SMEs making leap to private Cloud

SMEs using private Cloud will grow as they try to streamline efficiencies

Small to medium enterprises (SMEs) are jumping on board private Cloud, according to Pieter DeGunst, director of ICT consultancy Tecala.

DeGunst says while some people are using the term “private Cloud” to describe an external environment hosted by a service provider that is not multi-tenanted, he defines private Clouds as being privately built and internally run.

“I’m talking about an environment that is owned and controlled by that entity, so they procure it or they lease it. It’s either on their premises or [in] their own data centre. It really is their dedicated environment – it’s not a service provider private Cloud,” DeGunst says.

It is this sector which is witnessing growth in the SME market, he says. This is being driven by several factors. Firstly, some companies are beginning to realise the cost benefits of developing their own private Cloud solution, he says.

“If they go through a proper requirements definition exercise and understand how the sizing looks, then it can be proven that building an internal private cloud can be more cost effective than going to a public Cloud solution for many organisations,” DeGunst says.

Secondly, he says some companies are concerned about potential issues surrounding public Clouds, such as security and the risk involved in outsourcing IT functions to a service provider.

“Often, when they’re looking at these workloads, they’re really putting all of their environment out into the Cloud, so they really have to have a high degree of trust that’s going to be appropriately managed and they can have appropriate SLAs [service level agreements] and up-time and these sorts of things,” DeGunst says.

“Everyone is placing their bets on what’s better for their business around who controls the environment, the security and the policies and procedures that are in place.”

DeGunst says the challenges of SMEs using private Cloud are typically the same as larger companies. For example, both types of organisations need to have the skills and resources to build, deploy and manage the cloud, or employ service providers to do it for them.

However, private Clouds have disadvantages: They are not as scalable and dynamic as public Clouds, according to DeGunst. But he says this is not always a problem for SMEs as mid-market companies do not have the dynamic requirements of larger corporations.

“They don’t necessarily need to provision a workload within a couple of minutes or instantaneously and they don’t need to have a workload that they can turn on and off hour-by-hour,” DeGunst says.

“So we’re seeing a lot of that in the SMEs, because really it’s three to four weeks to procure a server, procure some storage [and] do it that way versus some automated process whereby they can provision a workload quickly. In some cases they can do it in a matter of hours as well, which is more than enough for them to manage their environment.”

Ultimately, though, small and large corporations use private Clouds in the same way due to similar objectives – to make the most from their investment in technology and to use an agile environment which is cost effective and streamlines processes, according to DeGunst. However, what they consider as dynamic may differ, he says.

DeGunst predicts the number of SMEs using private Cloud will dramatically increase in the next two years — he says organisations currently undergoing upgrades will turn to private Cloud as a solution.

Hybrid environments will also become more common, he believes. For example, he says some companies are defining 30 workloads and planning for 25 to stay in-house. The other five, DeGunst says, may be optimal for public Clouds, which means they will work across both the public and private Cloud environment for greater efficiencies.

When it comes to cost, DeGunst says the cost of implementing public versus private Clouds for SMEs is not uniform – it depends on each organisation’s needs and requirements. Instead, what needs to happen is for companies to define their requirements, he said.

DeGunst says they need ask themselves what they want to achieve, how many hosts they require, their up-time requirement and to “look at all of those capabilities and then you can adequately cost both a private and a public cloud solution and you can make your decisions from there”.

Follow Stephanie McDonald on Twitter: @steph_idg

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