There is not a secret any more than digitalization should be included in the short-, mid- and long-term agenda from small business to enterprises no matter the sector, business model, customers or market target. During the transformation process road to the digital independence the selection of a proper digital architecture to build on top your new services or products is determinant to get a competitive advantage and differential factor with your competence.
In today’s world of enterprise IT, there are many factors that a company must consider in order to decide whether a cloud infrastructure is the right fit. Conversely, there are many companies that are unable make the leap into the cloud, instead relying on their tried-and-true legacy and on-premise applications and software to do business.
According to folio3, cloud computing is the delivery of on demand computer system resources, requiring no active management and usually includes applications such as storage and processing power. With a Cloud-based subscription model, there is no need to purchase any additional infrastructure or licenses. In exchange for an annual fee, a cloud provider maintains servers, network and software for you. The information hosted by the vendor can be accessed through a web portal. The dedicated private cloud allows customers to use the platform completely, with no shared resources. They can request additional customization, backup controls and upgrades. With a shared cloud, complete privacy of the client’s data is observed, however multiple tenants share the cloud service. It is a more economical option but offers limited customization.
The same publication defined on-premise solutions where everything is done internally; whereby maintenance, safety and updates also need to be taken care of in-house. Once the software is purchased, it is then installed on your servers; requiring additional power servers, database software and operating systems to be purchased. With no third-party involvement, your company assume complete ownership from the implementation to running phases.
At this level, if you are looking for cloud-based solutions, following we describe a plenty of advantages and benefits provided by Morefield Communications:
- Affordability: Generally, costs are lower for cloud-based applications. Instead of having to pay a large licensing fee upfront, you will have much lower monthly costs. Often times, these monthly costs take the form of subscription fees. Along with the lower initial costs that make them more affordable, the companies offering these subscriptions often include maintenance and support, saving you manpower and the financial cost of having to troubleshoot problems yourself.
- Ease of deployment: One of the biggest advantages of cloud computing is its ability to be deployed quickly without long installation processes. Customers of cloud software vendors will be able to start using the vendors’ application within minutes. Quick deployment gives companies an edge over the competition, and as such, is very popular among competitive companies.
- Management services: One major aspect of cloud computing is the management services that vendors will typically offer clients. Instead of having to host the software or purchase hardware themselves, a customer can work with a vendor who will take care of it all externally, freeing up staff and reducing costs.
- Management information: In a cloud computing environment, the question of ownership of data is one that many companies and vendors for that matter, have struggled with. Data and encryption keys reside within your third-party provider, so if the unexpected happens and there is downtime, you maybe be unable to access that data.
In spite of the many advantages of the cloud-based architectures, several companies are avoiding to deploy their full IT architecture based only on cloud solutions. Many of them the traditional arguments to move all workloads to the cloud no longer make sense. ITPro Today describes some of new consideration to choose an on-premise solution against a cloud-based IT infrastructure:
- Long term cost: initially the cloud-based solutions was sold as cost saving technologies under the concept “use only what you need”, but with the increase of computational capabilities, network traffic, services and storage, cloud cost optimization become an ongoing battle for many businesses. And one easy way to end up paying more than you should is to run workloads that have a high amount of data ingress and egress.
- Low-latency workloads: moving data between cloud servers and end user devices takes time and money. Ensuring that you host data in cloud regions that are geographically proximate to your end users helps to reduce those delays, but it doesn’t eliminate them. Plus, if your users are spread across disparate geographic areas, being strategic about which cloud regions you use won’t help you much at all.
- High volumes of data: the fact that the cloud depends on network connections to move data between cloud servers and the people who create or use the data not only introduces latency challenges, but it can also make it impractical to transfer large volumes of data into and out of the cloud at reasonable speeds. It’s worth noting that cloud providers have invested a lot of money in solutions (like AWS Snowmobile) that are designed to make it easy to move enormous volumes of data into the cloud. But most of these addresses only the initial data transfer required to migrate a workload to the cloud.
- Organizational oversight and governance: the lack of organizational culture and governance in some businesses could create a dangerous temptation for departments or individual employees to create workloads that are not strictly necessary and end up costing lots of money for no good reason. The same sort of thing can happen in on-premises infrastructures, but it is rarer, because there are more hurdles in the way.
- Less flexibility: flexibility and customization are often an issue for companies that use cloud-based software. The suppliers that provide software to companies via the cloud often do not include widely customizable options. The service is often designed for the industry rather than the specific needs of a company, meaning that customers may not receive a service that is convenient for everything they do.
- Security concerns: cloud-based solution also has comparable problems with security. Though security has gotten better, the cloud can still be hacked into by outside forces that look to extract data from these online programs.
In summary, if your organization lacks strong oversight or IT governance, it may be safer to stick with an on-premises infrastructure than to move to the cloud and run the risk of cloud bloat and out-of-control cloud costs.
On the other hand, hybrid cloud solutions are growing as a strong alternative, selecting the best features from both technologies. A hybrid cloud solution is a solution that features an element of different types of IT deployment models, ranging from on premises to private cloud and public cloud. A hybrid cloud infrastructure depends on the availability of a public cloud platform from a trusted third-party provider, a private cloud constructed either on premises or through a hosted private cloud provider, and effective WAN connectivity between both of those environments.
Other economical figure of merits describes that public cloud service market is expected to reach $623.3 billion by 2023 worldwide, 30% of all IT budgets are allocated to cloud computing, 66% of enterprises will have a central cloud team or a cloud center of excellence by 2022, organizations leverage almost 5 different cloud platforms on average and 50% of enterprises spend more than $1.2 million on cloud services annually.The true is technical limitations, long term cost and security concerns apart, the cloud business is growing faster than ever. According to Forbes prediction, 83% of enterprise workloads will be in the cloud by 2020. LogicMonitor’s survey is predicting that 41% of enterprise workloads will be run on public cloud platforms (Amazon AWS, Google Cloud Platform, IBM Cloud, Microsoft Azure and others) by 2020.
Arrived at this point, we hope that the information shared in our post help you with the technical and economic decisions in order to select the right IT infrastructure according with your needs and goals. In future posts, we will be touching the role of the edge-based and distributed computational resources in the IT infrastructures for enterprises.
In future posts, we will be continue writing about technology and business trends for enterprises. Furthermore, we recommend consulting the following literature to continue your digital transformation journey:
- Designed for Digital: How to Architect Your Business for Sustained Success, MIT review
- The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives, by Simon & Schuster
- Artificial Intelligence: The Insights You Need, by Harvard Business Review
- The Year in Tech, 2021: The Insights You Need, by Harvard Business Review
- The Deep Learning Revolution, by MIT Press
- Competing in the Age of AI, by Harvard Review Press
The objective of this blog is to provide a personal vision of how digital transformation trends will be impacting in our daily activities, businesses and lifestyle.