So Long, Hardware: Tech Spending Sinks on Land, Soars in Cloud Computing

By Editorial Staff / Technology / Last Modified: February 22, 2017

Spending on computer hardware is declining while spending on cloud services is booming. Should your business spend more in the cloud?

Thinking about your company’s tech investments? How much of your thinking is up in the cloud? For many companies, the answer is: A great deal.

According to a 2015 RightScale survey of the latest cloud computing trends, 93 percent of the respondents reported adopting cloud services.

Eighty two percent of enterprises have a hybrid cloud strategy (i.e., a mix on-premises, private and third-party public cloud platforms), up from 74 percent in 2014.

As The Wall Street Journal reports, there is "a shift toward purchasing virtualized, digital services that replace physical equipment."

The promise of technology all too frequently becomes the disappointment of technology. Sometimes that’s because the technology overpromises. But perhaps what is most often the case is the implementation of the technology wasn’t totally thought out and/or rightly executed.

If, to paraphrase The Rolling Stones, you want to get onto the cloud, here are some key considerations to ponder.

What Do You Want to Achieve Up in the Cloud?

Other than the fact that other companies are moving to the cloud, why are you thinking of jumping on the cloud as well? As The Open Group points out, there are many reasons why you’d want to consider adopting cloud computing, the main one being a greater flexibility.

Consider using the cloud if you’re looking to do any of the following:

  • Reduce/optimize IT expenses
  • Simplify IT infrastructure
  • Improve adaptability to address quickly changing business conditions and more rapidly support rapid go-to-market strategies
  • Provide remote "access from anywhere" capabilities
  • Improve employee and partner collaboration and productivity
  • Reduce carbon footprint by consolidating servers and using resources more efficiently with less energy expenditure

Related Article: Sky-high Computing: The Innovations That Prove the Cloud is The New Normal

Do Your Research

It almost goes without saying. Here are a few things you want to know about any cloud platform.

  • How secure is it? Well, no service is going to say that, gee, we aren’t terribly secure. What you want to know is how the cloud provider manages data security, its history of regulatory compliance, and its data privacy policies. If a cloud service has clients that deal with confidential and sensitive information you can have some degree of confidence they’ll handle your data in a similarly secure fashion. Still, nothing is 100 percent fool proof. Don’t assume that it’s going to be. Plus, you need to do your part as well. The Cloud Standards Customer Council emphasizes, "Responsibility over aspects of security may be split between the provider and the customer, with the potential for vital parts of the defenses to be left unguarded if there is a failure to allocate responsibility clearly."
  • How much is this going to cost? While this may seem like, "Duh, you think I wouldn’t think of that?" kind of advice, be aware that there are a lot of caveats to knowing exactly what a service is going to cost. SearchCloudComputing stresses the need to "write rock-solid service level agreements to ensure service levels are being met... to ensure cost-effective use."
  • Public or private? A private cloud is devoted to a single organization and uses a proprietary architecture. This is the best choice for mission-critical and high-security uses — you have more control and greater reliability for what is essentially a variation of your company’s tradition data center functions. The downside is a private cloud generally costs more than a public cloud, where a third-party provider is offering the service to multiple clients. A pubic cloud is also much more scalable, as you can purchase more storage or reduce it as business needs dictate. Akamai notes that, "In a public cloud scenario, capital expense is virtually eliminated; the financial burden is shifted to a fee-for-service, often based on utilization and data volume. Maintaining and securing public cloud infrastructure is the responsibility of the vendor, enabling the customer organization to streamline IT operations and minimize time and money spent on system upkeep."

Related Article: Data Diaries: Why the Cloud May Be Safe Than You’d Suspect

How Much Do You Already Have at Stake?

Cloud services are particularly suitable for startups because they enable them to get operational quickly, without the investment expense of on-premises equipment. But what if you already have a considerable investment in on-premises servers?

"Outsourcing a server’s data and/or functionality to the cloud may mean abandoning your on-premises investment unless an-on premises server can be repositioned," Brien Posey points out in his article for SearchCloudComputing, adding, however, that, "No matter how good it is, any server hardware eventually becomes obsolete.

Enterprise-class organizations have traditionally coped with this expected obsolescence by adopting a hardware lifecycle policy. An organization, for example, might choose to retire servers after five years.

That being said, an organization could integrate a cloud services roadmap into its hardware lifecycle policy. Doing so allows IT teams to migrate on-premises resources to the cloud instead of moving them to newer hardware."

This is also why companies typically adopt a hybrid strategy in which some functions are handled on premises and others are offloaded to the cloud. For example, legacy systems might best be kept on premises because the time and the expense of restructuring them (and troubleshooting them) for use in the cloud may not be worth it. New applications, however, are likely candidates for cloud deployment.

Related Article: Tech Savvy: How to Talk Cloud at Cocktail Parties

That said, you may also want to consider whether it is worth keeping certain legacy applications at all. Patrick Gray points out in his article for TechRepublic that, “Cloud computing has completely revolutionized several sectors that were once dominated by large and expensive legacy applications.

The CRM (Customer Relationship Management) space is a major example, where companies can now provision an enterprise solution with a credit card. This takes a massive capital expense off the balance sheet... and alleviates the need for huge teams of consultants or specialized engineers report.”

Start Small, Then Take It One Step at a Time

It’s not an all or nothing proposition. A major advantage of using cloud services is you can deploy as little or as much as you need it, when you need it.

As Elizabeth Dunlea of Gartner notes, “The key is not to think about it as installing a set of technologies, but instead adopt a cloud service from an outcome perspective.

By tackling one service at a time, it’s easier to measure what worked and what didn’t. Did it reduce the cost? Does it perform to expectations? This is where best practices are drawn for future deployments.”

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