Cloud Might Not Be for Everyone, Here's Why and What to do Instead

[Kris Ahlstrom (kahlstrom)]

The cloud...beautiful, majestic…white.  It's a Rorschach test in the sky.  Let's apply the same thinking to the technology cloud.  What do you see? Do you see answers to all your budget problems?  Maybe you see answers to your maintenance window issues, scalability concerns or the answer to your expertise gap.  It sounds too good to be true doesn't it?  Maybe that's because it is!

Recently, I wrote about The Impact of Video Interoperability in The Cloud following recent announcements made jointly by Microsoft and Polycom about a cloud video interop service.  That article focused on the advantages of the cloud and how these advantages are quickly impacting the adoption of video conferencing in Organizations across the globe.  That article was well received, but feedback also made it clear that there are still many cloud detractors, many of whom feel that the push to the cloud is simply a push by tech companies to increase margin.

The reality is, there is no single solution that works universally for every organization.  Finding the right solution for your organization is about knowing what drives your organization.  It’s about knowing your use cases and understanding the problems which, once solved, will (ideally) help drive top-line growth or (minimally) conserve the bottom-line.  Some of the “low hanging fruit” on the tree of business problems, and specifically with regards to video and UC, are the avoidance of travel costs and making meetings more efficient, and there are proven ways that Polycom can help you achieve these goals through UC, but the real value of UC comes when it is used to address your organization’s unique issues.

Although there are good reasons why an organization would choose to deploy their technology in the cloud, Cloud delivered “aaS solutions” are not a universal fit.  While every organization should have its own reasons for adopting cloud services, some of the most common drivers to the cloud are increased agility, increased scalability, decreased costs, shifting expenses from capital to operational, enhanced collaboration, a green movement or even a philosophical decision to get out of the business of hosting and focus on the organization’s core competencies.  But there are also good reasons why a company might choose, instead, for an on-premises deployment.  Perhaps they are driven more by the cost than they are by the functionality.  Within the frustrated IT shops of many organizations are well-meaning individuals who believe they know what’s best for their employer…if they could only get the budget to fund these initiatives.  They might not be able to do what they want with technology to fuel business processes and enable Top Line Growth, but instead they are constrained by budget and forced to “least-best” solutions.  For some of those companies, on-premises solutions are still going to be the best fit.

A formative experience in my IT career came when I was the IT Director responsible for Directory and Messaging services for a Global500 enterprise.  At that time, the push to the cloud was beginning and there was an abundance of Internet technology companies who were quickly building cloud-based Email services…think Pollyhop from (spoiler alert) “House of Cards”.  While the promise of saving millions by moving our email infrastructure was hard to resist, we did our due diligence and you might be surprised by what we found.

My employer at the time was in a unique industry, one characterized by having very low net profit margins.  In fact, the net margins in this industry are still among the lowest for any viable business and commonly run in the range of 3-5%.  Margins this low drive some very particular behaviors, one of which is a strong ability to “sweat the asset”.  In this instance, sweating the asset meant running a 10-year-old email platform.  Although this may not be a best practice, it was a business decision and this platform supported the objectives of the organization.  It also skewed the financial models for any future investment firmly in favor of on-premises deployment.

One of the things attractive about the cloud is the promise of utility pricing, the concept that you pay only for what you use.  In a utility pricing model, aka consumption pricing, costs vary based on usage.  Commonly, this is tied to the number of users over a given timeframe.  Think of your electric bill, it’s usually within a known range but it’s always there.  This is a key point; with current cloud pricing models you continue to pay for these services every month/quarter/year forever.  You never own a cloud service, it’s never depreciated and this is where the model will fall apart for some organizations.  If you roll your own technology, and leverage that investment through time, at some point that asset will be fully depreciated and the costs will be essentially ZERO.  Is this the opposite of agile, yes, but that doesn’t mean it’s wrong for your organization!

Full disclosure, I believe there is probably a valid use case for every organization to move SOMETHING to the cloud.  It’s no accident that by some reports currently 95% of all organizations are leveraging the cloud.  I’d go so far as to say that the reasons to own your own on-premises technology are decreasing with time.  Yet there are a many other reasons why you might shy away from cloud delivered services today, the most common of which might be security.  Vendor lock-in and a desire to retain complete control over your data and capabilities are a couple more reasons why organizations might shy away from the cloud.  Again, it’s about knowing your specific business drivers and leveraging them to maximum advantage.  This is the same approach taken by successful technology companies and it comes down to listening to the customers.  Something amazing happens when we listen to the people that know their business, solutions are developed that actually solve business problems.  In the end, it’s going to be about who can provide their customer’s the solutions they need with the flexibility they require to support their business cases.

At Polycom, we have a history of listening to our customers and developing solutions to solve their business problems.  This history is evidenced by our Polycom RealConnect for Skype for Business and RealPresence Clariti products.  RealPresence Clariti is important in this context because it’s an on-premises solution that is also cloud-ready.  If on-premises solutions are your current best option, Clariti is your answer.  It will enable your seamless communications enabled business practices while building an on-ramp to full blown cloud services in the future.  Clariti can even enable you to leverage the scalability of cloud services while preserving the security of an on-premises deployment.

Figure 1 Mountain Scene. Personal photograph by Kris Ahlstrom. 2 April 2016

Figure 2 From http://www.rightscale.com/blog/cloud-industry-insights/cloud-computing-trends-2016-state-cloud-surve...