Balancing Costs and Benefits

How you plan your hybrid cloud environment will be driven by economics. You, therefore, need to think in terms of the total costs and whether those expenditures will be worthwhile in the long run. Achieving this balance isn’t simple. Many cloud services, including IaaS and SaaS, are offered based on a per-user, per-month, or per-year contract. Some other services are designed for occasional use. Private cloud services can often leverage hardware already existing within a data center. No simple formula will give you the most optimal way to define the total cost of ownership or whether a cloud service will accomplish your long-term goals.

Defining the purpose of your cloud services

Because of the economic impact, you have to look at cost-benefit issues though a different lens than in a traditional data center environment. You need to think about the purpose of each service you are considering and how it will affect the business. For example, a SaaS environment may be more expensive in yearly license fees, but save the company money in terms of hardware, software, maintenance, and support requirements. SaaS also may better support the internal needs of the business. Perhaps the SaaS environment means that your company can be more proactive in addressing customer or employee needs. This SaaS service could result in better internal productivity.

On the other hand, in other situations, a public cloud service won’t make economic sense, such as when your company’s actual business is a set of cloud services. In this situation, your company is, in reality, a cloud service provider. Therefore, bring these services in-house, because a well-architected cloud service model will provide the most economically viable solution to support the business. If big enough, the company might be able to use its buying power to purchase in a less expensive way than a third-party company could. Likewise, this company can be in a good position to support innovation and optimize the private cloud model so that it produces the right workloads in the right way.

In yet other situations, companies will find that splitting services between public and private is the most optimal financial approach. The company that needs extra storage capacity three times a year will be best served by leveraging a public storage service than by purchasing extra storage capacity.

The bottom line is that there is no one approach to determining total cost of ownership or your return on investment in a hybrid cloud environment. So, part of your planning process is to take into account the financial measures you’ll need when moving to the hybrid cloud. What issues will most directly affect your ability to compete? What type of innovation is likely to be important for your long-term strategy for success? Simply looking at all expenses in the same way will not be the best method for determining your strategy. Establishing a set of guidelines for the economics of your cloud strategy will help your decision-making process.

Taking a holistic approach

When you are planning for your movement to a hybrid cloud environment, make sure that you aren’t looking though only one lens. Instead, view the hybrid cloud from the perspective of flexibility and agility for your business needs. The hybrid cloud also needs to be understood from a technical implementation strategy so that plans can be put into action in a staged and well-thought-out fashion. Your success with the hybrid cloud will depend not just on how you can justify what you spend and what you save, but also how you affect the bottom line of the business.