Cloud Is Not A Business Strategy: Choose Your Provider Wisely

What a difference a year makes. Up until last year, we had one group debating the merits of ‘X’-as-a-Service: Software, Infrastructure, Platform, Collaboration, Devices, Hats, Cats, etc. and which business model would reign king. While on the other side, Google, Amazon, Microsoft and others were espousing the benefits of both public and private cloud for the enterprise. Hardware providers like Dell and Hewlett Packard Enterprise (HPE) pursued a hybrid cloud path that created heterogeneous environments that support multiple technologies and providers. Cloud is no longer a business strategy. Cloud does not provide a competitive advantage anymore. Cloud has become something we just do. I anticipate that over 80% of businesses will have at least one application in a hosted environment.

Cloud has evolved to become just another part of our business calculus and something that is embedded into the enterprise fabric and part of our everyday lexicon. In nearly every industry or segment, cloud has gone from being a competitive advantage to competitive parity. Enterprises are now looking to cloud service providers (CSPs), public or otherwise, to solve specific business problems, rather than just offsetting CAPEX and driving incremental change. That said, Amazon Web Services (AWS) has become a victim of its own success. From pioneering the public cloud industry, to being the first provider that figures out how to make money on the business model, AWS has been a bellwether that all other providers have followed, or died trying. However, their success is creating a new breed of service providers that are aggressively closing the gap and looking to overtake AWS as the market leader.

Even as AWS dominates, it is important to call out some of the challenges and pitfalls when choosing AWS, or any other cloud service provider for that matter.

Cloud migration is hard and can be expensive

One of the main misconceptions companies have when considering going to the cloud is immediate incremental gains in efficiency, application performance and employee productivity. Cloud migration requires considerable planning and coordination, especially if you plan to move any of your applications to the cloud. Moving applications requires moving all integration, supporting elements, APIs and connectors. Further, from a data perspective, it is vitally important to determine what data resides on premises versus in the cloud. Because of these obstacles, many organizations are leveraging a hybrid cloud approach where mission critical systems are left on premises while other functions reside in the cloud. As part of the planning process, companies need to manage their risk and fundamentally understand what goes to the cloud, and more importantly what doesn’t. Understanding risk and what workloads are appropriate to move to a public cloud provider are also vitally important. CIOs need to determine application and license portability and the applications environment of each service provider.

Out of the top three public cloud providers, AWS has the most confusing and complex pricing model: pay-per use. This model, while flexible and scalable, can lead to cloud sprawl. Cloud sprawl is when an organization spins-up more cloud resources than needed and they eventually lose control and insight into their cloud environments. This normally happens when an organization fails to do adequate capacity planning. Moreover, pay-per-use pricing model can become very expensive if you don’t understand the various nuances of the provider’s products and how they charge for each. To remain competitive, it seems as though each public provider tweaks their pricing model each day which is forcing CTOs to rethink how they budget. The days of buying hundreds of thousands of dollars’ worth of servers and systems and managing depreciation are waning. Cloud services have become part of the process, and organizations must be smart not just about the services they consume but choosing the right cloud provider that best fits their needs.

Choosing the right cloud provider is critical

By choosing the wrong cloud provider, companies can get locked into an expensive and painful ordeal. Some providers have draconian severance clauses that make it nearly impossible to move to another provider if needed. The most critical component to consider when choosing a cloud provider is how they protect and secure data both at rest and in flight. As the internet of things (IoT), big data and the connected enterprise grow, so does the need for companies to implement data governance policies to ensure their strategy defines how they manage data about customers, systems, processes, partners and employees. As part of a data governance program, companies must include how data interacts with their cloud provider from a storage, applications and services perspective. Understanding the cloud provider’s data ownership and sovereignty policies is one of the key decision points when choosing a provider.

All providers are not created equal. While they offer many of the same services, it is important to choose the right provider based on the needs of your business.

  • For example, Amazon.com’s AWS business model is high volume, low margins. AWS offers a broad range of services, but considering a move to AWS requires the most amount of planning and forecasting to avoid costly financial implications when choosing between on-demand instances versus reserved instances (reserved is how companies can reserve future capacity at a greatly reduced price).
  • The Google Cloud Platform (GCP) was designed to support data-centric companies that are born in the cloud. From an integrated platform perspective, I believe GCP has the most complete and comprehensive strategy.
  • Finally, Microsoft Azure provides the broadest set of choices for organizations from WAN connectivity, developer and data management tools, to application vendors and third-party service providers. Each has their strengths and weaknesses, but aligning the needs of the business with the service provider will make the journey less treacherous.

When exploring public or private cloud as an option there are several organizations that can make it easier. For example, Dell, Hewlett Packard Enterprise (HPE) and Rackspace Hosting are leading the way with their hybrid and private cloud solutions. Each support hybrid options for the big three public cloud providers, but they also have expanded integration support and consumption options not offered by the public cloud providers. These include, but are not limited to OpenStack, carrier grade network functions virtualization (NFV), the internet of things (IoT), and a custom hardware infrastructure.

Over the next month I will be discussing some of the misconceptions and pitfalls when choosing a cloud provider. With proper planning and coordination, companies can benefit from the many advantages of going to the cloud. Companies need to look past the hype and focus on choosing the right service provider that will help them to solve business problems and become more efficient.