The growing maturity of enterprise cloud offerings is giving businesses unprecedented choice in how they build the technology infrastructure that will power their core processes and enable their digital transformation. And while there are multiple paths to take, all roads lead to the cloud.
The main question companies face today regarding cloud is a choice between public and private cloud adoption. The need to drive digital transformation and re-imagine core business processes to meet the demands of the modern business environment has made cloud offerings attractive to companies that wish to remain agile despite growing complexity.
Public cloud: the best of all worlds?
Public cloud vendors are responsible for the full functional management and technical release of functional elements and take much of the responsibility and workload regarding release management, governance and accountability away from organisations. Subscribers are still responsible for the functional support of the cloud application, as well as any functional configuration – such as setting up certain workflows, managing data take-on from master data and historic data – required to make the cloud solution purpose-fit.
The latest public cloud platforms, such as SAP Cloud Platform, are also purpose-built for innovation, providing agile development capabilities and integration with the latest exponential technologies: machine learning, AI, blockchain, predictive analytics, and more. And with a lower total cost of ownership and quicker time-to-value, public cloud offers improved ROI in the short term and enables greater scope for innovation at lower cost.
But it’s not always the best solution for every business: regulation can, for example, limit where certain types of organisations (especially in the public sector) store their information, meaning many of the cloud solutions hosted outside our borders are off-limits. There is also the question of whether a business can change its core processes and adopt the out-the-box functionality of public cloud offerings.
For those that can’t, the private cloud has become an increasingly attractive proposition.
Private cloud: a matter of control
Private cloud is fundamentally different to public cloud offerings. Public cloud is a push – subscribers are beholden to the vendor’s release schedule and have limited capacity to adapt the cloud offering to suit specific needs. In contrast, private cloud is a pull from the customer, who dictates and defines the cloud strategy in collaboration with the vendor.
There’s also an emotional element to how data is stored in the cloud: many organisations are still reluctant to host sensitive company information in a public cloud environment, opting instead for on-premise or private cloud solutions. However, this is often a flawed argument. Cloud vendors have no access to company information or the way it is stored, and their reputations are built on exceptional levels of security, meaning that in most cases data stored there is more secure than nearly any other enterprise environment.
At a governance level, certain regulations may limit the types of information stored in a public cloud environment, especially if the vendor’s data centres are located outside of the country’s borders. Newly-introduced regulations such as GDPR and South Africa’s POPI Act have direct bearing on how customer data is stored and managed. Here, the private cloud has clear advantages, as it allows companies to more easily manage a broad set of data governance principles and maintain greater control over data storage and management aspects.
Internal KPIs for public vs private cloud
With so much choice and so many benefits to both public and private cloud models, choosing which type of cloud offering is best can become an almost paralysing exercise. As a solution, companies need to create a dynamic set of KPIs to determine which model will best serve their immediate and longer-term business needs. Some of the aspects that need to be considered include:
Know your industry – firstly, understand your unique business conditions and the larger factors that are influencing those conditions. Any choice between either public or private cloud should enable the organisation to meet its immediate challenges but also build capacity in the longer term.
Legislative aspects – some regulations, especially around the storage and management of data, can play a determining role in what type of cloud offering you seek out. In the financial services industry, for example, customer data cannot be stored outside of the country’s borders, meaning any public cloud platform that is hosted outside SA is automatically out of contention.
Business agility – can you change your business to adopt the functional aspects of what the public cloud offers? If yes, continue down the path to public cloud. If no, it’s probably better to pursue a private cloud model.
Know yourself – it’s critical to understand how big or complex the business environment is. Not everything is simpler in the public cloud: system architecture, legacy systems, internal siloes – these all play a role in the eventual success of public or private cloud adoption.
Cost – once organisations have determined the viability of their cloud delivery model, the cost of implementing it and changing the business landscape will be the deciding factor.
Public and private cloud both offer enterprises clear advantages. However, neither is a silver bullet for challenges around IT infrastructure and digital transformation. Every business needs to be clear about its ultimate business strategy, and to make sure the cloud model they choose can enable their ambitions.
Many organisations may opt to go with a hybrid cloud model to minimise risk in the short term. Choosing a vendor that is clear about where it can provide the most value, and that can be interoperable with other solutions, may prove to be the most practical and effective approach to cloud adoption, whether it be on a public or private model.
By Revel dos Santos, Africa Head: HANA Enterprise Cloud at SAP Africa