Behind the scenes of a scaling business: Private vs public — which cloud is right for you?

Editor’s note: This commentary — the third in a four-part series — is sponsored and produced by LightEdge, a leading provider of enterprise-grade data center solutions — rooted in colocation and private cloud, and wrapped in security and compliance. The company delivers always-on internet with highly interconnected data centers, unmatched Compliance as a Service, and the balance of control and visibility to keep clients’ internal teams focused on strategic initiatives. The opinions expressed in this commentary are the author’s alone.

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Private clouds oftentimes are considered an enterprise-grade solution for mission-critical applications that come at a premium price. Total control, data protection, and performance are common arguments for selecting private cloud over public. However, more and more, private cloud is becoming the best option for organizations large and small (and their bottom lines). 

Measuring total cost ownership

Much of the decision making comes down to cost, but many companies aren’t measuring the right factors. They neglect to quantify the resources, assets, and utility charges it takes to manage and scale their cloud environment. It’s important to remember utilities, bandwidth, storage, human labor, redundancy, compliance, and even downtime. This will help accurately calculate the true total cost of ownership. 

Another critical area to factor in is your estimated versus actual cloud usage. Cloud waste could mean the difference between using one model over another. 

Financial breakdown

The term pay-per-use is often used to describe public cloud models, but that’s not necessarily accurate. You’re paying to reserve resources, rather than for actual consumption. Unused resources can be invested back into the company. 

A public cloud environment requires vigilance. Cloud users often forget to shut down virtual machines, but these VMs continue to accrue costs. You can use third-party tools to help control costs and cloud resource waste or create internal processes. Both require time and additional money.

When it comes to private cloud, there are several options available. You can pay a fixed monthly price for a dedicated private cloud only accessible by your company, or a pay-as-you-go virtual private cloud that offers you a logically isolated environment. In a managed environment, you can offload the burden of managing and optimizing your cloud environment and gain some value-added services.

Workloads make a difference

There are four basic types of workloads: linear, seasonal, stable, and unpredictable. More virtual machines running means more predictable workloads. The consensus among consumption studies concludes that stable, flat workloads are cheaper on a private cloud over a fixed term, while public or on-demand cloud reduces costs in variable workloads.

Other cloud drivers

Cost isn’t the only driver behind adopting one cloud model over another. For some, having dedicated infrastructure for a company is worth it. Industries subject to HIPAA (the Health Insurance Portability and Accountability Act) or PCI (Payment Card Industry) laws have to keep security and compliance as a top priority. Plus, the cost of non-compliance far exceeds the price of compliance, as the average consolidated cost of a data breach is now more than $4 million, according to a recent IBM Security Report.

There is a fine line between cloud models for many users: A 2017 research study conducted by VMware measured the exact point when organizations would switch from private to public based on price. The majority reported they would consider migrating approximately 25 percent of their workloads at a 10 percent price decrease.

What if you want both?
Some people might realize that one type of cloud or another will work best for their business. Others might not be able to go all in to just one solution given the nature of the information they are working with. There are multi-cloud options available where some information can be stored in privately owned environments and other information can be stored in a public cloud. 

These options are great because they offer flexibility for companies who have to meet specific compliance requirements and can give highly-regulated industries the options they need to protect their customers’ information while ensuring confidentiality, integrity, and availability.

There is no one-size-fits-all for cloud strategy, so your organization must develop its own to address your unique needs. While the initial costs of public cloud hosting may be lower, if you have regulatory or security concerns, private or multi-cloud hosting may be a better choice to remain cost-effective and compliant. There are also hidden costs to public cloud services that can make it cost-prohibitive in the long run. It’s important to really examine what you’re getting and how it aligns with your corporate objectives. 

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This commentary is sponsored and produced by LightEdge.

LightEdge not only offers private cloud options in its purpose-built, highly interconnected facilities, but also on-ramps to public clouds for the flexibility of customers’ business demands. Click here to learn more about LightEdge’s secure cloud and hosting services.