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Cloud Services: Build or Buy?

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CIOL Bureau
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BANGALORE, INDIA: For many enterprises, moving to a cloud services model has become a holy grail in terms of their future IT vision.

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After all, what’s not to like? Send all of the complexity of managing your infrastructure to someone else, and enable instant spin-up of services. At the same time, the organization can significantly lower the cost of their IT services. For example, IBM iNotes Live starts pricing at $3 per user, per month. It’s a good bet that not all IT organizations can effectively run their internal electronic communication platforms for that low a cost.

When the term ‘cloud’ comes up most people envision Amazon Web Services, Google, or Salesforce.com. These vendors are certainly the icons of the cloud vision, and are attempting to become a one-stop shop for all of an enterprise’s IT needs.

But these vendors are really focused on public cloud services. They drive cost down and scale up by trying to support thousands, perhaps millions of businesses on their platforms. They centralize all of their services in a few data centers around the world, and try to deliver global services – at acceptable performance - from these locations.

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This is the purest vision of the cloud. It completely abstracts away all the complexity of dealing with physical IT infrastructure. Due to thin-provisioning and virtualization, these vendors can present a seemingly limitless data centre infrastructure at a low monthly cost. These visions, however, are not without their problems.

According to a recent research paper out of UC Berkeley, entitled Above the Clouds, public cloud adoption will be hindered by a number of factors: availability, vendor lock-in, security, data transfer bottlenecks (bandwidth limitations), performance unpredictability (latency).

Public cloud vendors will likely overcome the last two by adopting WAN optimization infrastructure, but the other three barriers (combined with one more issue described below) have pushed some enterprises to take a different tact with the cloud: private cloud services.

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 The idea behind private cloud services is to take the fundamental business and delivery model for public vendors and scale it down to delivering the computing capacity for an individual enterprise. For enterprises that have tens of thousands or hundreds of thousands of employees, they may also reach the tipping point where they can cost effectively provide the type of instant, seemingly endless computing and storage capacity that public vendors have.

By consolidating storage and applications, virtualizing infrastructure, and then providing acceleration to branch offices and mobile workers, businesses are beginning to create private cloud services. In essence, businesses are taking their physical data centers and changing the way they manage the services that run out of that data centre.

 
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In addition to overcoming issues of availability, security, and lock-in, organizations see one other benefit to the private cloud model: dealing with sunk data center costs.

Many organizations have invested millions over the past two to four years to build the private data center capacity that they need to support their business for the next 5 to 10 years. With such a large investment (and the case that IT departments had to make to their CFO’s and boards), it’s unlikely that they would simply abandon those investments to use the cloud.

Rather, they may shift their operational models within their own data centers to mimic what public cloud services are doing. This will give IT organizations to more cost effectively deliver internal services, and if they have a chargeback model they can drive these lower monthly costs back into the business units that consume IT resources and services.

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Over time, businesses that adopt a private cloud model may more easily transition to a hybrid model that uses both private and public cloud models. In fact, in a recent discussion with a top-10 engineering company, its CTO looked at the public cloud as “flex-capacity” to support their private cloud infrastructure.

As large projects come online, shift locations, or undergo other transitions, public cloud services may supplement their internal capacity to ensure that IT services are not a bottleneck to completing a revenue-generating project on schedule. Other companies may simply look to recoup their investment in their existing data centers and eventually transition completely to a public services model, making the assumption that by the time they begin that transition costs will be even lower and the other barriers to adoption will no longer be an issue.

Regardless of whether technologists choose the public cloud, the private cloud, or a mix of these services to deliver IT for their business, it’s important that they don’t lose sight of the end goal. Their mission is to provide a competitive advantage to their end users so that they can generate more revenue, more easily for the business.

Above all, that means IT must provide them with the functionality they need at the fastest possible level of performance. Whether a business builds out its own cloud or buys cloud services from someone else, they need to be sure that the end product is optimized for the speed that its own users need.

The author is Regional Director, India/SAARC at Riverbed Technology.

The views expressed in this article are the views of the author and do not necessarily reflect the views or policies of CIOL.

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