Moving to the cloud: Big savings, but plan ahead

Savings can be significant over in-house gear

Some might say that San Diego-based Amylin Pharmaceuticals was pushed into the cloud. The 23-year-old company's data center had been running at 100% capacity and IT executives feared inevitable performance problems, but the company was reluctant to build another site due to the poor economic climate.

"We had already done significant virtualizing of our servers and couldn't cram anything more onto our data center infrastructure. The only thing we could do to relieve the pressure was to start moving legacy applications to the cloud," says Todd Stewart, senior director of IT operations.

Some applications, such as e-mail, were switched to a software-as-a-service model so that IT could offload the application and infrastructure management to a service provider. However, there were other applications, including human resources and enterprise monitoring, that Stewart and his team wanted to closely manage without having to deal with the underlying infrastructure. To handle this delicate balance, he turned to infrastructure as a service (IaaS) through the public cloud.

With public cloud IaaS, organizations pay per use or per cluster of resources for an external cloud service provider to host their virtual servers. These types of services are available from Amazon, Google, HP, IBM, Microsoft, RackSpace, Sun Microsystems, Terremark Worldwide and telecom companies, among others.

IT maintains control over the applications without worrying about configuring, upgrading or patching servers and other infrastructure. If a department needs to deploy a new application, IT simply loads that application onto the service provider's virtual server and the software is available to users.

In a recent report, Forrester Research found that about 25% of all enterprises surveyed plan to adopt IaaS via an external provider.

Most that go this route can expect tremendous savings, according to Lynda Stadtmueller, senior research analyst with Frost & Sullivan's Stratecast division. In a recent study, she found that a small business that migrated four of its servers to the cloud, essentially shutting down its on-premises data center, realized a 50% savings. Although it involves a small business, she says the statistic is relevant because "it's unlikely that a larger business will migrate its data center infrastructure all at once or completely."

In other words, even a larger company would migrate only a few servers at a time, so those numbers translate to what even larger companies are likely to be doing.

Savings arise from deferred costs for equipment upgrades and maintenance, power, and decreased labor costs. Most data centers provision for peak activity but operate at low utilization rates, thereby wasting valuable resources.

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