The word cloud pervades current technology news: businesses are moving to the cloud, everything is stored in the cloud, you need to secure your cloud and so on. Business leaders are at least vaguely aware of the massive shift that’s been happening for the past several years, but many don’t know how to address it or harness it to increase productivity. The Microsoft Azure and Amazon Web Services (AWS) cloud-computing platforms have captured large shares of the public-cloud market; companies that lack a public-cloud presence often wonder how to engage these platforms and whether they should use them. Recently, new terms such as hybrid cloud have entered the lexicon and created additional confusion in the market.
Hybrid cloud is actually straightforward. It’s simply the combination of private-cloud resources in a private data center with additional resources in a public-cloud platform such as Azure or AWS. Those resources can operate independently under different management consoles (often called multicloud), or they can work together under the same console, per the user‘s preference. Although some companies, particularly those founded in the last few years, pursue a 100% public-cloud strategy instead of installing their IT infrastructure in a private data center, many others are pursuing hybrid- or multicloud strategies. There are some good reasons for that approach.
In a private data center, a business typically gains several perceived benefits, including improved control, enhanced security, and reduced latency. Because no ongoing communication takes place with a public platform, businesses feel like they have more control in making changes to their environments, that their data is less vulnerable to external hacking and that communication latency between systems is lower. Some of these points are arguable, but many businesses feel that maintaining their private environments is necessary.
Yet a private data center has many limitations. First, it’s generally more expensive than similar functions in the public cloud. Azure and AWS, for example, have tremendous economies of scale, and a private business is simply unable achieve the same compute and storage costs that those platforms offer.
Also, businesses running a private data center must pay the entire cost of their space, power, servers and the like, regardless of whether their utilization is high or low. The IT administrators in those businesses face hardware obsolescence every 18–24 months, keeping the business in an ongoing capital-expense cycle. Furthermore, the security of their private environment is a major concern, particularly if they’re storing personally identifiable information now that the GDPR is in effect. This situation leads to overacquisition of cybersecurity point solutions and, in turn, often leads to alert fatigue and unnecessary hiring of security professionals to manage the explosion of activities and investigations in a SIEM or similar group.
At 5nine, we believe the future will be dominated by hybrid configurations that allow enterprises to cut expenses while taking advantage of the scale and flexibility that a cloud platform provides. We expect some enterprises will continue to maintain applications in their private environments for the foreseeable future, but the benefits of “going hybrid” are too valuable to ignore, and competition will drive businesses there.
Companies that are contemplating the jump to a hybrid-cloud model have several considerations. First, they must understand whether the applications that are critical to their business need on-demand elasticity as they scale up or down. Small applications, and those having few integrations with other applications, can also be good choices for easy deployment to hybrid or other clouds. Data sensitivity is another concern. Companies will often prioritize the applications they’re moving to a hybrid cloud by starting with those that have relatively low data sensitivity and therefore low security risk.
Connectivity is also a factor in the decision. Acquiring a dedicated private connection to whichever cloud platform a business chooses is critical for several reasons. Virtual private networks (VPNs) available as a service from the major platform vendors are common choices for this purpose. A VPN allows a business to use a highly secure path to run virtual machines and applications in the cloud, essentially making the cloud portion of the hybrid model an extension of the private data center. A latency benefit also comes with communications traffic moving along the VPN and never over the public Internet. In addition to setting up dedicated connectivity, businesses can generate large returns by deploying software that allows them to monitor, manage and secure their virtual machines and ensure that they have proper role-based controls, as well as robust disaster-recovery plans.
A major benefit to moving at least some portion of a company’s IT to the cloud is the ability to participate in software marketplaces. For example, the Azure marketplace alone has thousands of software applications that can seamlessly integrate into the Azure portion of a hybrid deployment—and all are certified for and optimized to run on that platform. In many cases, businesses can pay for the software in a way that they couldn’t if they contracted directly with a particular vendor: by the hour, for example. In addition, they can avoid some of the fine points of vendor contract negotiation as well as locking into long-term contracts and then realizing the software is a poor fit.
Even better, for large businesses that already have software licenses for their private data center, Azure allows them to “bring your own license” (BYOL) and thus extend those licenses quickly and easily to the public cloud. For vendors, it creates a rich environment of prospects, which otherwise might take years to reach, that can easily view and demo their software. This situation generally leads to the best software vendors achieving more success, more quickly; in turn, their customers get the most productivity benefits, allowing them to focus on their core business and worry less about what’s happening in their IT environment.
In summary, the most successful businesses over the next decade will be those that create a hybrid-cloud IT environment. They’ll be able to flexibly and seamlessly take advantage of both cost-effective commodity cloud infrastructure as well as the latest cutting-edge software, and they’ll be moving at a speed that competitors can’t match.
About the Author
Scott Sanders is CEO for 5nine Software. Scott is a talented and seasoned executive with over 20 years of experience in software-as-a-service (SaaS), cybersecurity and communications. He brings a wealth of expertise with strengths in areas such as early-stage business scaling, profit and loss (P&L) and cash-flow management, strategic and go-to-market consulting, and mergers & acquisitions.
Scott formerly served as SVP/GM of Security Services for Verisign, an S&P 500 company (Nasdaq: VRSN), where he had full P&L responsibility for Verisign’s security lines of business. In this role, he was responsible for all of sales, product development, marketing and operations. Also at Verisign, Scott served as head of corporate strategy for the company, as well as head of corporate development (M&A). He's also a Venture Partner for Blu Venture Investors, a growth-stage venture-capital firm based in Washington, D.C., in addition to serving on the board of directors for the National Cybersecurity Society, a D.C.-based nonprofit dedicated to helping small and medium-size businesses with their security posture.
Scott holds a master’s degree in business administration as well as undergraduate degrees in finance and political science from Virginia Tech