Cloud vs. in-house: Where to run that app?

Options include public clouds and external private clouds. Here's how to choose wisely.

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This push-and-pull is evident at Cambridge Health Alliance (CHA), a network of health care providers in and around in Cambridge, Mass. Dan Cameron, a CHA senior IT staff member with an emphasis on security, says that he favors running a lot of applications on clouds, including public clouds, because he believes that this is more cost-effective than buying more systems and that cloud security will improve. He also expects to use various niche cloud providers, depending on the nature of the applications.

But Joe Velletri, an Internet Web developer at CHA, says that he has serious reservations about running his applications in insecure environments such as public clouds.

Rolling your own cloud

Today, customers are leaning toward the use of internal clouds over external clouds because of the various risks associated with external clouds, including security, data privacy and SLAs. The significant downside, though, is that IT has to build this environment and no single vendor provides all the pieces.

"The data center staff will have to create the automation layer for their internal cloud because today no vendor provides a complete software layer," Swan says. "The staff will essentially have to buy the pieces and put them together." A large enterprise could spend millions of dollars over several years creating a full-blown internal cloud that produces the cost savings and exhibits the automation desired.

All in all, "decisions about the use of clouds versus server virtualization depends a lot on how heavily you have invested in your data center and whether you have sufficient capacity in your data center," says Verizon Business's Deacon. Most companies do not rip and replace; that is, they do not shut down their data centers and move everything to clouds, he says. Likewise, companies that have been outsourcing are not going to immediately start creating an internal cloud in their data centers.

Verizon Business' Jeff Deacon
"Clouds provide automation and orchestration not found with server virtualization," says Jeff Deacon, cloud computing principal for Verizon Business's internal applications.

What they do depends on what they have been doing and what they are most comfortable with, Deacon says. "Over time, enterprises that have traditional outsourcing contracts and managed hosting will convert to clouds, because it makes sense, is cost-effective and offers more flexibility."

Bill Claybrook is an analyst with over 30 years of experience in the computer industry, and has specialties in Linux, open source, virtualization and cloud computing. He is president of New River Marketing Research in Concord, Mass., and holds a PhD in computer science. He can be reached at

Copyright © 2010 IDG Communications, Inc.

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