Options for outsourcing IT services to the cloud

If your business is thinking about outsourcing IT services to a cloud provider, it's important to look at the differences between the options.

Outsourcing IT services to a cloud provider is an appealing option, but the decision between keeping IT on-premises

and moving to the cloud is not black-and-white.

In the past, when a data center started to run low on space or resources, the first plan of attack would be to relocate to a new data center or to build an entirely new one. With increased financial restraints, IT must now explore cloud outsourcing to cut costs and improve efficiency.

Cloud providers and related technology are still maturing, so IT executives need to be aware of the pros and cons and, most importantly, know whether cloud (and how much cloud) is right for their particular organization.

The Continued Need for On-Premises IT

The best ways to make the outsourcing decision are evaluating whether your internal resources match your operational goals and taking a close look at your application environment.

Even companies that choose to keep things local for now should consider how cloud technologies may affect them in the future. But if you're faced with an overcrowded or inefficient data center and are considering outsourcing, the first questions should still be the following: Do you need to upgrade your hardware? Do you take the virtualization plunge or improve your current virtualization strategy? Do you need to switch vendors or technologies?

And when it comes to internal resources, it's not just about the servers, storage and related infrastructure. It's also about the business processes that accompany them.

Let's use application monitoring as an example. If you move an application to a public cloud provider, how will your current monitoring systems fit into the picture? When you deploy an outsourced environment, monitoring is dependent on the application, provider and cloud environment. You may find that, because of the abstraction levels of the cloud provider, you don't get the necessary data from your typical application performance-monitoring tools. This means either customizing your existing cloud-monitoring technology or starting from scratch with a new solution. For some applications, the cloud benefits may not be worth the complications.

Depending on the complexity and history of certain applications, keeping them local can save you significant costs. While corporate email is a definite candidate for outsourcing -- as there are plenty of service providers out there to ease uptime headaches and management burdens -- customized legacy applications are another story. Outsourcing these applications requires a great deal of knowledge transfer, in addition to repositioning internal resources that were tasked with management prior to outsourcing.

Evaluating off-site cloud deployment models

If consolidating or upgrading your internal resources just isn't cutting it and your applications seem like cloud candidates, then making the move to cloud services is a realistic option.

The cloud is basically the repackaging of conventional technologies you know and love (servers, virtualization, storage, network, etc.) that are billed "as you go" and hosted off-site by a service provider. Some vendors require minimum commitment levels; others are purely based on usage. Either way, if you fail to properly evaluate your applications and how they support your business, you can see expected savings disappear.

With outsourcing, an organization can save money and gain flexibility in features, especially when compared to a capital expenditure model (which involves large upfront costs for hardware and software, rather than lower monthly amortized costs over a given contract term). For example, if you wanted to enable bicoastal disaster recovery with an off-site backup and archiving solution, the hardware costs alone would raise eyebrows. But if you can leverage the infrastructure of a cloud provider, the price structure is scalable and those formerly expensive features become attainable.

With all cloud deployment models, operating costs may eventually hit an inflection point at which it becomes cheaper to manage certain processes and applications in-house. That point is different for each company and risk scenario. It pays to understand vendor solutions and map out the pricing for not only the initial costs, but also the long-term costs as your needs evolve.

Here's an overview of your cloud outsourcing options:

  • Public cloud. These are vendor-provided environments that allow you to park your workloads off-site. They can be turnkey and customized to your requirements. Pricing models can be "pay as you go," in addition to a monthly subscription. Solutions in this space are usually multi-tenant, so expect price savings, but also realize that the provider's hardware may not be dedicated for your use. Many companies avoid the public cloud for their mission-critical applications because of security and compliance concerns.
  • Hybrid cloud. This combination of at least one private and one public cloud allows for shifting workloads, but requires some additional management tools. The upside is that you have a scalable, flexible environment that avoids some of the potential risk of the public cloud, but does so at the expense of a more complex application architecture. You also have a more complex cost structure to manage. But, for some companies, this option may be the key to finding the most effective way to balance performance, cost and operational efficiency.
  • Hosted private cloud. Private cloud typically refers to a local cloud installation, but some companies offer the same functionality as a managed service. If you build your own cloud, you get to build out the environment you want. With hosted private clouds, however, the menu of choices will, most likely, be more limited -- even if the hardware is dedicated for your use. Also expect hosted private clouds to be priced differently. Since they can mean dedicated hardware, storage and networking, those costs will be baked into your bill.

Another off-premises option for cloud deployments is colocation, which means setting up your own environment, but relying on another data center operator for the power and cooling (and potentially network). Colocation providers have been moving up the stack to provide services, in addition to space and power. Some providers even offer cloud solutions that allow you to transition between technologies, either with their own cloud products or via partners. While this solution can save money on operating costs, it may require hardware to make it happen, and your role will encompass vendor management and monitoring of the data center, in addition to the application/server environments.

About the author
Pete Sclafani is the CIO at 6connect, a provider of network automation services.

This was first published in April 2013

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