How to decide whether to place IT in the cloud

Kevin Smith says that in-house systems can have a big influence

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Is the cloud always better, faster and cheaper for business IT? Not necessarily, according to Kevin Smith of service management company Frontrange.

Usually that would be an unusual position for the head of a cloud business unit to take, but like an increasing number of technology providers, the company sells both cloud and on-premise versions of its products. The simple checklist it uses to decide which to suggest to its customers could help any business work out when cloud is the right decision.

According to Smith it comes down to security, connectivity and complexity – and you might also have to think twice about whether cloud is always cheaper.

The appeal of the cloud is obvious. "It allows you to narrow the number of things you have to focus on," Smith points out. "You won't have to worry about the infrastructure, you don't have to worry about your data; what you can focus on is delivering services." But before you jump at that simplification, find out if cloud is a fit for you.

User location

The first question he asks is: "Where are your users located? Are they centralised in one location or distributed?" If you have a single office or all your users are in the same building, and you already have infrastructure there, the cloud won't provide as many advantages as if you have users in many locations.

"The more distributed your users are, the better a fit cloud can be for you."

But that also depends on the connectivity in all those locations. You'd think it would be obvious but he claims: "I'm amazed at how many companies don't do this right. Ask about the reliability of your bandwidth and your internet connectivity."

He also urges people to think about the network connectivity inside their business; whether it is unreliable or slow or frequently unavailable. If they can't get a reliable connection to a cloud service, they can't use it.

Other questions to consider relate to the needs and capabilities of a company.

"Are your requirements relatively standard? Do you follow standard IT practices, or are there unique things about your business that mean you have unique demands? The more unique they are, the more likely is a business to choose on-premise because they're not likely to fit with the cloud."

A handy shortcut is to think about how much customisation has been done to any business software; the more customisation, the less likely is a standardised cloud service is to fit the needs.

You also need to think about the way your business is growing and whether your systems are getting simpler or more complex. Are you making any acquisitions? Are you actively consolidating operations?

If you already have to deal with integrating with other systems, you have to consider how well they'll work with any cloud service. But if you're standardising and simplifying, you're already doing the work that makes cloud a good choice.

Finally, think about your IT skills and infrastructure.

"Would you describe your IT wherewithal as limited, average or advanced?" Smith asks. "If you have good IT skills and good infrastructure you are probably more capable of taking on-premise software. But if you have cut back, outsourced, divested of skills – if you have cut IT way down, you're a better fit for cloud."

There is also the fact that, for some businesses, high security requirements or the need to keep information in a particular location could rule out the cloud.

Switch back

As well as potential customers who are keen to switch to a cloud service, Smith is talking to companies that have already gone to the cloud and want to switch back to running things themselves. Usually that's because cloud has turned out to be more expensive than expected; and that's usually because of the complexity and sophistication of the in-house systems that connect to the cloud services.

"They underestimated how much it would cost to maintain the integration with their existing tools and they're having to go back," Smith says. "If they need to change something they can do it in a day, but they have to pay their cloud provider £15,000 to adjust the integration."

The way your budget is allocated can make a difference. Smaller companies can be more flexible, but if you have money in your budget that's allocated specifically for capital rather than operating expenditure, it's easier to use that for on-premise systems than for cloud.

  • Should you worry about security in the cloud? See here.

Sometimes the decision also comes down to personal opinions.

"US school districts run centralised IT for a large number of schools," Smith says. "I know someone who looks after the IT for 40 schools and she believes cloud is right for them. But the school district superintendent believes that cloud is too much when they already have the infrastructure.

"Everything else about cloud makes sense for them; they're highly distributed, they have basic and standard requirements, and for their management processes they just track helpdesk tickets. But they're just not ready to make the leap."

That's not being irrational. If your business leaders are not comfortable with the idea of cloud services, or it isn't a good cultural fit, you need to take that into account when you pick a solution.