Moving towards the cloud

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How can companies outsource IT resources?

Technology is changing, along with our concept of what technology is. In the past it primarily meant racks of hardware. Today it often means a service: Cloud computing is a term for the flexible provision of IT resources such as storage, computing power or user software as a service. That fact that such services can be accessed flexibly and billed according to use makes them attractive for companies. But how can companies with traditional enterprise IT develop towards cloud computing? And what are their options?

With traditional IT, the company manages everything, from applications to the data center. Outsourcing into the cloud can occur in three stages, which build on each other successively:

Infrastructure as a service 

With infrastructure as a service (IaaS) the company manages applications, security measures, data and operating systems itself. Visualization, servers, storage, networks and data centers are purchased as a service from a partner, which the company then has to rely on.

Taking the example of a pizza delivery service, that means: The company uses a kitchen, oven and gas from another provider, but makes the dough and toppings, and bakes the pizza, itself. In order to meet high demand, it has access to numerous additional ovens.

Platform as a service

In the case of platform as a service (PaaS), the company only manages the applications; it purchases all other IT resources as services. The major advantage is that the company no longer has to choose the right technical combinations – the operating system, database and security measures – itself. However, it is restricted to the technical scope of the chosen platform.

In the example of the pizza delivery service, the company only tops and bakes the pizza. Meanwhile the ingredients in the dough, the choice of oven and the baking trays are purchased as a service from an experienced Italian pizza chef.

Software as a service

If a company chooses software as a service (SaaS), then it relies on service providers for all its IT resources – along with the infrastructure and platform, it also purchases operable software as a service. An advantage of that approach is that software can be used immediately, which means the focus is on the introduction and migration of data, and costs can be determined in advance. The disadvantages include the fact that the company’s IT is dependent on the functional scope of the software and that the organization’s processes, authorizations and structure must fit or adapt to the software.

For our pizza delivery service, that means: The toppings and baking are also handled by partners.

Ownership of data or scalability?

Both the extent to the which companies use cloud services and the service delivery model affect control over data and scalability. Companies can choose one of three options:

  • Private: Cloud services can be accessed via the company’s private network and are either hosted externally or on its premises.

  • Public: Services are accessible via the internet and infrastructure resources are shared with other customers.

  • Hybrid: Private and public cloud services are used depending on the specific application. This model offers increased flexibility and control, but also involves greater complexity.

This initial overview of the forms of cloud use, from infrastructure as a service to platform as a service and software as a service, along with the service delivery models, show: it’s complicated.

So is it worth the effort? To answer that question, companies must evaluate the potential benefits of moving individual areas into the cloud. The advantage is usually the faster provision of functions to customers, resulting in additional revenue. Meanwhile, the cost of migration has to be estimated, and the existing investment and expected total future operating costs (total cost of ownership) must be compared. Overall, cloud computing reduces internal expenditure on the provision of new functions, along with the cost of maintenance and updates. It also increases software availability and reduces the impact of IT outages on revenue – taking into account the current high expectations of customers, those are good arguments for a move into the cloud.

The German version of this article was published on Der Weg in die Cloud.

Ulrich Bartholmös

About the Author

Ulrich Bartholmös

Ulrich Bartholmös is the CIO of UDG United Digital Group and is responsible for customer infrastructure and operational projects, as well as UDG’s corporate IT. He has more than 15 years’ experience advising and supporting companies in technology-driven, digital transformation processes.