Reasons for Choosing a Cloud-based Solution

Tim FitzGerald, Senior Vice President and Chief Data Officer, EverBank
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The Cloud is such a nebulous term which means different things to different people. Consider the landscape of SAAS (Software as a service), PAAS (Platform as a service), Public Cloud, Private Cloud, Hybrid Cloud, Fog computing, Coding as a service, applications that are hosted versus on premise. The best definition I have heard is simply, "Not done here".

There are different reasons to consider using a cloud-based option. You need to be clear on what the problem is that you are trying to solve. While there are many reasons, some of the more common ones are as follows.

You may not have a large enough IT shop to warrant purchasing large hardware or expensive software. You may not have the skill sets to support an array of technical platforms. For example, I only need half a network engineer to support my needs. It may be that needed skill sets are outdated, like mainframe support, or so specialized that you cannot afford or even find candidates in your market. You can also take advantage of the larger providers who provide 24/7 monitoring and support, which you do not have to staff for. Also, these providers are the ones having to keep hardware and software up to date, which the business traditionally does not see as value add to them, but takes IT bandwidth to manage.

  ​Leveraging cloud-based solutions shifts the conversation from capital expenditures (Cap Ex) to operational expenditures (Op Ex). That means you are only paying for what you consume  

You may need to be flexible with your infrastructure to support multiple projects or varying demands from multiple customers. Sometimes you just need an extra CPU and disk space to handle performance testing or a migration.

For example, I once needed two TB of disk space for a one time migration event. I had two data centers, one we owned and one that was hosted. My hosting partner allowed me to borrow the two TB of disk for a weekend to get through the conversion, without having to purchase it. There are also tools that allow you to spin up thousands of virtual servers in a cloud environment that would enable you to simulate a scenario of thousands of people trying to log on to a new website at the same time. These tools can provide the flexibility you need with just a phone call to your provider. They already have the supply waiting for you without any of the lead time that comes with procuring hardware and software, not to mention the installation itself.

Now let’s consider the conversation with your CFO. One of the tools of the finance trade is to capitalize the cost of large purchases over a period of time as allowed by GAAP (Generally Accepted Accounting Principles). That can split the cost of a purchase over a period of years, reducing the immediate expense of a large purchase. Although, the more you capitalize, the more “sediment” piles up in your future budget, which is not usable in those future years. Leveraging cloud-based solutions shifts the conversation from capital expenditures (Cap Ex) to operational expenditures (Op Ex). That means you are only paying for what you consume. That addresses the capitalized "sediment" issue, and the CFO gets a real view into the cost of running the IT shop.

There are costs that come with the cloud-based solutions. They may require longer term contracts to get the pricing you want, and if you are choosing to go with a private cloud-based solution, you are more than likely getting into a situation of just leasing hardware in someone else's environment. The cloud providers get their margins over economies of scale in the public cloud space.

If you are in a pay-for-processing arrangement, you need to have good governance in place. For example, data analysts tend to think disk and processing power is free. I've seen instances of Data Analyst's kicking off complex queries on large data sets on a Friday afternoon to run all weekend. Those costs can pile up quickly. You need to have clear controls on who can request what with the cloud provider. Analysts also like to retain all the data they’ve ever had, regardless of whether there is any actual business value.

Now the biggest discussion I have seen about the use of cloud-based solutions is around security and access to your data. I'm not going to engage in the religious debate around this, although I will provide a perspective. I was at Microsoft's headquarters a few years ago attending a CIO summit. The head of their Information Security was addressing the group of 200 CIO's. He proceeded to ask the group who had someone fully dedicated to Information Security. A fair number of hands went up. He then asked who had a small team focused on Information Security, and hands went down. He then asked who had a department focused solely on Information Security-almost every hand went down. He then proceeded to state that with the resources he had available to him, he was able to go out and procure the best Information Security experts on the planet. He then asked the group a rhetorical question. “Would you rather have your team, or my team securing your data?” This was in context of leveraging the Azure cloud.

While cloud solutions may not be right for every organization, they do provide access to resources that your organization may not otherwise be able to obtain. You clearly need to formulate a business case for why you need to leverage a cloud-based solution, so be able to clearly articulate the problem you are trying to address. You can then follow up with the other benefits I have referred to above.

Hopefully I have been able to stimulate some thought for your next cloud adventure. Happy Computing....

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