Should Your Organization Even Be in the Cloud?

There’s been tremendous hype over the past several years around how the cloud can unlock significant value creation for organizations of all types. Add to this the big moves and investments made in the hyper-scaler market from AWS, Microsoft and Google; it’s no surprise many CIOs are driving their organizations toward broad adoption.

In the first article in this series, we examined how to tackle out of control cloud cost. With cloud repatriation, which is the act of re-homing workloads back to private or colocation datacenters on the rise, it’s worth a quick review of the fundamental question: When does cloud NOT make sense?

When Cloud May Not Make Sense For Your Enterprise

  • “We’re getting out of the datacenter business” – This at best is a specious motivation; a phrase marketed and popularized by MSPs trying to sell services. If you manage an application portfolio outside of SAAS products, you’re “in the datacenter business.” For years cloud providers used the utility analogy to describe cloud services, as if you just plug your business into an outlet on the wall and pay for what you use. Anyone who’s deployed and managed IAAS platforms will tell you that analogy is broken. The technologies and challenges change, but you’re still managing “the datacenter” whether it’s AWS or an Equinix colocation. You’re just trading managing hardware support and VMware clusters for managing Terraform, AWS config and Cloudwatch. The effort didn’t disappear, it just changed complexion.
  • Your workload is mainly static and lives on operating systems (EC2) – This is a workload that was either “lifted and shifted” or started on cloud at a small scale and then just kept growing over time. At some point, you’ll likely be paying more to host this workload than DIY and getting little additional value out of cloud computing. If your monthly bill is north of $50K per month and a high percentage of that spend is EC2, EBS and S3, you could almost certainly save money by moving to a private datacenter.
  • Your architecture means you’ll get nickel and dimed with network transit charges – Cloud is like a roach motel for data. You can push as much as you want to the cloud for free, but pulling it back out will cost you. Understand this characteristic and other usage sensitive structures and boundaries before going in, because they can add up fast at scale.

When Does Cloud Make Sense?

Public cloud is a fabulous tool in the arsenal of modern IT capabilities and services. But like any tool, it isn’t perfect for every situation. Here’s some of the areas where you’re almost certain to get maximum ROI:

  • Getting to value quickly – The toybox of managed services on public cloud is hard to beat when agility is the most important thing. Need a service? There’s an API for that!
  • Geographic reach – Want to stand up infrastructure in a new geography but can’t accurately forecast your needs or scale, or don’t have the time to deal with the challenges of setting up your own datacenter infrastructure?
  • Workloads are ephemeral – You either have seasonal spikes, or periodic bursty needs. Don’t buy for the peaks. Rent them. Cloud can offer significant value when you need varying amounts of capacity depending on business demand. Some applications are easier to hybridize than others however, so consult your architecture team before you plan to add cloud bursting to your IT portfolio.
  • Op-ex is critical – If you need to keep your cash in reserve, cloud provides a pay-as-you-go operating expense and thus can be an attractive model to manage and balance IT expenditures in a smart way. If this was your only motivation however, you might fare better with some of the available MSP hosting options on more traditional technologies.
  • Getting started with ML or AI – Public cloud providers offer advanced machine learning frameworks and services that can be more efficient than setting up in-house resources. This can be an essential capability to power nascent AI use cases that you hope to see success around, letting you realize the value while you rationalize what’s best at scale.

As we continue this series, our intent is to provide you with knowledge and validation around when and how to consider cloud computing and achieving cost savings to gain maximum value from it. In this piece, we wanted to paint an objective picture of when and when not to pursue the cloud as a hosting model, so that you can better assess what’s right for your organization today and into the future. I look forward to your thoughts and views on this topic!

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