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Data centers move to cloud apps, weigh SaaS pros and cons

Using cloud apps, not on-site applications, to run data center workloads can reduce the data center footprint, but consider the SaaS pros and cons.

Data center managers can lighten their IT burdens by moving some workloads to the cloud. But the transition to Software as a Service apps also introduces new challenges.

Moving to cloud apps frees physical space by decommissioning servers, and it moves a majority of expenses from an upfront capital expense to a consistent operational expense model, said Scott Schemmel, vice president of global IT at PGi, a software vendor based in Atlanta, Ga.

Five years ago, PGi had between 300,000 and 400,000 square feet of corporate data center space to host not only its internal applications but also the collaboration and conferencing software it provided to customers. Maintaining a data center of that scope required a significant capital investment that was primarily devoted to facilities -- things such as battery backups, generators and cooling.

"What we realized is we didn't want our capital dollars to go to air conditioning when it could be going to better support the business," Schemmel said.

That realization led the company to migrate its internal applications to Software as a Service (SaaS).

There's a lot of plumbing work involved with maintaining your own data center ... frankly there's not a lot of value in that.
Scott Schemmelvice president of IT, PGi

Now the company's data center footprint is approximately 10,000 square feet.

"There's a lot of plumbing work involved with maintaining your own data center, whether it's racking hardware or patching applications, and frankly there's not a lot of value in that," he said.

Indeed, running a data center is a costly proposition that he prefers to leave to companies that can achieve economies of scale.

"We can't match them on price or compute power so when it comes down to it, it makes more sense to leverage them for running our workloads rather than buy servers ourselves," Schemmel said.

More reasons to use cloud apps

As mobility, social networks and data analytics become more important to business strategies, organizations increasingly rely on the cloud to handle those workloads, said Kuba Stolarski, an analyst at IDC, a research firm based in Framingham, Mass.

In fact, reducing the data center footprint by moving workloads to the cloud can save companies money in a number of ways.

AMAG Pharmaceuticals Inc. in Lexington, Mass., reduced its yearly IT operations budget from $2.8 million to $900,000 by migrating to SaaS apps over a four-year period.

Moving off of Microsoft Exchange and Active Directory to Google's Gmail and Google Docs has cut email management costs, including hardware and data backups, from $400,000 per year to about $20,000 per year.

"The majority of our time and resources was dedicated to just doing infrastructure and security," said Nathan McBride, vice president of IT at AMAG.

Security is still a concern, but McBride and his team shifted their thinking on what security means when the company's data no longer resides behind a company firewall. Partnering with SaaS vendors that encrypt the company's data is a big part of the solution, as is implementing identity and access-based security measures.

The upside is the company no longer needs firewall technology or even VPN software.

Along with the change in security mindset, another critical component of the data center moving applications to the cloud affects is the network infrastructure, said John Little, CTO of Venture Technologies Inc., an IT solutions provider based in Ridgeland, Miss.

"Connectivity becomes the lifeblood of the organization," he said.

Little added that it's no longer enough to deploy a DSL connection from a local telecom or have a single Internet pipe. Instead, companies must consider deploying redundant Internet connections, beefing up bandwidth from 1 GB to 10 GB and improving the overall wireless network to account for the numerous mobile devices that will be connecting.

Not only that, but in cloud model "you need to have symmetric bandwidth," Little said. Asymmetrical networking systems, where the download bandwidth is greater than the upload bandwidth, can significantly hinder application performance, especially if large documents or files are being sent to the application, he said.

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