Cloud: more than a zero-sum gain?

The cloud is sometimes touted as a money-saver, or at least a way to make management of expenditure easier - by turning CAPEX into OPEX. But there are hidden costs (like bandwidth) that should be taken into account when planning a cloud deployment.

Is the cloud right for your business? The answer to this question is typically yes - in some capacity. And it’s understanding the details of this “in some capacity” which, more often than not, determines the success and long-term viability of any organisation’s cloud computing strategy.

IT managers and line-of-business executives alike must take care to factor in the indirect costs of cloud, particularly bandwidth and service levels, when planning its uptake within the organisation. They need to assess the business case and ROI of the different forms the cloud can take: public, private or hybrid. And whatever cloud they choose - or even if they eschew it altogether - they should remember that without robust and scalable network infrastructure in place, they’ll be hard pressed to support their strategy on an ongoing basis.

Caveat emptor nubis (‘let the buyer of the cloud beware’)

The shift to cloud has been fast - in many cases, too fast for businesses to devise rigorous cost-benefit analyses or evaluations of its ROI. Without solid-use cases that directly support broader organisational objectives, the cloud can often end up costing more and being harder to manage than what it replaced. This is not to discourage adoption of the cloud; in fact, we reckon it’s one of the few IT platforms to have applicability to almost every organisation in existence. But if you don’t determine the exact shape and position of the cloud, it’s easy for it to become a white elephant in the sky.

IT managers in particular need to look past the hype and compare the trade-offs between cloud and fixed-server systems. Let’s take cost-effectiveness as just one example. Lots of Australian vendors continue to spruik the unparalleled ability of the cloud to minimise capital expenditure on hardware, software and installation. But what about the increased costs of bandwidth consumption which your employees need to access services in the cloud? While the cloud itself is scalable (another one of its oft-touted benefits), your network and its associated costs may not be able to support rapid growth in usage. And it’s all too easy to omit the indirect costs of network usage when toting up the cloud’s savings compared to traditional servers.

The IT manager’s role is increasingly that of an advisor and strategic decision-maker, rather than the guy who tells hapless employees to check if their computer’s plugged in and turned on. Business leaders need to recognise that the IT manager is best placed to advise on whether, and how, the cloud can support core goals like growing revenue or improving sales.

IT managers, for their part, need to hone their skills in not just understanding the detailed workings of cloud solutions - including the implications of things like SLAs (service level agreements) and data centre security procedures - but also conveying how these might impact their organisation. While moving to the cloud may allow them to shift responsibility for day-to-day service levels, security and redundancy to third-party providers, they’ll be the ones relied on to select the cloud that provides the best in all three. Clear-headed assessment of all available options, combined with ongoing evaluation of indirect costs to bandwidth and network management, will be a major part of their job.

The public/private discussion

Broadly speaking, organisations have three types of cloud available to them. Public clouds involve hosting data and apps exclusively in third-party data centres, offering the highest potential for cost savings but also reducing much of the control that organisations have over their information assets. It’s worth noting that public cloud vendors can provide uptime guarantees, disaster recovery capabilities (like colocation) and SLAs far beyond anything most organisations can access on their own. But the actual performance of these features is something that IT managers must carefully scrutinise - whether it’s through physical visits to check out a data centre’s security protocols or a historical assessment of outage frequency and severity.

Private clouds keep these assets within organisation-owned and -operated hardware, allowing for remote and mobile access while retaining oversight of security - at a price in both dollar value and employee hours in system maintenance. This year’s amendments to Australia’s Privacy Act are likely to stipulate increased controls and legal responsibility for organisations to secure customer and other sensitive data. On top of that, customers, particularly following last year’s spate of high-profile spying scandals, may be even less generous when it comes to a breach. At the same time, IT managers still have measures apart from ‘going private’ to maintain compliance: de-identification of personal data, for example, can minimise the risks if a breach occurs.

Redistribution of responsibility

Unsurprisingly, most organisations are now opting for hybrid clouds, which allocate high-sensitivity data to private clouds while the remainder is hosted in public infrastructure. But is going no-cloud still an option? If remote access to data and apps is unlikely to be ever required, it may be. However, these scenarios will be far and few between - especially as employee and customer habits continue to shift towards network-based access - and will likely only apply to certain niche systems which the canny IT manager can easily identify.

What this means is that IT professionals will have greater responsibility for the cloud’s business ROI - and the capacity of network infrastructure to support its use cases. When they outsource storage and apps to the cloud, IT leaders must take up network management as their focus if they’re to ensure access to cloud-based assets is as scalable, reliable and cost effective as they promise. We like to think of IT pros as the unsung heroes of their organisations: in a cloud-based future, their greatest responsibility - and power - will be managing the flow of information’s 1s and 0s.

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