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Summary:

When it comes to the debate on public versus private clouds or commodity versus legacy IT, there seems no room for nuance. So, while cloud and commodity IT are the way of the future, private cloud and legacy IT are here to stay.

It was the best of times, it was the worst of times. It was the age of clouds, it was the age of legacy IT, it was the epoch of commodity compute, it was the epoch of expensive private clouds, it was the Season of Amazon, it was the Season of IBM, it was the spring of agility, it was the winter of security risks, we had everything before us, we had nothing before us, we were all going to change our paradigms, we were all going to resist the change — in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.

Charles Dickens (who may be rolling in his grave) was right. When it comes to the debate on public versus private clouds or commodity versus legacy IT, there seems to be no room for nuance. So, while cloud and commodity IT are the way of the future, private Cloud and legacy IT are here to stay.

Underlying IT strategy considerations (What’s good for you)

Cloud computing is supposed to save us money, and most would argue that it can. Cloud computing is also supposed to provide agility and flexibility in how you deploy and manage your IT solutions, enabling improved business capabilities. The problem is that depending on what you’re doing and when you’re doing it, saving money could be the only reason for adopting or not a reason at all.

If savings was the motivation for moving services to the cloud I might argue that depending on the depth and breadth of adoption you could be using the wrong decision drivers. In other words, how often are major shifts in IT done with savings in IT as the “why”? Savings is the outcome of the “why.”

Personally, I always look for ways to make IT more cost effective and efficient, but not at the expense of real progress. If you’re spending your time focused on cost savings and efficiency as the why then you’re likely missing greater opportunities for adding business value. As I’ve said before, you must get away from thinking of IT as a tool to use to reduce the cost of IT.

How to know if the public cloud is your best bet.

  • Limited exposure to heavy infrastructure investments like mainframes and enterprise applications
  • IT staff are more likely to have been brought up in the days of rapid development, virtualization automation and services on demand
  • More accepting of risk to availability or supportability of your environments (more open to “open source”)
  • In a smaller business there tends to be greater flexibility and agility in decision making
  • Enterprises that have new application requirements should look at all options (SaaS, Public Cloud, Private Cloud, etc.). Time to market, skills and costs should be the deciding factor, not dogma.
  • The above characteristics lend themselves to allowing a company to go whole hog into a new IT strategy and to accept risks where more established enterprises can’t or won’t. Generally smaller companies and younger companies will take this risk.
  • The staff is much less likely to feel emotional attachment to a SAN or to working on servers and are therefore less likely to feel threatened by looking to an external provider.

So who wants to stick with private cloud?

  • Companies with a decade plus of investment in IT staff, infrastructure and enterprise applications
  • Those in industries where regulatory and financial controls are stricter, more comprehensive and carry greater risk when failure occurs
  • CIOs working at places where business change takes much longer and acceptance for risk to the status quo is much lower
  • Places that have dedicated staffing for very specific roles, which makes it harder to unify quickly around a major change to infrastructure or applications
  • Businesses with a much larger infrastructure base, allowing for deeper staff knowledge and improved economies of scale

The characteristics of a large enterprise mean that many investments in IT have consequences that are measured in the $100s of millions. Any short term investment in hardware or private cloud solutions is immaterial to the greater opportunity for the company. This doesn’t mean that a large enterprise can’t or shouldn’t look to use public cloud where it makes sense, but it does mean that they don’t have to in order to be competitive. In the end, very few companies will ever fail because their infrastructure cost area little higher. However, they could fail if their infrastructure doesn’t protect the business or respond appropriately to need.

Your mileage may vary

Enterprises can’t and won’t just dump expensive and critical legacy environments so they can move something to public or private cloud. Smaller businesses can now adopt technologies, applications and distributed infrastructure in ways that were formerly only available to much larger organizations. We will have a noisy cloud technology market for some time to come and the split of cloud computing models means that there will be room for everyone.

So depending on where you sit the market could look great or scary. It could look like it’s not really changing for the better, or it could look like it’s moving too fast. However, the fact is that change to a cloud operating model is happening and competition will be the deciding factor. Companies will adopt those strategies that offer them the best combination of agility, and cost, while appropriately addressing their level of risk tolerance.

Mark Thiele is executive VP of Data Center Tech at Switch, the operator of the SuperNAP data center in Las Vegas. Thiele blogs at SwitchScribe and at Data Center Pulse, where is also president and founder. He can be found on Twitter at @mthiele10.

Feature photo courtesy of  Flickr user piermario; Server photo courtesy of Flickr user Paul HammondOdometer photo courtesy of Flickr user  quasireversible.

  1. “The above characteristics lend themselves to allowing a company to go whole hog into a new IT strategy and to accept risks where more established enterprises can’t or won’t. Generally smaller companies and younger companies will take this risk.”

    This is an area I think companies are most surprised at when looking to migrate existing services to the cloud. Cloud computing is a shift in the way services are delivered AND built. You aren’t just going to migrate your Lotus Notes server instance to the cloud and save money or become more efficient. You have to redesign your groupware.

    I had similar thoughts here.

    http://virtualizedgeek.com/2012/08/08/does-the-enterprise-have-a-use-for-openstack-and-iaas/

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  2. How bout a standard cloud computing platform? That would mean companies would have to work together which…is maybe not conducive to specific company interests.

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  3. Reblogged this on Red Paint Blog and commented:
    Very nice article. Gave me all the ammo I need when my boss comes to get my take on this. Anti-risk and cautious defines us as a firm. Good read.

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  4. It’s much more likely we’ll see new applications developed on public cloud platforms than the migration of legacy systems. These projects don’t have any of the legacy baggage and can be designed with the cloud infrastructure in mind. It’s more appropriate for legacy systems to be moved off old internal hardware onto private clouds because they can easily be mapped directly to them with the differences being below the OS layer so the application never even needs to know it’s on a shiny new cloud.

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  5. Many use the term private cloud to point to the old (and pretty clueless) way of running a data center.
    IMO private cloud, as the name suggests, represents a business need to maintain high degree of privacy and control of its data and resources by ensuring that they are not shared with others. The resources may very well be hosted somewhere else but the key is that they remain private. These needs will never cease to exist in the same way that we have public and private transportation, or the option to lease and rent a car, and will continue to have. The old way of running data centers must change and is changing to meet the cost and agility demand of the business, and is adopting many of the features of public cloud. With that the cost margin differences between private and public clouds becomes less signficant and for some scenarios has proven to be even cheaper (assuming that you can design for a particular work load and use case) in a private cloud sceanrio. All this makes the cost argument even less significant a factor for choosing between the two models.

    I’ve posted the full details behind this argument here:

    http://natishalom.typepad.com/nati_shaloms_blog/2011/11/public-vs-priavate-clouds-again-its-not-about-the-cost.html

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