Updated: May 22
There are hundreds of articles about the cheapest place to host your digital estate; on-premises or public cloud. This often leads organizations to choose public cloud based on infrastructure costs alone.
Many people have said they don't want to use public cloud because their servers are cheaper in their own datacenter. Even when organizations do save by moving to public cloud, it can take years to see a return on investment based on infrastructure costs alone.
But in reality, these costs are a tiny fraction of the true value of public cloud. Make sure you read this to understand the true benefits, and why not being ready for public cloud could set you back years compared to your competitors.
The Competitive Edge
There is a significant initial ramp up for organizations to get comfortable deploying cloud resources quickly and securely. But once you get there, emerging technologies such as Artificial Intelligence, Machine Learning, and Blockchain can be deployed within an hour to just a few days on public cloud platforms. In general, it is much faster to deliver business value through cloud computing than with traditional on-premises computing.
What does this mean for your business? It means you can deliver the latest and greatest features faster than the competition, sometimes months or years ahead. Ultimately, this means more customers, and happier customers.
Every organization should at least be ready to use public cloud services. This does not mean move everything to the cloud. You need to be ready to respond when your biggest competitors start delivering customer value so quickly that you can't even keep up, let alone be a pioneer in your industry.
The best organizations aren't saving thousands of dollars by staying on-premises. They are spending thousands of dollars to generate millions of dollars in revenue and stealing your customers in the process!
Focus on Business Problems
There are many layers of the technology stack, each built on the next to ultimately deliver applications and data to your organization. But there is no business value in the lower layers. All of the business value is in the applications and data that speed up your operations and serve your customers.
Each layer that you manage means more operational overhead. Each layer removed is a higher percentage of time spent focusing on business problems instead of technology problems. A good reason to use public cloud services can be to focus more of your time and resources solving business problems instead of technology problems.
Low Risk Research
A big advantage with public cloud is the lower capital expenditure required to test out new technologies. Imagine a scenario where hundreds of thousands of dollars are needed for equipment to build new analytics capabilities. If the desired return on investment isn’t met, you are stuck with all this equipment being unused in your datacenter. You’re also at a severe risk of over or under provisioning exactly how many resources you need.
With public cloud, you can test new services and technologies with minimal risk. Pay per hour during experimentation and if it doesn’t provide the expected return, simple turn it off and stop paying. A good reason to enable cloud services is for testing experimental technologies without the upfront cost.
Elasticity is a valid reason to place workloads on the cloud. Imagine you are a greetings card producer. Your customer facing website is likely to be exponentially busier in the lead up to events like Valentines Day. Placing these workloads on the cloud allow you to run them much more cheaply for most of the year, scaling up only when the customer demand is high.
Attract Top Talent
The best talent wants to work on the latest technologies. This includes cloud computing. While it probably shouldn’t be a primary factor in using cloud workloads, it should be considered. Without a modern technology program, you may have difficulty attracting top talent. And without top talent, how will you compete in the market?
Furthermore, startups are not building datacenters. Most people agree that datacenters don’t make sense for new businesses. As a result, a gradual transition of skills will happen the same way that we saw a decline in mainframe engineers over the last few decades. By preparing for cloud computing, you won't get caught short when traditional computing expertise are scarce.
Use public cloud when it makes sense
Don't fall into the trap of thinking that public cloud is all or nothing, or that infrastructure costs alone should determine your direction. You don't necessarily have to move everything to the cloud, and there may be significant advantages beyond the underlying cost comparison.
Have you ever seen a grocery store that is slowly declining and going out of business? They appear dirty and cheap as management start trying to cut costs, leading to even less customers visiting the store. By contrast, the ones that succeed are constantly innovating and investing in new features to stay ahead of the competition. Your technology landscape is no different. Without investing in innovative technologies to stay ahead, your business will likely suffer.
Focusing on the underlying infrastructure costs as the main differentiator between on-premises and public cloud is a mistake. Tie your cloud operations to business value to get the most out of your cloud investments.
This article was Part 2 of our “9 things C-Suite executives need to know about Public Cloud” series. Follow us for more Public Cloud strategic insights!
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