The choice of using private or public cloud solutions take into account many factors, and while price is an important one, it fights value, customer experience, and functionality for its place on the top three decision points to purchase.
When it comes to using cloud computing as part of your overall IT stack, the potential benefits are clear – scalability and responsiveness to ever-evolving business conditions are very attractive to those wishing to eliminate the capital expenditures and ongoing maintenance on-premises infrastructure require.
One of the common perceptions in cloud computing is a public cloud (from vendors such as Amazon, Microsoft, or Google) is much cheaper than spinning up private clouds. A new study from 451 Research finds that, as with many aspects of cloud computing, there is more than meets the eye. Beyond the inherent security issues with putting your sensitive information in public clouds, there are situations in which using private clouds are cheaper than public clouds.
When software-as-a-service rose in popularity, one of its major tenets was transparent, simple pricing. However, as the use cases for cloud computing grew in scope and complexity, so has pricing. The final bill for a cloud solution is quite complex, dependent on a number of factors such as deployment size, type, included workloads, labor costs, and utilization rates.
Private cloud solutions can be more cost-effective than public cloud solutions if you are certain of your utilization rates and labor efficiencies. The most important metric influencing this result isn’t necessarily volume, the number of virtual machines your company runs. Rather, it’s labor efficiency. Think about the number of engineers it would take to run virtual machines: 451 Research found when labor efficiency is beyond 400 virtual machines per engineer (400:1), all private cloud options become cheaper than public cloud.
Again, price is just one factor. It’s vital you continue to weigh security, privacy, and long-term strategy into any cloud computing purchasing decision. Generally, workloads attaining a high level of utilization, containing sensitive information, and easy to manage are best suited for private clouds. Variable workloads difficult to manage could be better for public clouds.
Ultimately, you may decide you need a mix of both to meet your specific business needs. The most important takeaway is you don’t have to throw security and privacy into the wind just to save money by using public clouds, because they may end up being more expensive in the long run.
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