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Cloud vs. on-premises: Finding the right balance

Sandra Gittlen | May 2, 2017
The process of figuring out which apps work in the cloud vs. on-premises doesn't yield the same results for everyone.


Other reasons for saying no to the cloud

As much as Ross is a cloud promoter, he says he fully understands the 21% of respondents to Computerworld's Forecast survey who say they have no plans to move to the cloud. "I get worried when users simply want to spin up anything anywhere and are only concerned about functionality, not connectivity and security."

Ron Heinz, founder and managing director of venture capital firm Signal Peak Ventures, says there will always be a market for on-premises applications and infrastructure. For instance, one portfolio client that develops software for accountants found that 40% of its market don't want to move their workflow to the cloud.

Heinz attributes the hesitation to more mature accounting professionals and those with security concerns. "Everybody automatically assumes there is a huge migration to the cloud. But there will always be a segment that will never go the cloud as long as you have strong virtual private networks and strong remote access with encrypted channels," he says.

Greg Collins, founder and principal analyst at analyst firm Exact Ventures, has found clients usually stick with on-premises when they are still depreciating their servers and other gear. "They have the attitude 'if it ain't broke, don't fix it,'" he says.

Still, he also believes the cloud is still in the early days and will only grow as the installed base of on-premises equipment hits end of life.


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.


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