True Cloud is Not Hosting or Managed Services

Great article on the difference between manages services and cloud computing:

I have posted previously that there is a lot of confusion and debate about terminology and definitions of cloud. The problem of using such a broad term like “cloud computing” is that there are so many variations with the possible deployment models and when you say “cloud” it means different things to different people. Using the phrase “we are going to the cloud” can be as ambiguous as someone saying “we are using computers” and the response is: ok, but what exactly do you mean?

It appears that the confusion is having an impact in the market if a recent survey by ISACA is anything to go on.

In this survey 45% respondents said that the risks involved in cloud computing outshine any benefits. Whilst there may be an element of resistance to change or perhaps job protection mode, I can’t help but think that the main issue is that people fear what they don’t understand and whilst there is confusion on what cloud is, there will be fear and therefore a reluctance to embrace it.

I suspect that some of confusion in the market is being compounded by the providers of legacy hosting and managed services and outsource services who are trying to capitalize on the cloud hype.

From what I can see firms are being told that hosting and managed services are “cloud” delivered.

The reality is that the traditional hosting and managed services models are pretty much broken and as a result these are now typically more expensive than running in-house IT infrastructure.

When I first discussed cloud computing with my executive I was immediately reminded by them of all the horror stories experienced by the banks when they outsourced to hosting and managed service providers. I too had heard of the story of a bank being charged $500 by the vendor to replace a DVD drive in a PC.

But cloud is not hosting or managed services and here is why…

Hosting and managed services are broken models because they take what a business is doing already and do it for them. They don’t do it differently, other than claiming that they have better access to expertise and better buying power, but the underlying model is the same – one to one, without any scaling capability.

Let’s consider the analogy that a small business running their own IT infrastructure is logically equivalent to these businesses running their own generators to produce the electricity needed to support the business.

When one of these firms moves to a hosting and managed services provider the vendor will typically move all these power generators into a common location, the data center, where they have a collection of technician maintaining them individually.

No scalability, No economies of scale – subject to the Law of Diminishing Marginal Returns.

Facing these challenges hosting and managed services providers have no real advantage to offer many firms, large or small, and are as a result are typically more expensive that running these services in-house.

In a true cloud delivery model the paradigm changes. Systems are built and delivered on a “one to many” basis – hardware is virtuallized across the entire landscape, you don’t have hundreds of individual servers and applications (like hundreds of individual power generators) that need to be individually serviced, upgraded and maintained.

The Cloud Power Station shares the power across all users and applications are serviced, upgraded and maintained once for all users.

The more users on an application the greater the economies of scale without the degradation of speed because blade servers are added dynamically to increase the processing power. Suddenly it becomes much cheaper for firms, large or small, to run true cloud delivered models.

The challenge is that traditional hosting and managed services providers are jumping on the band wagon and the hype, labeling their own services as “cloud” without delivering the goods.

In your search for understanding the true cost savings and improved performance and interoperability that cloud promises to deliver first search for a vendor who could deliver a true cloud model.

Contact meshIP to learn about our cloud advisory services and true cloud computing offering.

Author
Recent Posts

Brian

Managing Partner at meshIP, LLC

Brian Byrne is the founder and Managing Partner of Dallas based meshIP, a technology services firm offering cloud computing strategies and services. He is an accomplished executive with senior management experience in all facets of the technology, telecom, cloud computing, and SaaS industries. He has proven success in developing, financing and executing strategic plans as well as launching new ventures. His background includes a record of significant achievement in international business development and his credentials include a MBA in Marketing and Management Strategy from the J.L. Kellogg Graduate School of Management at Northwestern University, a MS from the School of Computer Science at DePaul University, and a BBA in Finance from the University of Notre Dame.

He is also the inventor of the patented meshDETECT, Secure Prison Cell Phone Solutions.

LinkedIn Profile