First a shout out to both Steve Kaplan and Jeff Sussna for encouraging this post. This post is a continuation from the post Eight ways enterprise struggle with public cloud and delves into the reasons why public cloud can be 4x the cost of corporate data centers.
Enterprises often look toward public cloud as a cost savings measure. Cost savings is the first stage of the enterprise maturity model leverage cloud. The thinking is that public cloud is less expensive than corporate data center options, right? Yes and no. Enterprises are learning the hard way that public cloud is not less expensive than corporate data center options. Why is that the case and can anything be done to change the outcome?
AN ANALOG MODEL
First, it is important to understand the differences in usage behavior between enterprise applications leveraging corporate data centers versus public cloud. An analog is the difference between buying a car versus renting it. In this analogy, the car represents infrastructure. Which is better? Which is less expensive? To answer those questions, one first needs to understand usage behaviors.
Assume for a minute that you were accustomed to purchasing a large car. Whether you used it every day or not, it would sit, running, ready whenever needed. Some days you only need one seat, while other days, you need all five seats plus lots of luggage space. In this model, you pay for the large car whether used or not.
Now, imagine those assumptions, but rather than purchasing the large car, it is simply rented. The large car is rented full time, running and ready whether used or not.
In Scenario B, a premium is paid for the ability to rent the car. Yet, the advantages of 1) renting the car only when needed and 2) renting the size of car most appropriately needed are lost. The large car is rented whether needed or not.
Like the car model, enterprise applications are built around a model that assumes the large car is available 24×7 even though you may or may not use all its capacity or every day. Enterprise applications are accustomed to purchasing the car, not renting it. Purchasing makes sense for this behavior. Yet, when moving enterprise applications to public cloud without changing the behaviors, the advantages of shifting the model from owning to renting are lost.
BEHAVIOR AND ARCHITECTURE CHANGES OUTCOMES
Changing the behaviors of the enterprise applications when moving to public cloud is the right answer to address this issue. However, that is easier said than done. Adding orchestration and automation within an application to leverage resources when needed and returning them when done often requires a significant architectural change or a complete application re-write. Both options are significant and work against any potential cost savings for public cloud.
Adding another wrinkle to the mix is that enterprise applications are architected to assume that infrastructure is always available. That means that redundancy and resiliency is maintained in the infrastructure, not the application. Public cloud infrastructure is not built with this redundancy and resiliency. Public cloud requires the application to carry the intelligence to address infrastructure issues. Shifting intelligence to the application is yet another significant architectural challenge for enterprise applications.
Note that these architectural changes bring added value beyond efficiently leveraging public cloud. Those changes include agility and responsiveness to an ever-changing business climate.
CAN ENTERPRISES STILL LEVERAGE PUBLIC CLOUD?
With these significant hurdles and those addressed in Eight ways enterprises struggle with public cloud, it is easy to see why enterprise public cloud adoption is relatively sluggish. Yet, CIOs still need to get out of the data center business and public cloud is a fine option for those applications that make sense. Between public cloud and corporate data centers, which model is ultimately better? It depends on the needs and behaviors of the applications along with the capability of the organization.
It is important to take a minute and think about the path to public cloud. It is also important to understand that not all roads lead to public cloud. Avoid the potholes, plan accordingly and leverage the benefits.
I came across your blog and first of all, I love your comments about different topics you are covering.
However, I was wondering how did you come up with the statement that a public cloud solution could be up to 4x the cost of running e.g. applications in your private DC. Is it based on the subscription models provided by the CSP’s, or the cost associated with migrations to the cloud ? If you could provide more details that would be great.
I went through a lot of your other blogs to find an answer to my question but was not able to find it.
Anyway, great work again and I am looking forward to reading more of your blogs from now on !!!!
Thank you for the comment Thomas. You may find this post has some of the details you are looking for.