as a Service (IaaS) based on cost/performance characteristics, versus just the need to outsource an application
- Retain ultimate buying power and control
So, there you have it. Five reasons to own your private cloud (and many more reasons not to delay in getting there).
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#2 is off by quite a bit. 25% is way low.. the “get outta public cloud” migration projects I have worked on pay for themselves in less than 6 months and the cost savings is much higher than 25% depending on your time horizon (first year will vary since the cost of buying the infrastructure up front is quite a bit incremental upgrades after is minimal).
Some of the ROIs from some cloud providers would of paid for themselves by doing it ourselves in less than 1 day. My best example is one big provider wanting to charge a $3M install fee for something I could buy for $700-800k (in both cases tier 1 hardware with 4 hour on site support etc)
SEHPosted February 2nd, 2012
(full disclosure – I work for a Service Provider.)
The problem with comparing pure HW costs that an SP would base the deal on is a bit problematic. Finance options and managing risk for clients and making a profit are indeed a cost driver, but the ability to leverage a larger bench and having the security of expertise always has a element in the build versus buy evaluation. My experience is while public clouds are expensive when compared to pure HW/SW purchases – an OPEX model is attractive.
With respect to IaaS, control is primarily cultural. If I were selling services to your company and wanted you to insource – I too would be selling control. It’s easy to sell. Corporations are held accountable for compliance, regardless of whether they insource or outsource. To say that insourcing helps ensure better compliance is misguiding at best – the policies and procedures as well as adherence to those procedures is paramount…the infrastructure is 6′s.
Cost is not simply a comparison of service provider MRC to procurement of Hardware and Software. The only adequate cost comparison is TCO, which typically includes 50- 70% labor, the largest component when you consider 24 x 7 management, training, turnover and “loaded” employee costs.
Up-time is a separate matter – only the largest companies have what it takes in terms of Power and Internet. This comes at a high cost – but it should be considered in the equation instead of treating it like a “sunk” cost. This build-your-own model has somehow become “acceptable bloat”, much like internal staffing bloat with low utilization – much like the servers your are trying to consolidate Insourcing (or what you call control) is like adding coal cars to the freight train of money. Once you get it going, it’s hard to stop.
I keep hearing “private” cloud. Call it what you want, but the term was coined by VMware(primarily) to sell more licenses and be associated with the movement regardless of whether you do it internally or externally. The primary reasons VAR’s recommend you do it yourself is also self-serving in many ways.
I concede that if you are working with Fortune 500 clients, or where data (specifically the connectivity/latency thereof) requirements of the application make it unfeasible, then you are getting to the heart of the matter, but for many applications I just can’t take the “5 reasons” at face value.
I welcome spirited and professional comments.
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