Some Cloud services providers are finding that firms aren’t running to them at full-speed to migrate their infrastructure to the ‘new cloud world’ and for some reason, they are delaying decisions. Why might that be?
There are many articles written that suggest security and supplier stability is the biggest barrier, but I think there is another factor to consider.
Many firms have already invested in their in-house technical infrastructure, often running a virtualised server and storage (SAN) environment (referred to as a ‘private cloud’). These firms will need a ‘step change’ to help ‘push’ them to a cloud service. What could a step change be?
- Current data centre runs out of space or requires significant investment. For example, air conditioning replacement, new UPS or a new fire suppression system.
- Current technical infrastructure requires a significant upgrade or replacement due to age, capacity or performance. For example, if a firm is still operating separate physical servers with no virtualization, migrating to a cloud service would be a good opportunity to reap the benefits of virtualization.
- Premises relocation, which would require an in-house hosted data centre to be rebuilt in a new location.
- Additional premises capacity required by the business, forcing the data centre to move out of the firm’s premises to a hosted service.
- Segregated infrastructure. For example, suppose a firm only hosts and operates systems that are used in-house with no external client access. If a new requirement was to offer Internet facing services, there would be a strong argument to physically separate the different infrastructure.
- Introduction of disaster recovery services.
So that is some of the step changes that would make it the right time to consider cloud services. However, there are situations when a cloud service might be unattractive.
- When the computing capability can be sourced by simply upgrading the current infrastructure. For example, if additional storage and processing capacity is required, it could be achieved by a relatively low incremental investment in additional disk for a current SAN and an additional virtual server host.
- When the infrastructure that would be replaced by the cloud service was purchased and not fully depreciated. For example: Let’s assume that the firm’s depreciation policy is five years, that the infrastructure cost £100,000 when purchased and has been used for two years. A financial ‘write-down’ of £60,000 would be incurred (the remaining depreciation amount). In many companies this would be added to the project cost – making it an unattractive proposition financially.
- When the infrastructure that would be replaced by the cloud service is leased and not at the end of the lease period. As with the previous point regarding depreciation, the remaining lease costs and sometimes an early termination penalty could be added to the project cost – making it an unattractive proposition financially.
I’m not arguing against cloud services – far from it – I am a cloud advocate. I am suggesting some reasons why firms haven’t rushed to migrate everything to the cloud.
For some Cloud providers, the best marketing strategy could be to ensure prospective clients understand your service capability, then wait until the time is right.
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