Today, a growing majority of successful businesses are data driven; but running an in-house data center is often not the best choice for these companies – particularly when it’s unrelated to their core business. Data centers require a complicated infrastructure, and they are expensive. Increasingly, companies like Uber are outsourcing that function to cloud computing services like Oracle with the idea that they can simultaneously increase innovation and cut costs. But public cloud services aren’t necessarily a cure-all. A “hybrid cloud strategy” may be a better alternative.
- Many businesses don’t fully realize their aims when they move to the cloud.
- Cloud computing may help your company cut costs, but that’s not true for all business operations.
- Increasingly, companies may adopt a “hybrid cloud strategy.”
Many businesses don’t fully realize their aims when they move to the cloud.
Companies usually have multiple aims when moving their digital operations to the cloud. One of these goals may be straightforward cost-cutting; but, in and of itself, a shift to cloud computing is unlikely to allow businesses to achieve their desired outcomes. According to a 2023 PwC survey, more than 50% of surveyed companies have yet to achieve the goal that prompted them to embrace cloud computing in the first place.
“An IT-centric ‘lift and shift’ approach to moving to the cloud is not enough to make a difference. This is where businesses can miss out on opportunities.”
Migrating to the cloud can help companies shift expenses away from capital investments to operational expenditures. Still, as a way of lowering expenses, moving to the cloud is a far-from-straightforward prospect. It’s easy enough for a business to find itself paying for cloud services in a way that’s out of proportion to the extent to which they use those tools.
Cloud computing may help your company cut costs, but that’s not true for all business operations.
The “lift and shift” model of transitioning to cloud services involves simply moving everything on a business’ servers onto a cloud platform, typically a “public cloud” platform hosted by a major provider like Oracle or Alibaba. Moving all of a company’s operations onto the public cloud made more sense during the COVID-19 pandemic, when companies’ goals included making it easier for nearly all people to work from home.
“Businesses are looking at specific workloads and choosing appropriate cloud services to fit.”
Today, companies can evaluate their workloads according to specific criteria, such as cost and “data sovereignty,” and choose cloud services accordingly. Consistent workflows often function better with a “private cloud” arrangement, whereas a less consistent workload is better off on a more flexible, easily adaptable public cloud service.
Increasingly, companies may adopt a “hybrid cloud strategy.”
The cost of public cloud services is on the rise, in part due to inflation. Thus, the trend of companies moving away from public cloud platforms with large providers and adopting a hybrid strategy seems likely to continue. A report on digital infrastructure for 2023 predicted that, moving forward, companies that use a hybrid strategy, involving both public and private clouds, will be best situated to weather periods of economic uncertainty. The report also suggests that companies that can make the best use of a hybrid strategy will benefit in terms of increased productivity and revenue.
“Cloud computing is not the panacea for managing costs during a recession. But, provided it is managed carefully, it will certainly help.”
How the mix of cloud services ultimately works will depend upon individual companies and the nature of their workloads. The hybrid cloud strategy may make expense management easier, though it will also involve a more complex and expensive infrastructure. “FinOps” may help manage cloud expenses; but during recessions or economic downturns, companies will need to have clear plans for how they will balance other priorities, including automation and customer experience, with cloud computing service costs.
About the Author
Marc Ambasna-Jones is a writer with over 25 years’ experience in the technology and business sectors. He has written extensively about artificial intelligence, the internet of things, robotics and the future of work in a wide range of national newspapers and trade titles.