When Private Cloud May be Cheaper Than Public?
Businesses gravitate towards the public cloud to decrease IT expenditures and boost agility. And for most companies, that's the best place to get those much-needed competitive advantages. However, large organizations may reach a stage in their public cloud evolution where having their own private cloud is actually cheaper.
Large organizations frequently have persistent "always-on" workloads that they try to solve with unique contracted rates in the public cloud, but the ROI could still be a problem. According to a report by 451 Research, Commercial private cloud providers such as VMware and Microsoft offer a reduced Total Cost of Ownership when labor efficiency is below 400 virtual machines maintained per engineer due to the abundance of adequately competent administrators. Of course, every use scenario is unique, and finding the proper balance without the right knowledge and skills can be difficult.
However, this doesn’t imply that the private cloud will replace the public cloud.
In reality, even for large organizations, the optimal approach is often a hybrid of public and private. For example, they can choose to put their apps and sensitive client data in the private cloud while using the public cloud for cost-optimization of workloads like hosting corporate emails, increasing productivity and collaboration capabilities, etc.
Alternatively, private cloud infrastructure could be used to host older application architecture with longer-term workload requirements.
How do you know when to migrate to a Private Cloud Infrastructure?
Perhaps your company is still depending on legacy infrastructures, and you are considering whether to adopt a private cloud right away or refactor for a public cloud. If this sounds like your situation, it's best to take professional advice before making a decision.
Our Professional Cloud Services can walk you through the complete process, from planning and assessment through migration and optimization. So you can get the best mix of technologies and platforms for your specific requirements.
Final Thoughts
Private cloud has long been marketed as the premium option or a high-end enterprise grade service necessary only for mission-critical processes. The media and others pushing the underlying technology frequently emphasize data protection, ownership, and control as reasons for going private. Many believe public cloud to be the conventional solution when it comes to total cost of ownership (TCO) particularly for cost-conscious organizations. This is unsurprising given the hyperscalers' periodic price reduction and the resulting media attention. However, this is not an accurate summary.
In a recent study of 150 IT decision-makers, 41% claimed to be running their own private clouds at lower unit costs than the public cloud. A further 24% of respondents polled claimed they paid less than a 10% premium for their private cloud. Private cloud adoption is not primarily motivated by cost savings compared to public cloud. The most preferred benefit of a private cloud was data protection, followed by asset ownership and connection with corporate processes. Cost benefits, on the other hand, are still important: More than half of those polled said cost-effectiveness was a major factor in their choice to adopt a private cloud.
Many people believe that the public cloud poses too many threats in terms of data security, performance, availability, and cost.
With private cloud end users can appreciate the benefit of having complete control and ownership over their infrastructure, data, and apps in any scenario. Many CIOs believe that improved security, SLAs, compliance, and performance are important factors in their decision to use a private cloud.
Keep An Eye Out For Our Upcoming Posts:
We'll be providing articles, e-books, tools, and white papers on the following topics over the next few months:
The stages of information technology transformation
How to avoid stumbling blocks and landslides on your journey
Success stories from Digital Transformations and Cloud Adoption
Intriguing Questions For Forward-Thinking CIOs
Managing knowledge gaps within organizations
These resources are designed to provide industry insights for enterprise cloud management. With AiRo's professional cloud services, you can begin your IT transition right now.
Please contact our Cloud Service department to know more.
About AiRo
AiRo Digital Labs is an award-winning, global leader in AI and Hyper Automation led innovation for the healthcare ecosystem. We partner with Fortune 500 clients in the Healthcare, Pharma, and Life Sciences industry to address the challenge of applying AI technologies to augment and enable human effort, and to remove the inefficiencies in the care spectrum. We specialize in the emerging technology fields of Artificial Intelligence, Machine learning, Robotic process automation, chatbots, conversational AI, Natural Language Processing, data analytics, premium cloud services, Industrial IoT, and other AI technologies.
