Hybrid Models Stand to Gain
The debate between public and private clouds isn't really much of a debate. As more businesses move their data to the cloud, the most likely scenario, particularly for larger businesses, is a hybrid strategy of both public and private clouds.
The idea of transferring corporate data and software operations to the cloud is usually accompanied by general concerns about security and privacy, as well as the necessity to adhere to strict compliance regulations. Weighing the benefits and drawbacks of both public and private clouds, the future is in a hybrid strategy where less mission-critical data will move to the public cloud and data related to core competencies will stay in the more easily controlled private cloud.
Concern over security and privacy is one of the biggest inhibitors to adoption of the cloud within all sizes of companies, said Marcia Kaufman, partner and COO of Hurwitz & Associates (www.hurwitz.com), a strategy consulting, market research and analyst firm. Businesses that are highly regulated under Sarbanes-Oxley, HIPAA and others (including industry-specific regulations, such as those that exist in the financial sector) have even more to be worried about when moving their data to the cloud.
However, as CIOs are further convinced that cloud computing is secure enough for their workloads and they realize the additional benefits of the cloud, more businesses will continue to migrate to the cloud. Although public and private clouds often seem to be positioned as an "either/or" scenario, the reality is that businesses are – and will continue to – adopt both for different purposes. One organization is likely to be using both public and private clouds, Kaufman said.
For the time being, though, the hybrid strategy will be restricted to larger enterprises that can either host a private cloud within their own data centers or afford the costs of outsourcing the private cloud to a large technology vendor such as IBM, she said.
"I think you can look at this certainly across different types of companies and sizes of companies," Kaufman said. "If you're talking about a small business and they are interested in perhaps using software-as-a-service such as Salesforce.com or a billing type of solution, and the small business without a data center is able to access and make use of the public cloud in a way that gives them the capabilities of a much larger business, you're not going to get into whether to use a public or a private cloud if you're a small/medium business."
The cost benefits of using the public cloud make sense for SMBs, whereas private clouds are still far too expensive for anything under the upper mid-market, Kaufman said.
Enterprises have the data centers already in place, so they can more easily construct and manage a private cloud, she said. Security is still a concern, though.
"But there's also this tremendous economic benefit that is possible from the cloud computing model, and so it makes a lot of sense to take a look at one's own internal data center and say 'what kind of workloads do we have and what makes sense for us in terms of being able to leverage the benefits of the cloud computing model' and look to re-envision the data center," Kaufman said.
The hybrid model is going to gain in popularity, she said. Choosing between public and private really depends on the type of data and the comfort level of the CIO.
"It's a complex situation. I think the way many companies are making this decision is based on the workload that they're looking at, so that how making decisions based on the type of data and the type of application, and also what kinds of internal resources they already have," she said.
For large organizations, it makes sense to use the public cloud solutions for CRM systems, email and other non-core systems. CIOs feel much more comfortable keeping private company data in the private cloud. In other words, the more sensitive the data is, the more likely it'll be kept in the private cloud, but Kaufman noted that it's not a "one size fits all" solution.
"There are lots of really large enterprises out there with very expansive data centers, so they can really create this sort of cloud environment," she said.
Small and emerging businesses really don't have a choice when it comes to the cloud, she said. They don't have the data centers or resources for private clouds, so any data that goes into the cloud has to be put in the public cloud. Even though there are surely security concerns about doing so (what happens if there's a breach?), the cloud enables smaller companies to get access to the kinds of computing power previously only available to enterprises.
"If you don't have a data center, it doesn't make sense, so you have to be large enough to have a data center. And the motivation to improve the efficiency of your data center is really a top priority for companies," Kaufman said.
The future is in hybrid clouds, particularly for large enterprises, she said. What data to put in the public cloud and what to put in the private cloud is a decision that has to be made by each individual company. When channel partners are working with customers to build out a cloud strategy, the general rule of thumb is that core competencies stay in the private cloud for the additional control and security, and other systems can be moved into the public cloud.
"I think in the future, the companies will really need to find a way to manage across these private and public environments," Kaufman said. "You can't really turn the clock back. There are lots of companies where there's highly regulated and secure data, but just the same there are people within those companies who are using their mobile devices and accessing the cloud without really thinking of it as cloud."
Usage policies regarding the cloud will become increasingly necessary, and there is still much work to be done regarding cloud management and corporate governance, she said.