Yes, I know, everyone is tired of hearing about the Cloud. It seems like talk about the cloud happens all day, every day, and you know that it’s hit the mainstream when your mom asks you about it. The reality is that we’re still so early in “The Journey” (yes, we call it that because it truly is one.) that it can be impossible to distill the tremendous amount of noise that exists around the topic. Let’s spend a few precious moments identifying the cloud myths that are swirling about and try to myth bust a bit.
Legacy – I have too much invested in my legacy systems, tools and processes that makes moving to the cloud too hard or just not worth it.
That’s partly true. Many companies have a lot of legacy systems and infrastructure out there. So much so that it clouds (no pun intended) their view on what’s possible. It’s like quicksand; the more time and money invested in legacy systems and architectures, the deeper and deeper you get, and it just seems impossible to get out. There is a way out though, and the first step forward is actually to take a step back and understand where you are today. From there, we’d suggest taking stock of what’s in your environment and seeing what’s ready to move to the cloud.
Security – It’s not secure. I’ll be sharing my data with everyone else.
That’s absolutely not true. The public cloud is extremely secure. These environments have been built to adhere to the most stringent security standards on the planet. Cloud providers take an in depth approach, going above and beyond to ensure that security permeates throughout the environment.
Agility – What am I really gaining? There can’t really be as much benefit as people are saying.
When we talk to any business person, lack of agility is typically their number one challenge. Traditional legacy, or even co-location infrastructure, is designed and built so that it doesn’t allow for the flexibility companies need in the constantly changing world. The need to continually evolve and the ability to “fail fast” are so important to businesses today, and the cloud enables you to do just that. You can literally create a global infrastructure in a matter of minutes that runs only when you need it. The benefits are dizzying.
Cost – I hear that it will actually cost me more to run in the cloud.
There are tremendous economies of scale to be gained by building out the massive footprint that the existing public cloud providers have built. It’s enabled them to get such a head start that it’s downright unbelievalbe what you can do today at a fraction of the cost of doing it in a traditional IT world. There are a number of TCO calculators out there that will show you the cost of running infrastructure on-prem vs in the cloud. Take a look at the calculator we built for AWS and see for yourself by plugging in your own numbers.
Best of Breed – I can use any cloud provider. They’re all the same.
There is an entire body of knowledge dedicated to the cloud landscape, how mature each company’s offerings are and where they fit in the overall landscape. I am a firm believer that you build your company to be as agile as possible, trying to eliminate brittle and hard linkages. Please check out the following link for an independent analyst’s view of today’s cloud landscape.
See what Gartner is Saying about the Cloud
Org Structure – I can use cloud as I see fit and keep things the way they’ve normally been internally.
True innovation is happening here. The industry is attracting the absolute best and brigh talent, and the pace of innovation will only accelerate. I’m not saying you need to stay ahead of it. The goal is to keep pace and not fall behind. We can help you do that!
-Mike Triolo, General Manager – Eastern US
There are an endless supply of articles talking about “the dangers of the hidden costs of cloud computing”. Week after week there’s a new article from a new source highlighting (in the same way) how the movement to cloud won’t help the bottom line of a business because all of the “true costs” are not fully considered by most until it’s “too late”. Too late for what? These articles are an empty defensive move because of the inevitable movement our industry is experiencing toward cloud. Now to be fair…are some things overlooked by folks? Yes. Do some people jump in too quickly and start deploying before they plan properly? Yes. Is cloud still emerging/evolving with architecture, deployment and cost models shifting on a quarterly (if not monthly) basis? Yes. But, this is what makes cloud so exciting. It’s a chance for us to rethink how we leverage technology, and isn’t that what we’ve done for years in IT? Nobody talks about the hidden savings of cloud nor do they talk about the unspoken costs with status quo infrastructure.
Before jumping into an organization that was cloud-first, I worked for 13 years, in many roles, at an infrastructure/data center-first organization, and we did very well and helped many people. However, as the years progressed and as cloud went from a gimmick to a fad to a buzzword to now a completely mainstream and enterprise IT computing platform, I saw a pattern developing in that traditional IT data center projects were costing more and more whereas cloud was looking like it cost less. I’ll give you an unnamed customer example.
Four years ago a customer of mine who was growing their virtual infrastructure (VMware) and their storage infrastructure (EMC) deployed a full data center solution of compute, storage and virtualization that cost in the 4 million dollar range. From then until now they added some additional capacity overall for about another 500K. They also went through a virtual infrastructure platform (code) upgrade as well as software upgrades to the storage and compute platforms. So this is the usual story…they made a large purchase (actually it was an operational lease, ironically like cloud could be), then added to it, and spent a ton of time and man hours doing engineering around the infrastructure just to maintain status quo. I can quantify the infrastructure but not the man hours, but I’m sure you know what I’m talking about.
Four years later guess what’s happening – they have to go through it all over again! They need to refresh their SAN and basically redeploy everything – migrate all the data off, , validate, etc. And how much is all of this? 6 to 7 million, plus a massive amount of services and about 4 months of project execution. To be fair, they grew over 100%, made some acquisitions and some of their stuff has to be within their own data center. However, there are hidden costs here in my opinion. 1) Technology manufacturers have got customers into this cycle of doing a refresh every 3 years. How? They bake the support (3 years’ worth) into the initial purchase so there is no operational expense. Then after 3 years, maintenance kicks in which becomes very expensive, and they just run a spreadsheet showing how if they just refresh they avoid “x” dollars in maintenance and how it’s worth it to just get new technology. Somehow that approach still works. There are massive amounts of professional services to executive the migration, a multi-month disruption to business, and no innovation from the IT department. It’s maintaining status quo. The only reduction that can be realized on this regard are hardware and software decreases over time, which are historically based on Moore’s law. Do you want your IT budget and staff at the mercy of Moore’s law and technology manufacturers that use funky accounting to show you “savings”?
Now let’s look at the other side, and let’s be fair. In cloud there can be hidden costs, but they exist in my mind only if you do one thing, forget about planning. Even with cloud you need to take the same approach in doing a plan, design, build, migrate, and manage methodology to your IT infrastructure. Just because cloud is easy to deploy doesn’t mean you should forget about the steps you normally take. But that isn’t a problem with cloud. It’s a problem with how people deploy into the cloud, and that’s an easy fix. If you control your methodology there should be no hidden costs because you properly planned, architected and built your cloud infrastructure. In theory this is true, but let’s look at the other side people fail to highlight…the hidden SAVINGS!!
With Amazon Web Services there have been 37 price reductions in the 7 years they have been selling their cloud platform. That’s a little more than 5/year. Do you get that on an ongoing basis after you spend 5 million on traditional infrastructure? With this approach, once you sign up you are almost guaranteed to get a credit as some point in the lifecycle of your cloud infrastructure, and those price reductions are not based on Moore’s law. Those price reductions are based on AWS having very much the same approach to their cloud as they do their retail business. Amazon wants to extend the value to customers that exists because of their size and scale, and they set margin limits on their services. Once they are “making too much” on a service or product they cut the cost. So as they grow and become more efficient and gain more market share with their cloud business, you save more!
Another bonus is that there are no refresh cycles or migration efforts every 3 years. Once you migrate to the cloud AWS manages all the infrastructure migration efforts. You don’t have to worry about your storage platform or your virtual infrastructure. Everything from the hypervisor down is on AWS, and you manage your operating system and application. What does that mean? You are not incurring massive services every 3-4 years for a 3rd party to help you design/build/migrate your stuff, and you aren’t spending 3-4 months every few years on a disruption to your business and your staff not innovating.
-David Stewart, Solutions Architect
According to IDC, a typical server utilizes an average of 15% of its capacity. That means 85% of a company’s capital investment can be categorized as waste. While virtualization can increase server capacity to as high as 80%, the company is still faced with 20% waste under the best case scenario. The situation gets worse when companies have to forecast demand for specific periods; e.g., the holiday season in December. If they buy too much capacity, they overspend and create waste. If they buy too little, they create customer experience and satisfaction issues.
The elasticity of Amazon Web Services (AWS) removes the need to forecast demand and buy capacity up-front. Companies can scale their infrastructure up and down as needed to match capacity to demand. Common use cases include: a) fast growth (new projects, startups); b) on and off (occasionally need capacity); c) predictable peaks (specific demand at specific times); and d) unpredictable peaks (demand exceeds capacity). Use the elasticity of AWS to eliminate waste and reduce costs over traditional IT, while providing better experiences and performance to users.
-Josh Lowry, General Manager Western U.S.
2nd watch CEO, Kris Bliesner, recently wrote an article for Sandhill.com, an online destination for insights and business strategies for the software, cloud, mobile and Big Data ecosystem, comparing Amazon Web Services to the new Google Compute Engine. Kris discusses four important points to take into consideration when comparing the two:
- Operating System Flexibility
Ultimately, Kris states that “AWS trumps Google at this point. Top reasons: Google is more expensive for very basic features, is not appropriate for enterprise workloads and has no way to move existing content in or out seamlessly.”
Read the entire article on Sandhill.com’s Cloud blog.
According to Gartner, while 42% of CIOs report to CFOs, 75% of CFOs are actively involved in making IT decisions for their companies. Successful selling then requires understanding how CFOs think about making business and financial decisions. Cloud computing is accelerating this need based on the shift from capital expense to operating expenses. Capital expenses (CapEx) are for assets with a useful life greater than one year. Operating expenses (OpEx) are incurred in the ordinary course of running the business on a monthly or yearly basis.
Why does the shift from CapEx to OpEx matter? Companies want to preserve cash. CapEx requires an upfront investment. OpEx allows you to pay on a monthly or years basis. For example, instead of making an upfront investment based on peak capacity for physical server infrastructure, customers can leverage AWS to match capacity to need, as well as pay as they go (monthly) for only the services that they use. The following is a summary of the key differences between CapEx and OpEx:
You can also try the TCO Calculator to see what kind of Capex savings your business could save by moving to the cloud.
-Josh Lowry, General Manager – West