Which route should you take?
Everyone wants to operate like a tech company today. Chances are, your business can’t thrive without improving how you do IT, and executives must decide where to house and process their data. Companies like Liberty Mutual are able to enter a new market in just six months and double the average sales rate, while government organizations are defying expectations with rapidly developed and deployed applications across the board from tax collection to war-fighting.
Your cloud strategy is going to be nuanced. A recent Forrester study found that just four percent of organizations run their applications exclusively in the public cloud; 77 percent of organizations are using multiple types of clouds, both on-premises and off-premises.
So do you go the public or private cloud route? It can be a complicated question. Let’s look at some starting considerations.
The low-hanging apps
Most of IT’s budget and attention is focused on what we used to call “off-the-shelf applications”: email and calendaring, collaboration apps, and industry specific software. These applications are often the slow-moving fodder for your cloud strategy. They should be moved to public cloud first.
For example, Gartner expects almost half of all business users to move their core collaboration and communications systems to public cloud by the end of this year, and more than 70 percent of businesses will be substantially provisioned with cloud office capabilities by 2021. Moving these types of applications off-premises seems like an easy win and, more importantly, frees resources to focus on building out larger software development and delivery capabilities, the core asset for any successful digital transformation.
“Comply with regulations, not folklore.”
If you’re collecting user data — location, personal information, credit card information, for example — you have a whole list of compliance issues that will drive your cloud choice. As you sift through various regulations and barriers to decide whether to use a public or private cloud for storing a user’s data, you’ll need to have answers questions like these:
- How do government policies shape our operations and strategies?
- Certain safety measures or auditing points can create huge costs and public cloud solutions might have done the work already. What rules and regulations govern the data you’ll be collecting?
- Do you own the data? What is the geographical definition of ownership — does anyone else share ownership?
You can drown yourself in a soup of industry and government regulations: HIPAA, PCI, and GDPR, just to name a few. But while compliance issues may seem like an mindless productivity blocker understanding why they exist and working with auditors will help sort your business imperatives.
These regulations are aimed at avoiding nefarious uses such as selling personal data to advertisers or stockpiling profiling data to meddle in politics. As Lauren Nelson notes in her recent analysis of public clouds in Europe, the data management needs of GDPR are driving many organizations to reconsider where they store user data. Often, running their software on private cloud affords organizations more control over data.
To “on the other hand” it, there are cases where using a public cloud service is actually better. Payments come to mind; complying with all of the payment handling and tax regulations globally might be easier to achieve with public cloud-based services rather than building it yourself. Handling sensitive documents might also be better outsourced to organizations like Merrill.
Of course, pure public cloud is rarely an option. Retailers, for instance, often have competitive concerns that drive them away from using Amazon Web Services (AWS), or other cloud software companies might not want to utilize Google’s tools.
Pinning Down Technical Requirements
Moving to public cloud infrastructure can sometimes cause more headaches than solutions, but nailing down a comprehensive list of technical requirements will create a good checklist. These include operatibility of different database frameworks, load balancing, licensing ramifications, and bandwidth limitations. For example, Chick-fil-A uses a mixture of private and public cloud to support operations by deploying small Kubernetes clusters in each store to support transactions.
When moving to public clouds, engineering teams lose certain operational controls and often need to re-architect their code. The new runtime environments in public cloud often require new skills. None of these concerns are impossible to solve, but take these costs of change to heart in your economic considerations.
For instance, airlines access an immense quantity of interrelated databases. Searching for fares, transferring tickets, tracking baggage, tracking flights, maintenance, reward programs, booking revenue, partner airlines, integrating with each airport — the number of integrations starts to boggle the mind. An airline probably can’t afford to trust only a public cloud environment to run their business. There are too many moving parts to expect a single vendor to meet all their needs.
Cloudy Costs
Different cloud solutions don’t lend themselves to easy comparisons like new phones do: run down a checklist of features and specs, then weigh against the pricetag. Cloud architectures are too complex and need to be visualized too far forward in time. They’re more like buying solar panels, where the upfront cost hurts, but you’re playing a longer game with the investment. However, you need to be sure you’re staying put (to keep the analogy going) with your strategy, features and hardware, such as servers and an ops team. Those can quickly become painful losses if, in a couple years, you hadn’t assessed the overhead costs correctly.
Yet there are some basic starting points. What features of public cloud would be better than private cloud — and how do you assign real financial value to them? For instance, how useful are machine learning tools in the cloud you’re considering? A retailer could use such services easily to start targeting ads or upselling recommended items, and so they might choose Google’s cloud. Or maybe for regulatory reasons, or because the retailer can do it better themselves, they’ll do this processing on their own, private cloud.
That focus on business outcomes is what should drive your choice of public versus private cloud. It’s all too easy to look at either option based purely on cost, which is the old way of thinking about IT: “how cheap can we get this service?” When IT is one of your core business enablers, the better way to think about it is, “how much money can this service make me?”
In this way of thinking, you focus on what type of infrastructure enables your software teams. You want a platform that focuses on delivery speed so you can start designing better, more productive, and profit driving software. In some cases, this might mean just modernizing your existing, private cloud-based stack. Oftentimes, organizations are operating under five, ten, or even decades old notions of how software should be developed and run. Shifting over to a more contemporary, agile approach can drive dramatic results.
For more detailed models, my old research house, 451 Research, has long studied the question of cloud costs, providing several models and price tracking to figure out which side of the firewall is best across various IT needs.
Seeing Through the Clouds
You have to know what you’re building. That may seem obvious, but as Pivotal consults with organizations of all types, you’d be surprised how many engineering teams build in the dark. We designed Pivotal Cloud Foundry to support both private and public cloud, giving you maximal optionality when planning your cloud strategy. Even if a business needs to change providers for certain applications, the development and management layers atop it will remain consistent
We constantly remind our customers to ask the basic questions. The answers evolve.
How much traffic will the application get? Will it only be used internally? Who affects the load? What data handling and process regulations do you need to follow? Will the application branch out to other areas of the business? If it touches the public — will it be mobile? What are your long term plans for running your own data centers? What machine learning applications do you need? How are you going to spread out the computing geographically?
The questions don’t end! In a point of transition like we’re seeing in IT, it’s good to err towards maximizing flexibility to give yourself the most options in the future as needs change. Over the next five years (if not longer!) businesses will experiment with new strategies and business models, and they’ll need an IT partner who’s equality deft and ready for whatever exciting adventure comes next.
Demystifying the Public or Private Cloud Choice was originally published in Built to Adapt.
