Cloud vs. on-premises: Finding the right balance

The process of figuring out which apps work in the cloud vs. on-premises doesn't yield the same results for everyone.

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Performance gains

"We have seen a significant shift in the last couple of years in the interest for public cloud," says Matthew L. Taylor, managing director of consulting firm Accenture Strategy. Accenture, a company of more than 394,000 employees, has most of its own applications hosted in the public cloud.

Many of his clients are not moving as fast. "I wouldn't say the majority of our clients' application loads are in the public cloud today; that's still the opportunity," he says.

Of the clients that have moved to the cloud, very few have gone back to on-premises. "If they did, it wasn't because the cloud-based capabilities were not ready; it was because the company wasn't ready and hadn't thought the migration, application or value case through," Taylor says, adding that others who floundered did so because they couldn't figure out how to wean off their legacy infrastructure and run it in tandem with the cloud.

Most of his clients have been surprised to find that lower service costs have not been the biggest benefit of the cloud. "In the end, savings don't come from technology tools, they come from operational shifts and performance gains," he says.

For instance, a bank in Australia that he wouldn't name moved a critical application to the cloud but had two other applications on-premises, causing performance problems. The performance problems arose because the cloud app relied heavily on the on-premises applications, so performance was slowed as they tried to communicate with one another. Once the bank moved all three applications to the cloud, it found the applications had never performed better, and downtime and maintenance improved.

Kas Naderi, senior vice president of Atlanticus Holdings Corp., a specialty finance company focused on underserved consumers in the U.S., U.K., Guam and Saipan, had a similar experience when the company "lifted and shifted" its entire application portfolio to the cloud. "Every one of our applications performed as good or better than in our data center, which had hardware that was ten years old," he says.

In 2014, the company took all existing applications and ran them "as is" in the cloud environment. Atlanticus relied on consulting firm DISYS to not only validate Atlanticus' migration approach, but also to help staff a 24-hour, "follow the sun" implementation. "They enabled us to accelerate our timeline," he says. In addition, DISYS, an Amazon Web Services partner, lent its expertise to explain what would and wouldn't work in Amazon's cloud.

Atlanticus deployed a federated cloud topology distributed among Amazon Web Services, Microsoft Azure, Zadara cloud storage, InContact Automatic Call Distribution, and Vonage phone system, with applications sitting where they operate best -- such as Microsoft Active Directory on Azure. The company front-ends Amazon Web Services with a private cloud that handles security tasks including intrusion detection/prevention and packet inspection. "There is an absolute need for private cloud services to encapsulate a level of security and control that might not be available in the public cloud," Naderi says.

In its next phase of cloud migration, Atlanticus will assess whether legacy applications have SaaS or other cloud-based alternatives that perform even better. In other words, the company took all its applications "as is," including legacy, and put them in the cloud. Now they are going to see if there are better alternatives to those legacy apps available to adopt.

Oshkosh ran a similar exercise and found that cloud-based SharePoint outperformed on-premises SharePoint and improved functionality. For instance, the company has been able to create a space where external suppliers can interact with internal employees, safely exchanging critical information. "That was challenging for on-premises," Downer says.

He adds: "We also are using various CRM cloud applications within some segments, and have started to meet niche business requirements on the shop floor with cloud solutions."

Copyright © 2017 IDG Communications, Inc.

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