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Authored by Tim Rehac, EY Americas Cloud Insfrastructure & Strategy Leader
Local contacts: Imran Ullah, Partner & Cloud Strategy Lead, Consulting and Kamya Sanaei, EY Canada National Cloud Engineering Leader
Many companies are turning to a hybrid cloud model to maximize the benefits of their cloud strategy.
In brief
- Businesses are adapting to a new, consumer-centric marketplace in which customers expect their products and services to be delivered more conveniently and quickly than ever before.
- More and more organizations utilize the cloud to gain access to on-demand resources — servers, applications and networks.
- The right cloud strategy has the benefits of easy collaboration, improved efficiency, increased flexibility, reduced costs and the ability to scale.
The Canadian Chamber of Commerce is a prime example of how the cloud can help in real time with real challenges. At the beginning of the pandemic, many small businesses in Canada suffered. According to a 2021 EY case study in How information becomes vital for small business survival, of the 1.2 million businesses in the country, more than half experienced a significant revenue drop. Something had to be done — and quickly — to help keep these struggling businesses alive. The government rapidly rolled out support programs, inclusive of rent assistance, wage subsidies, special interest loans and the like. The problem, however, was that business owners had a hard time navigating the qualification criteria and new application process. To solve this problem, the government and the Canadian Chamber of Commerce engaged EY to lessen the information gap between federal and provincial support programs and small businesses by deploying cloud-based services.
EY immediately activated remote knowledge-sharing methods and tools and a network for industry professionals to meet virtually with frustrated business owners. Included in this new technology toolbox were call screenings and interactive voice response so that supervisors could help in real time and expedite calls. This created an operating model that was fast and efficient, while a private cloud-based solution kept sensitive information safe.
As more and more companies use the cloud to manage, store and deliver their data, additional thought must be put in to help ensure that the right setup is chosen. There must be a formalized strategy and plan in order to determine whether a public, private or hybrid model would work best.
The case of public cloud services
By definition, a public cloud is owned and operated by a third party, which is responsible for maintaining both the infrastructure and cloud services. It is the most common type of cloud computing and is especially popular among startups or emerging organizations that want to avoid the expenditure and time it takes to develop a private cloud system on their own. All hardware, software and other complementary infrastructure are the responsibility of the cloud provider.
The benefits vary, but typically, there is a lower cost associated with the public cloud; clients pay for only the service, not any software or hardware. Additionally, there are no maintenance headaches, and there is a higher reliability quotient since public cloud computing has a vast network of services, which helps to ensure against failure.
The drawbacks? It really depends on an organization’s structure. If a company has an existing complex network architecture or extensive application processes, a limited public cloud may not be a good fit due to a lack of the ability to customize. In addition, if an organization deals with confidential data, security and governmental regulations may pose a problem.
Keeping it in-house: private cloud services
A private cloud can be accessed by only one business and is physically located within the organization at a data center or hosted by an outside service provider. Unlike the public cloud, all services and infrastructure are on a private network, with hardware and software specifically tailored for that organization. Many governmental agencies, financial institutions and health care providers opt for a private cloud service due to regulations, compliance, and security/privacy concerns. The benefits include more control over data and information, since it is not shared with other server tenants, and it can also be customized to meet specific business needs.
The best of both worlds: a hybrid cloud
A hybrid cloud strategy is arguably the most popular one employed by businesses today as it allows data and applications to move between private and public environments. In fact, the number of organizations committed to, or interested in a hybrid cloud strategy has increased from 81% to 93% between 2017 and May of 2020, according to an Enterprise Strategy Group e-book published in 2020 on Hybrid Cloud Trends and Strategies. The reasons are many.
The number of organizations planning for a hybrid cloud strategy has increased from 81% to 93% since 2017.
Most large companies choose not to be invested solely in the public cloud due to the time and money they have already spent to develop their on-premise platform. Instead, they are looking to the hybrid cloud to give them the best of both worlds: the flexibility of the public cloud and the security of the private cloud.
Basically, it comes down to control: the ability to manage increased computing demands by seamlessly moving from on-premise systems to the public cloud to handle the overflow, without sharing the entirety of the data, the power to protect sensitive data and low-latency workloads by keeping it off the public cloud and within the organization’s infrastructure, the ability to keep costs in check by scaling to the public cloud only when needed. And the means to take advantage of the additional resources the public cloud offers when needed.
These benefits are clearly helping those businesses that have adopted this hybrid model. EY has found that enterprises that apply cloud and legacy modernization solutions typically see the following:
- 20% reduction in carbon footprint
- Up to 30% efficiency in business and technology processes
- 33% faster time-to-market with accelerated new program development
- 50%–75% increase in developer productivity using cloud, agile, DevSecOps and infrastructure as code
- Up to 80% of data center CapEx converted to OpEx
Maximizing cloud integration into your organization
Once a cloud model is decided upon, there are a few ways to help maximize cloud integration into an organization.
- First, it is important not to look at the integration as only an infrastructure play. It is designed to help foster faster development cycles, increase efficiency with deployment and improve customer experiences. Teams can increase overall productivity by automating — or eliminating — low-level activities that were once used to manage legacy environments.
- Second, remember that turning to the cloud may not be the best approach for all applications. Since the cloud is a pay-as-you-go service (when public), determine whether it is cost-beneficial to turn over everything to the cloud.
- Third, it is important to note that optimization doesn’t end with migration. Make sure to implement software asset and management tools to track spending and ramp consumption up or down as needed. Establish goals for cloud migration and align incentives and performance measures across departments — and hold leaders accountable.
Glossary: what is the difference between public versus private versus hybrid cloud models?
Summary
Turning to, and utilizing, appropriate cloud services to their full potential will help businesses not only make more strategic business decisions today, but also better predict and plan for the future. The cloud is the key to differentiating an organization’s business and driving market advantage; in short, it is making the most of technology in action.