Business StrategyWhy moving to the cloud may not save as much as you think

Executive Summary

If you imagine moving to the cloud is going to save CapEx, you're right. But what you may not realize is that much of the CapEx reduction will be offset by OpEx increases, and in ways you didn't anticipate. Apps can run very differently in the cloud than they did in your data center. You'll also need to take new looks at security, backup, recovery, hiring and training.

Executive Summary

If you imagine moving to the cloud is going to save CapEx, you're right. But what you may not realize is that much of the CapEx reduction will be offset by OpEx increases, and in ways you didn't anticipate. Apps can run very differently in the cloud than they did in your data center. You'll also need to take new looks at security, backup, recovery, hiring and training.

The economics of going to the cloud are appealing. Imagine taking the cost of building a new state-of-the-art data center and simply wiping it from the books. Suddenly your capital expenditures budget looks more attractive.

What many don’t realize is that much of the money they save in CapEx will move over to OpEx. While operating in the cloud can save big on infrastructure, it still requires that you do many of the things you do today—from managing how your software is used to data security and disaster recovery—but in ways you may not be familiar with.

Here are four considerations that will help you better predict the financial implications of your move to the cloud.

1. App availability

Apps that work one way in your data center often operate differently in the cloud. When your app use is billed by the minute and the megabyte, you need to closely monitor what your employees are using and how much data they’re consuming.

For example, if a cloud app is used intensely for brief periods and otherwise idle, you can choose to only spin it up when needed, instead of making it available 24×7. You may choose to operate some apps at off-peak hours when the charges are lower or make them available to employees in only some regions of the world.

Related

The ROI of moving to the cloud: Have you balanced your cloud checkbook?

5 min. read

Not all apps make economic sense to run in the cloud. Those that are accessed on an ad hoc basis or that need to be available 24×7 to a global user base are best suited to the cloud; data-hungry apps or those that require a persistently heavy workload will cost more in the cloud than on premises.

2. Security

You’ll need to have at least the same level of security in a public cloud as you do in your own data center. But that’s something you’ll have to provide yourself. As Amazon Web Services’ (AWS) own terms make quite clear, Amazon is responsible for the security of the cloud—the compute, storage, network, and database resources it maintains in its own data centers, as well as the physical security of those locations.

Related

6 steps to prepare your architecture for the cloud

10 min. read

But AWS customers are responsible for the security of everything they put in the cloud—programs, data, and the users who access them. That includes everything from the operating system and applications to the network and firewall configurations, identity and access management systems, encryption and integrity authentication, and—most importantly—customer data.

It’s called a shared responsibility model, and it’s standard for services like Microsoft Azure and Google Cloud Platform as well. In fact, more than one in four respondents from F5’s State of Application Delivery 2017 survey say that maintaining consistent security policies across multiple environments is a challenge.

#1

The number one barrier to cloud adoption is lack of resources and expertise

3. Backup and disaster recovery

You’ll need real-time backups for your cloud data and an airtight disaster recovery (DR) plan. While all cloud service providers offer a range of backup and DR options, it will be up to you to architect a solution that meets your business needs.

For example, you’ll need to choose recovery time and recover point objectives: how quickly will you need to be back up, and how far back in time do you need apps and data to go?

Related

4 things to watch for in your cloud blind spots

8 min. read

Does business continuity require a high-availability system that can roll over seamlessly in case of an outage? Do you need a geographically dispersed recovery site to protect against regional disasters, such as hurricanes or earthquakes?
All these decisions have economic implications. Generally speaking, the more data you back up and the more quickly you need it, the more it will cost.

It will be up to you to architect a solution that meets your business needs.

4. Cloud skills

Managing operating systems, applications, and security in the cloud isn’t the same as doing it on premises. You’ll need people who are familiar with toolsets like Chef and Puppet that help automate cloud infrastructure.

This is where a lot of organizations are challenged. According to a January 2016 survey by RightScale, a lack of resources and expertise is the number one barrier to cloud adoption, cited by 26 to 38 percent of respondents, depending on the maturity of their cloud model. The odds are that you’ll need to invest in training your existing admins or hiring new ones with the requisite skills.

Bottom line: Don’t assume that your costs will be lower after you move to the public cloud. You may end up spending the same amount of money in new ways.

A Public Cloud Risk Model

Daniel Tynan is an American journalist, television and radio commentator who specializes in technology, humor, and humorous takes on technology. A contributing editor for PC World, InfoWorld.com, and Family Circle magazine, and tends the Robert X. Cringely blog “Notes From the Field” for InfoWorld. His work has appeared in more than 50 publications, including Newsweek, Family Circle, Popular Science, Wired, and Playboy.com. He has appeared on CNN, CBS, NPR, Discovery, and Fox News, as well as dozens of regional television and radio programs.

You Might Also Like

Cloud · 5 min. read

Preserve your flexibility in the cloud

Developers are having a greater impact on how applications are architected, and in many cases, making unilateral choices that are in effect making business decisions for the company. CIOs need to manage this.