30 Apr 2013

Dedicated Hardware or Cloud Computing?

There was a time when almost all companies owned their own hardware, but that’s becoming a thing of the past. But what’s right for your business? What should you own, what should you outsource? There are four main avenues you can pursue: – Having your own dedicated hardware – Using dedicated hardware that’s owned by a managed-services provider – Hosting your virtual servers with a partner in a cloud solution – A hybrid model.

The DIY route – your own dedicated hardware

Acquiring your own hardware and housing it in a partner’s data centre, or your own office, means significant capital. There are also additional costs that need to be considered such as data centre fees, environmental support, ongoing management, software licensing and personnel. However if you are concerned about having sole control of your environment, one of the great benefits of having your own dedicated hardware is that you can have complete control if your systems are managed internally.

Renting the gear – provider-owned dedicated hardware

Engaging a partner to provide dedicated hardware can significantly reduce your operating costs and overheads, since you do not have to shell out the capital investment needed to own the hardware itself. Your licensing costs may be lowered, licensing arrangements simplified, and licensing through a service provider allows for continuous upgrades on the software provided. However, there is limited scalability as provisioning time can take longer due to quoting and approval processes in comparison to a cloud based arrangement. It is also important to note that when equipment is not 100% utilised, it can lead to business inefficiencies as payments aren’t made on the basis of utilisation but on the equipment underpinning the environment.

Cloud Computing – rented space on your provider’s servers

A cloud computing arrangement eliminates inefficiencies, because you only pay for what you use. You can trial applications, update quickly and easily, and your Service Level Agreements (should) guarantee 99.9 per cent uptime. Your service provider’s licensing agreements give you access to constant upgrades. Disaster-recovery becomes faster, cheaper and less-likely to be invoked, and it’s also more financially transparent, since you can accurately calculate cost-per-use. Cloud computing can be the most cost-effective and flexible solution, but to successfully implement it and reap the benefits you must choose a reliable service provider carefully, as your relationship with them will be central to your business operations. Having access to the advice, support and strategic planning resources of a trusted advisor with a long history of providing cloud services is key to leveraging the power inherent in cloud computing.

The Hybrid model

What makes the hybrid approach attractive to many businesses is the fact that it allows you to leverage your own assets as well as assets from a cloud service provider to create a more cost-effective and flexible IT environment. It gives you a way to augment your existing facilities, either in terms of handing bursts of traffic or having specific workloads hosted.

Which one is for you?

The decision between a dedicated-hardware solution and a cloud based solution should be made by someone with a thorough knowledge of the business needs, strategic direction and technical requirements of your company. But there are some general principles. If you have significant IT expertise in-house, relatively static future needs in terms hardware and software upgrades, require a small suite of programs to operate and are prepared to make significant capital investment every three-to-five years, it’s still feasible to own your own hardware outright. Having dedicated hardware in a data centre can be effective for companies that are CAPEX intensive, have a very stable IT base with little change and are confident of using 100% of their infrastructure all of the time. But this isn’t the case for most companies. If you want to be more agile in terms of trialling and adopting new applications, have fluctuating IT needs, a desire for greater cost-savings, need financial transparency, or want to be able to scale easily with growth, in my opinion a cloud or a hybrid solution is a more suitable delivery model. Nicholas Hollings is Brennan IT’s Practice Manager – Cloud.
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