Eventually you will run out of pencils and can’t give your users any more. Faber-Castell was one of the first to mass manufacture introduce this awesome productivity tool in the mid 1700’s. We have received more than 250 years use across the globe from this innovation. Today, most organizations have found even better ways for communication…. but some enterprises ….

My children have never known life without a computer, my grandchildren don’t comprehend a world without a smartphone and ubiquitous internet access. Knowledge is always accessible, human interaction with friends, family anywhere in the world is a click away for a face to face conversation yet in the business world, some IT organizations are still metaphorically handing out pencils to their users. I can tell you today that my grandchildren entering the workforce in the next 5 years or so, won’t take a job where you point them at the desk and say, “enjoy your 3270.. use the F keys to submit”. They expect mobile, tablets, intuitive interfaces, speed and parity with today’s omnipresent cloud tools and devices , or they won’t work for you and you will need them.

The cloud is no longer new. It is well established and quite frankly if you think you can do a better job of service, operations, admin, CapEx/OpEx cost control or security in your data center than the cloud today, you are simply wrong.

Security

When nefarious people hack an enterprise class cloud service, a dedicated team responds to address it and fixes the issue then inoculates and immunizes thousands of other customer’s systems as a preventive measure, many times without any requirement for them to even know. You don’t have that team, you don’t know about the dangers you have not experienced and you can’t be proactive to the same level. You’re not as good. Period. With Scale and dedicated responsiveness, the enterprise cloud is better. Need a case study, just think about the factors in the last US election for on-premise services.

Innovation Cycle

The second factor is the rate of innovation and improvement. If you took two organizations, one with on-premise software and the other with cloud that initially did the same functions at day zero of implementation what would happen?

On-premise software is known in the industry as a “packaged product”. This stems back from its days when software was purchased and then shipped out to the datacenter on tapes, CD’s, DVD’s or now electronic downloads. It has an update cycle generally measured in years. Release 1, Release 2 etc.

On the cloud, new capabilities are tested and released sometimes daily. Major enhancements every quarter and within a year (even if the products were identical day 0) the cloud version is likely a full year ahead of the on-premise solution. Application developers now build for the cloud first and then they retrofit those changes into an on-premise product lifecycle at defined intervals. 3 years out, an on-premise solution can easily be 2 full years behind in features and capabilities from the cloud version. You can create competitive business advantage by being on the cloud.

Cloud Ecosystem

The third factor is the cloud ecosystem. One of the biggest myths is that running a solution on-premise and in the cloud is identical because it’s just “where you run it”. No, it’s not. Perhaps more correctly, no it’s not if you are actually leveraging the cloud, not just running on it.

• Elasticity, the ability to perform better during peak usage periods like month-end, year-end, retail seasons etc.
• Business Intelligence, Analytical tools that can easily and securely leverage cloud data and generate insights and power better decisions.
• Eliminate help desk calls by leveraging self-serve capabilities inherent in the cloud.
• Be instantly mobile and secure on smartphones and tablets at a higher level of security than you could provide on-premise with more features, more integration and better user experiences.
• Empower your businesses to find what they need in the cloud marketplace and use it with full enterprise controls for security, audit and compliance.

Cost

The fourth factor is cost. I can speak with some authority on this topic as a decade ago, I led an initiative to build a 150 Megawatt Cloud DC. The key adjective in the description is megawatt. 150 MW is 150 million watts. Now think about your electricity bill. In Ontario Canada today the rates are $.09, $.13 and $.18 per Kilowatt hour for off-peak, mid and peak usage. Simple math, drop 3 zeros from 150MW. Is .150 million watts times (pick an average $.13) You have an electricity bill of $19,500 per hour, $468,000 per day, $171 Million per year. It is your biggest cost.

Because of the scale of the consumption, cloud providers lock in bulk power rates you can only dream of. Cloud providers do not order servers from Dell.com, they custom build ultra-energy-efficient servers and match the servers to the workload. Then the cloud provider, micro manages power consumption taking resources off-line when not in use and uses sophisticated load forecasting to spool up capacity. Cloud providers have a service fabric that allows for near-instant instantiation of capacity on demand. You don’t have equivalent economies of scale.

From a Cloud DC operations perspective, it’s all about scale. A very small operations staff is required for a massive datacenter and most things can be done “lights-out” without ever stepping foot in the actual DC. Cloud DC’s in most cases are connected with vendor-owned dark fibre with multi TB/second capacities and ultra-low data transmission costs that even the largest commercial enterprises could not fund for themselves. Once again, it’s about scale.

The bottom line is that you will never approach the cost-efficiency of a cloud mega-datacenter. Your competitors have or will go to the cloud and if you want to keep your CapEx/OpEx costs in line, you need to go also, because you will never achieve similar cost savings on-premise. Anyone who tells you differently is practicing “alternative facts”.

The cloud is no longer new. It has proven itself and IT organizations that are “too proud to do cloud” just need to keep sharpening those pencils a little longer.