Do Large Businesses Need The Cloud?

For small and midsize businesses, the benefits of public cloud services are many. Larger enterprises, however, may see less of a payoff.

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For all the benefits that come with cloud computing, there are often just as many tradeoffs. Each organization must take a look at its current setup, along with future growth projections, to gauge whether public cloud services are right for them. Most small and midsized businesses can truly take advantage of most of the benefits provided by public IaaS cloud services such as AWS, Azure, and Google's Compute Engine.

However, large enterprises generally don't reap as many of the benefits inherent in a full production move into the public cloud. And it's precisely this reason that large organizations are beginning to reconsider. Let's look at some of the public cloud benefits that large businesses cannot capitalize on when compared to smaller organizations.

The No. 1 benefit I hear from SMB decision makers about the cloud is that it enables them to virtually eliminate capital expenditures. When small businesses are tight for cash, the cloud provides a huge advantage. It enables businesses with shoestring budgets to grow and expand with no upfront costs.

Additionally, if the need to contract arises, it's often as easy as a few clicks of a mouse. Most importantly, expensive server and other infrastructure doesn't sit unused in the data center collecting dust.

Large enterprises have far deeper pockets and can build their own data centers without concern for upfront costs. The performance advantages realized with an in-house data center are often more important than lowering capital expenditures. And if a large organization needs to contract, oftentimes it's to pivot to a new market as opposed to a literal contraction. So the repurposing of purchased hardware is far more likely in a large company.

Another factor that drives SMBs to the cloud is their inability to hire and keep well-trained IT staff. If these companies can hire a great infrastructure admin or two, they often leave for greener pastures at large organizations in hopes of better pay and more interesting projects. So, instead of constantly hunting for capable IT staff to manage technology in-house, SMBs often contract with cloud providers to manage either a portion or all of their infrastructure management needs.

But because large organizations often pay premium prices for top IT talent, they can consistently find and keep the best talent in their area. The thinking is that, if an outage occurs -- which will happen no matter if it's a private data center or the cloud -- it's better to have your own employees troubleshoot and fix the problem, because they live and breathe the infrastructure and understand it all the way from the application to the physical hardware and cabling.

That's certainly not the case when it comes to a cloud service provider. Your company's applications, data, and needs are not fully understood, and this can severely impact how outages are handled.

That's not to say there aren't public cloud computing benefits that cater directly to big business, however. For example, the ability to use the cloud as a development, stage, and test environment is hugely beneficial. Corporate infrastructure administrators no longer have to build or logically segment the production network from these test and lab environments.

Additionally, many global companies require a global, low-latency content distribution network (CDN) in order to perform optimally. Even the largest public and private companies struggle to do this on their own. That's when they look to the major cloud providers to accomplish this task for them.

Pros and cons of public cloud computing will differ depending on a multitude of variables for a particular organization. But when looking solely at business size, the cloud offers far fewer of the primary benefits that SMBs easily take advantage of. So unless they want to offload all their test and development work into the cloud or require a global CDN, big businesses may want to think twice, because the public cloud likely offers less than you think.

About the Author(s)

Andrew Froehlich, President, West Gate Networks

President, West Gate Networks

As a highly experienced network architect and trusted IT consultant with worldwide contacts, particularly in the United States and Southeast Asia, Andrew Froehlich has nearly two decades of experience and possesses multiple industry certifications in the field of enterprise networking. Froehlich has participated in the design and maintenance of networks for State Farm Insurance, United Airlines, Chicago-area schools and the University of Chicago Medical Center. He is the founder and president of Loveland, Colo.-based West Gate Networks, which specializes in enterprise network architectures and data center build outs. The author of two Cisco certification study guides published by Sybex, he is a regular contributor to multiple enterprise IT related websites and trade journals with insights into rapidly changing developments in the IT industry.

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