One consequence of the coronavirus is accelerated use of the cloud and higher costs, but there is a growing market for hybrid services – combining cloud and data centre storage
Anecdotal evidence that home working caused a spike in cloud usage during lockdown is now backed up by hard numbers.
In a survey by software asset management specialist Flexera, 57 per cent of companies said they expect higher than planned cloud usage in 2020 and a 47 per cent rise in cloud spend in 2021.
Gartner forecasts that public cloud spending will grow by 6.3 per cent in 2020 to $257.9 billion, up from $242.7 billion last year. Desktop-as-a-service offerings are the biggest beneficiary, with investment expected to increase by 95 per cent year-on-year to $1.2bn.
None of this will come as a great surprise to the many businesses that have been talking openly about how Covid-19 has accelerated digital strategies and cloud migration plans.
Another less discussed development, however, has been a focus on costs around Microsoft Azure, Amazon Web Services and Google Cloud consumption, and how hybrid IT strategies might alleviate cloud bills that have gone through the roof during the pandemic.
Increasing cloud consumption and costs
“We are absolutely seeing a spike in cloud-related projects and with that comes an increase in cloud consumption costs,” said Sandra Dunne, sales manager at Logicalis. “Every connection you have with your cloud provider, regardless of who it is, incurs a cost, whether you are putting data up there or taking it out.”
She pointed out that it's a very different model from traditional IT, where physical equipment sits in a data centre with no need for any additional investment until it's running at full capacity. “Organisations need to change mindsets, because every click costs you in the cloud,” she said.
Desktop-as-a-service and variations of VDI (virtual desktop infrastructure) have proved particularly expensive, according to Dunne, as companies scaled up a service designed for a few users to one adopted by an entire workforce.
“They have gone from maybe 30 people working at home some of the time to 300 doing it all of the time. The next phase is deciding if they want to commit to that cost long term or make a decision to put another process in place,” she said.
Future-proof your IT investments
Logicalis is coming across a lot of businesses that have arrived at the point where they have to turn stop-gap investments into something strategic. More robust security policies may need to be put in place and additional data protection to support remote working that looks like being a permanent fixture for the near future at least.
Dunne argued that firms need to be similarly strategic in the way they move their data around. They need to explore the opportunities around multicloud and hybrid environments for cost as well as compliance efficiencies.
Different ways of consuming IT
“While some clients have made the decision to be cloud only, most others have a hybrid combination of cloud and their own data centres, and I believe that's the way it will be for most organisations for a very long time to come,” she said.
Data that sits in the cloud is often the source of excessive consumption costs, particularly if there is a significant volume that needs to be shared and accessed over a long period of time. This is where a hybrid approach can help.
“To keep costs down, you should store the data in a data centre and do the processing in the cloud. That lets you manage the costs much more efficiently,” Dunne said.
Logicalis customers have cut consumption costs in half by adopting a more flexible hybrid approach, according to Dunne, and learnt that it pays to keep some assets on premise or in a data centre.
“Previously, executives thought moving data to the cloud was a much cheaper way of accessing services. It's not. You choose the cloud because of its agility, not costs,” she said
“And it’s important to remember that all of the organisation's responsibility around data remains the same, even if it's in the cloud. People have to be very cognisant that they are still managing an environment they own.”
None of this is intended to put organisations off the cloud and she recommends a cloud-first approach for many workloads. “There are projects that never need to go into your data centres, that should be provisioned in the cloud and remain in the cloud,” she said.
More cost-effective clouds
Logicalis is an Irish partner of NetApp, which enables businesses to connect and streamline data management and storage resources, often by leveraging hybrid environments to deliver value and flexibility.
In June NetApp acquired Spot, a leader in compute management and cost optimisation on public clouds, to address the challenge of achieving the best possible level of performance and cost for storage and compute while maintaining contracted service-level agreements (SLAs).
“We are trying to make it as attractive and cost efficient as possible with application driven infrastructure that has the same SLAs in any cloud,” said Andreas Limpak, director of solutions engineering.
“When organisations go to the cloud, it's mostly about agility and being able to react to changing circumstances. After that there is often an element of price shock. We want to help the customer bring applications to the cloud and make it as efficient as possible by keeping the same ‘legacy’ SLAs.”
Data classification in an application driven infrastructure
NetApp develops application driven infrastructure that makes it easier to move more applications to the cloud more quickly. Part of the process is data classification, working out which workloads can move, and where they should move to.
“If you want to move data around to optimise cost points, you first need to know where your data is, what’s the SLA, and which data to bring to which cloud,” he said.
Two years ago, there would have been widespread immaturity around the topic, but Covid-19 has shaken things up, according to Limpak, and organisations are turning over every stone to squeeze more value out of cloud environments.
“Right now, they are questioning everything they do. They need to look at their application landscape before they move to the cloud, including legacy, and do some work before they ‘lift and shift’,” he said. “There is a big difference between monolithic legacy applications and micro services. Lift and shift won’t work for a lot of legacy.”
Driving digital transformation
The pandemic has become an unwanted ally in pushing more businesses towards hybrid environments than span everything from hyperscale public clouds to on-premise data centres.
“The first couple of months was tactical, about enabling emergency continuity plans for lockdown, making the business 'Covid secure', ramping up virtual desktops and enabling everyone to work from home,” said Limpak. “After that, it’s been about driving digital transformation.”
The first steps in this new phase have seen the implementation of simple micro services, like providing electronic processes to employees who can’t get into the office.
“I call them satellites in the cloud,” said Limpak. “After they’ve used them to stabilise the business, customers start to move data-rich enterprise applications to the cloud as well.”
Organisations either re-engineer mission critical databases and legacy applications or make them moveable by putting them in containers, explained Limpak. What they have to avoid is a cloud strategy that changes the cost model but ends up with the same bottlenecks.
“The last thing customers need is to turn a ‘capex’ data centre problem into a cloud ‘opex’ problem. And they need to avoid hyperscale ‘lock-in’,” he said, adding that choosing the right hyperscale cloud platform is tricky because Amazon, Azure and Google all have different strengths.
“My personal opinion is that Amazon will have a problem keeping customers on their platform. They have a lot of application development tools, but from a production point of view, customers will probably see more advantages in going with Azure and its Microsoft connections,” he said. “Google is probably better for AI and machine learning.”
To find out how Logicalis Ireland can help your organisation to help you identify the right cloud approach for your organisation, please contact the team today.