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Moving to the private cloud - is it right for your company?


Many businesses are moving their technology to the cloud, in order to experience significant cost savings while maintaining the same, or often increased, levels of security and availability. As the ways that companies are utilizing the cloud evolve, the notion of a private cloud has come to the forefront. Private cloud options provide the benefits of data center hosting with those of an on-premise solution, allowing companies to realize the benefits of the cloud while segregating their data from the data of other organizations.

Migrating to the cloud
Companies are increasingly turning to the cloud as it allows them to decrease the costs and maintenance related to hardware, facilities, software licensing and upgrades. During the recession, companies were simply maintaining their infrastructure and systems instead of spending money on upgrades and replacements. However, that is now changing as the depreciation cycle for their equipment and software licensing is over, and many platforms are becoming obsolete. As companies are considering their next steps, the cloud has become a prime option.

A move to the cloud allows for software and functionality upgrades without the need for significant capital investments. There are numerous examples with companies that utilize traditional, on-premise financial accounting software. RSM has assisted a number of these companies in implementing Microsoft Dynamics® GP or other financial accounting software products in a private cloud environment that provides a higher level of capabilities at an equivalent or lesser cost. The private cloud option often reduces overall costs because the costs of facilities and equipment as well as the costs and difficulties associated with upgrades have been reduced or eliminated. When evaluating technology from a total cost of ownership perspective, migration to a third-party cloud provider that is capable of handling all of the managed services is typically an attractive option.

Private cloud vs. public cloud
The core difference between public and private cloud options is that in the public cloud your data is dispersed in the same environment with data from many other companies. The private cloud provides the option to set up an isolated and secure environment, either internally or externally, that removes multi-tenant implications while still offering the same level of dynamic resource availability.

However, the private cloud is not the optimal solution for everyone. Businesses must determine their needs and goals before deciding which option fits best—public cloud, private cloud or a mix of the two. The private cloud generally requires more capital expenditure than the public cloud, due to dedicated applications like Microsoft Dynamics or Exchange and the need for more committed, hands-on management beyond shared services and infrastructure such as backup, monitoring and firewalls. However, in the instances where a company requires its own customizations and integration or where there is the impact of heavy, industry regulation—the private cloud may be the only viable cloud option.

Choosing the right provider
As the popularity of cloud services has sharply risen, so have the number of providers, each displaying varying levels of security, experience and capabilities. The number of provider options has increased the complexity of the selection process, and it is critical to find the right partner for your needs. There are several factors to consider to ensure that your data is in the optimal place, including:

  • How well potential vendors will meet your needs for availability and responsiveness
  • The long-term viability of the vendor
  • The strength and security of the vendor’s technical environment
  • Whether the vendor provides sufficient redundancy and disaster recovery capabilities
  • The legal implications for each vendor related to data ownership and data transfer and destruction upon contract termination
  • The lock-in and contract time frames required by the vendor

Complex language and contractual considerations have become as important as the technical implications of selecting one vendor over another in the cloud.

Security concerns
The frequent argument against cloud solutions involves perceived security concerns in comparison with maintaining on-premise solutions. What is often missed in evaluation is that when you connect your systems to the Internet, there may be virtually no difference between them being down the hall or around the world. First class cloud providers can often provide a greater degree of security than on-premise scenarios in that they are able to utilize economies of scale to implement stronger, more costly security measures than individual companies can afford.

At a time when companies are switching their focus from cost containment to performance management, the cloud can allow companies to successfully accomplish both goals. Cloud solutions typically reduce total cost of ownership and provide opportunities to implement more effective systems at comparable costs—the difficulty often lies in choosing the right provider. A trusted advisor can assess your readiness and help develop a cloud strategy with your capabilities, business goals and budget in mind.

For more information, please contact Lee Voigt at 515.281.9206.