Companies looking for more agile data centers are increasingly turning to public (external) or private (internal) clouds with virtualized servers, storage and networks. Getting the lowest cost and the best speed and flexibility from those systems requires assessing everything from performance to control and interoperability. And the larger your organization is, the more planning it takes to create an "enterprise grade" cloud that meets your performance, security and compliance needs.
Smaller and newer organizations with simple needs often get the most dramatic and immediate results from public cloud services. That's because they have no "sunken costs" in existing infrastructure and fewer internal applications to integrate with cloud platforms. In addition, the per-seat pricing plans offered by software as a service (SaaS) vendors tend to favor smaller customers.
Some of the biggest beneficiaries of cloud setups are SaaS vendors themselves. Digital Technology International, for example, manages its own hardware in remote data centers to provide hosted applications to publishers, and it found the cloud to be "five times more profitable and half as expensive" as it predicted, says Byron Oldham, vice president of engineering and development at the Springville, Utah-based company.
AlertBoot, a provider of SaaS-based point-of-sale and encryption applications, abandoned its own data center for the public cloud about a year ago, and CEO Tim Maliyil says the company has "met our cost-cutting aims beyond levels I would have thought imaginable." The Las Vegas-based company saved $2.5 million in hardware upgrades, plus $85,000 in monthly operating expenses and thousands per month in consulting fees.
However, the more complex the environment, the more factors to consider in choosing what to move to the cloud and how. This is especially true of public cloud offerings from outside vendors. Big organizations, for example, often don't consider the cost of integrating a SaaS offering with older applications, says David Nichols, a partner at consulting firm Ernst & Young.
Like many big firms, financial services giant ING set up a private cloud first, a move that enabled it to cut costs by 30% and gave it the ability to provide internal users with new servers in hours rather than weeks, says CTO Tony Kerrison. ING will move toward a hybrid public-private cloud model next year, and will start shifting selected applications into the public cloud after that.
As it does, it will insist on enterprise-grade services that provide the same levels of control, security and auditability as internal systems. ING also needs common standards for undertakings such as integration of cloud and legacy applications. Toward that end, Kerrison is heading a customer-led effort to create such standards within the TM Forum, a trade association for service providers.