Public Cloud Computing Services: A Complete Guide for CIOs

Choosing between the public cloud and on-premises infrastructure requires careful strategy and due diligence

Public cloud computing services are all the rage among business executives. But have you ever stopped to wonder why? Many of these leaders have heard (from cloud companies) that they can run more efficient infrastructure if they move it to the cloud. They see their competitors moving to the cloud. They figure it must be the right thing to do, so they follow the crowd without doing their due diligence. That can have catastrophic consequences for employee productivity and operational costs.

The public cloud is a powerful tool, but it’s not the only option, and it may not be right for your organization. Here’s how to evaluate your infrastructure needs, survey the possible solutions, and pick the one that best fits your business.

Is the Public Cloud Your Best Infrastructure Option?

Many companies take it as given that using public cloud computing services is part of the cost of doing business. That kind of thinking can cause otherwise savvy businesses to waste up to 50% of their IT infrastructure budget on services they don't really need. Why does that happen? Because of three key factors:

• Status Quo Thinking: Many of these organizations prefer not to expend the time, money, and personnel it would take to evaluate other options — even if doing so would lead to long-term savings.
• Fear of Risk:  It's possible that the alternative solution you implement won’t be right for your company. Undoing it and switching to the public cloud may lead to wasted resources. But in today’s fast-paced business environment, too much risk aversion could lead you to stagnate while your competitors innovate, ultimately putting you behind the eight ball.
• Herd Mentality: From outsourced data centers to NFTs, herd mentality has led countless businesses to overinvest in hot trends before they understand exactly what they’re buying. Just because others have invested doesn't mean they've done their due diligence. You still need to do yours.

Embracing Change

Getting your systems up and running quickly has value. Outsourcing complicated elements like payroll and HR makes sense, especially when resources are pinched in the early days of your business. But as your business grows and changes, the best solutions for it may change, too. If you've spent a few years in the public cloud, it may be time to audit whether your investment there is still generating enough value. And if you find it's not, don't be afraid to choose a new option. Your newfound efficiencies may give you the edge over your competitors.
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For more on the value of cloud computing, read Understanding the Business Value of Cloud Computing.

Public Cloud or On-Premises: What's the Difference?

Every business has its own specific needs when it comes to cloud usage. Yours might be more compute-intensive, while someone else might need a lot of storage. These factors affect which IT infrastructure makes the most sense. In general, wherever workloads are unpredictable, the public cloud can work well. However, if demand is more stable, on-premises can be much more cost-effective.

On-premises

• Hardware and storage: Hard drives, servers, and racks have to be bought and managed.
  
• Staffing: Staff skilled in building and managing infrastructure must be hired.
  
• Scalability: New hardware must be purchased to meet growing demand.
  

Public cloud

• Hardware and storage: Rented at an hourly pay-as-you-go rate from external server farms.
  
• Staffing: Staff skilled in managing, configuring, and tracking cloud usage must be hired.
  
• Scalability: Additional infrastructure can be rented on an as-needed basis.
  

How Do You Choose On-Prem vs. Public Cloud?

It can be hard to nail down apples-to-apples comparisons between on-prem and public cloud computing services — but it's not impossible. The two most important factors to consider are how each option affects day-to-day operations and the organization as a whole.

Operational factors include how a solution meets your workload's performance, security, and capacity demands. Organizational ones are less tangible, such as whether a board member has a contact at one provider, or whether your team has already been trained to use and maintain an on-premises network.

After you've rated each solution from one to five on these factors, you can research individual cost factors:

• Servers and appliances
• Storage
• Warranty support
• Licensing
• Rackspace
• Power and cooling
• Staffing
• Training

The results of that research will help you decide which option is best for your business.

To learn more about choosing between on-prem and cloud infrastructure, read Public Cloud vs On-Premises Cost: Which Is More Effective for Your Business?

The Hidden Costs of the Public Cloud

One day, public cloud computing services may reach the efficiency of a public utility like gas or electricity. Cloud companies are reaching toward that goal hoping that businesses will hook into their systems without a second thought. But that's not where we are today. Until we hit that level of efficiency, it's important to evaluate the cost of the public clouds — including the hidden ones.

There are three basic components of cloud computing costs: compute, storage, and networking fees. Examining your historical usage rates for each will give you data to project how spend will increase as your business grows. But the true cost of public cloud computing services lies in migrating into or out of them.

Migrating and Public Cloud Costs

Moving all your apps and data to the cloud has an enormous price tag in terms of working hours. Throughout the process, you'll have to run two separate environments on different operating systems or hypervisors. You'll have to keep track of both, pay for them, and account for the differences in price for the duration of the migration. Plus, your employees will have to split time between the two. That's not exactly ideal for productivity.

Should You Refactor?

A lot of the value of being in the public cloud comes from the efficiencies of being "cloud native." If you want to enjoy those efficiencies, you'll need to rework all your systems and data. That has a huge upfront labor cost, and it also means your employees are stuck reworking old stuff instead of generating new value.

Tracking Cloud Usage

If you opt into the public cloud, you'll need to monitor your usage to ensure you're still spending efficiently. Cloud providers are happy to let you pay for more capacity than you're using, so you'll need a third-party solution like NCM Cost Governance to stay on top of your costs.

For more on the hidden costs of public cloud services, read How to Calculate Public Cloud Costs for Your Business.

How to Migrate to the Cloud

There are four common strategies businesses typically consider when moving to the cloud. Each has pros and cons.

Lift and Shift

Lift and shift migrations simply take the applications out of your current on-premises data center and put them in a public cloud data center. This strategy is fast and has a low upfront cost, but it doesn't take advantage of the efficiency benefits offered by the public cloud. That means you may end up paying double for the same outcomes you had before.

Refactoring

Refactoring means rebuilding your apps so that they're optimized to run in the public cloud. That helps boost efficiency, but it has an enormous upfront cost in terms of time and effort. Many businesses that attempt refactoring never complete the process because it's so much work.

Lift and Shift on Bare Metal

In this strategy, you move your infrastructure onto private compute environments instead of public, shared ones. These private environments are still operated by a provider like Google Cloud, but they let you maintain direct access to your hardware, which means more control and the potential for faster, more efficient systems.

This option's main drawback is its cost. In the public cloud, you're sharing infrastructure with other users. That helps keep costs down. Leasing your own private infrastructure removes that subsidizing effect. Plus, if you don't refactor your infrastructure, your efficiency gains may not be as big as you expected.

Hyperconverged Infrastructure (HCI) on Bare Metal

Hyperconverged infrastructure places a software layer between your hardware and your applications. This lets you run your apps as if they were on-premises, which means deeper configuration options and more efficiency without the need to refactor. The software layer basically refactors for you, saving you time and effort that helps offset the cost of the bare metal hardware and software integration.

For more on how to migrate your business to the cloud, read Understanding the Different Approaches to Cloud Migration Strategy.

Cloud Repatriation: How Shifting to On-Premises Can Help Your Business

Cloud repatriation is the process of shifting your workloads, apps, and data out of the public cloud and into on-premises infrastructure. If you've done your homework and found public cloud computing services aren't the right fit for your business, you're not alone. Even if it seems like every organization has moved to the public cloud, surveys show that up to 80% of them are repatriating at least some of their data back to on-premises infrastructure each year.

Why? For several reasons:

• Cost reduction: Using the public cloud often means paying 30% to 50% more than you would for on-premises infrastructure.
• Improved performance: On-premises infrastructure tweaked to your specific needs can perform better than off-the-rack cloud infrastructure.
• Bad experiences: Using the public cloud means opening your business up to unexpected downtime, hidden fees, poor customer service, and plenty of other negative experiences.

How to Complete Cloud Repatriation

Some organizations that have realized the public cloud is wrong for them still haven't repatriated. They may feel that repatriating isn't a priority, or that the process will take too much time and effort. But the truth is that repatriation will help their business in the long term, isn't complicated, and likely won't require more resources than you have on hand.

You can begin the process with an inventory of your existing infrastructure and a comparison against the workloads you're running in the cloud. This will reveal how much new infrastructure you need (if any) and give you a starting point for configuring your on-premises systems. Matching your on-prem configuration to your cloud configurations will make it easier to pull your data out of the cloud and plug it back in smoothly. Once it's all out, you can deactivate your cloud operations and start saving.

For more on repatriation, read How to Approach Public Cloud Repatriation in 2024.

Hear From the Experts

If you’re still unsure whether the public cloud is right for your business, don’t worry: We’re here to help. At Roundstone Solutions, we’ve helped countless companies take stock of their needs and find the cloud solution that saves them the most time and money without compromising long-term growth. For actionable answers to your cloud questions, contact us today.