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Cloud engineering is the process through which computing services are delivered and utilized over the internet. This is done mainly in the realm of IT related services, where the resources are found within the internet, and a number of web based tools and applications are stored in the cloud.

Ever since the cloud began to cast its powerful presence in the world of business, everything began to change. Businesses began to recognize the importance of saving their data, files and applications in the cloud. Rather than keeping all those important files in external hard drives and disks, they began to save them in the “cloud”.

On-premises cloud infrastructure is a term that you normally use with cloud computing. But it does seem to be contradictory when you think about it. It simply means that the company’s hardware would be stored on-site at the client’s business location, quite unlike the cloud services where the vendor usually houses the hardware at their own data centers.

Accessing the file, data and applications in the on-premise solutions is what makes it different from the generic cloud solutions hosted by a third-party vendor. On-premises, means exactly that. The files are accessed from the user’s computers in their own premises. And you can set aside the traditional upfront capital expenditure while using this solution. When your files are in the cloud, you need an internet connection to access them. You can choose the pay as you go option, so you pay for only those services that you use.

It is true that you use shared infrastructure most of the time, but there are several vendors who can provide you with explicit and highly reliable services at all times. Some of them are Microsoft Azure, Google Cloud Platform and Amazon Web Services. These are third-party providers that help organizations focus on their core business offerings, rather than worrying about the time-consuming process of crunching data, maintaining it and the infrastructure connected to it.

The High Cost of Maintaining On-Premise Infrastructure

While maintaining an on-premise environment does have its own benefits to consider, there are still some factors that would inspire you to turn towards cloud computing. Have a look at those factors:

Electricity costs

Companies should consider the amount of electricity required to run a full-fledged on-premise environment. It is true that the servers are energy efficient when compared to those in the past, but they still need a lot of power to run seamlessly. The average cost of maintaining one in-house server could run up to thousands of dollars depending on the facilities you need with it. The power supply must be continuous, with sufficient provision for backup. You need to have proper ventilation and cooling system for the physical servers because the on-site servers are likely to get hot easily. This is just the case of having a single server, if you need more than one, the costs are even higher.

Large capital outlay of cash

With on-prem, you are expected to upgrade or purchase more hardware and software. This could place a huge strain on the company budget, and might even prevent you from taking mission-critical strategies. Your focus will be on maintaining the data and applications in the servers. With the cloud environment, you don’t have to purchase anything, other than the costs involved in upgrading your space in the server. This is considerably lower than what you would have to pay otherwise, and you can easily channel those cash reserves for critical investments and initiatives.

Upgrades can get nightmarish

Once you purchase the on-premise applications, install all the hardware and hire the staff to look after the infrastructure, you still have to keep funds aside for the regular upgrades. The money you have to invest in the upgrades could run into millions, and the process itself could take months to complete. With cloud technology, you don’t have to be worried about the upgrades or the money involved in it because the vendor does it all.

Disaster recovery

Cloud computing doesn’t guarantee that your critical business components will be disaster-free, but saving them in the cloud gives the vendor the chance to retrieve them in case of a crash. In case the physical infrastructure at your enterprise fails, you can always depend on the backup in the cloud.

Security

Storing corporate jewels in the cloud might be the right choice for some enterprises, but some may vehemently deny it. The fact is that there is no right answer for this. There have been instances where on-prem systems have been compromised, and instances where high profile cloud hacks have happened. The cloud vendor does have vested interests, he cannot afford to let his reputation and livelihood go to the docks because of security leaks. So he will do everything within his power to keep the data and applications safe.

Impact of Cloud Services on App Development Costs

One of the best features out of several is its cost-saving factor. Managing data can really exacerbate your app development costs as you have to manage the on-premise costs that include hardware, software, support, downtime, employees, design builds, system upgrades for both the software and the hardware and so on. These costs can really amount to monstrous amounts.

On the other hand, with cloud computing, you don’t have to worry about the:

Servers - As there are no on-premise servers, you don’t have to worry about the costs associated with it.

Employees/IT Staff - No need to hire extra staff because the vendor that provides cloud computing will manage it all.

Computers - The data is stored in the cloud, so you don’t have to get the infrastructure, you can pay for them as you go along.

Maintenance and Downtime - You can minimize the downtime because the cloud vendor will monitor, maintain and upgrade the programs. Less downtime leads to higher productivity, increased revenue and better cost-savings. Cloud computing also makes it easier to have simplified workflows, while you can focus on other aspects of your business, and maybe, introduce new businesses and services.

Here’s a more detailed look at some of the cost benefits associated with cloud engineering.

1. Companies can avoid or minimize up-front IT infrastructure costs

A major benefit with cloud computing is that companies can now convert their capital expenditure into operational expenditure and put a lid on those unending infrastructural costs that might added up, if not for the cloud based solution. All the data that keeps coming in, the files and documents can now find their way into the cloud, rather than on the servers in your company.

It doesn’t matter what the size or type of your business is, you can move to the cloud  and save substantial capital costs on equipment, software, additional processing power for million-dollar machines and infrastructure. You can choose to have the pay-as-you-go option or the subscription based cost structure, and it will be much lower than the on-premise models.

2. Developers can get their applications up and running faster

In an age when everything is calculated on the basis of time, cloud computing is king. Developers can pull their applications any time they need, work on them, make the fixes, remove the bugs, test and release them. Work gets done faster and in far lesser time. In this way, they can work on more number of projects, and not worry about a physical server having the capacity or space to accommodate their applications.

3. Improved manageability and less maintenance

Being in the cloud give you the advantage of adjusting the resources to meet seasonal spikes and fluctuating demands. The applications and the files need not have to be installed on the user devices because they can be pulled out of the cloud at any time.

4. IT team can rapidly adjust cloud resources to meet fluctuating demands

Agile businesses can easily scale their businesses up and down, as per demand. Business demands can be very unpredictable, and cloud computing is one sure way to meet them, all the while taking your business to the next level. The cloud vendor will have the provision to adjust the resources according to demand.

5. Multitenancy allows sharing of resources and costs across a large pool of users

Software multi-tenancy is a condition in which a software architecture runs on a single server, but serves multiple tenants. Tenants refer to users with specific privileges have access to a particular software instance. Right from the time of cloud inception, multi-tenancy has been its major feature.

Multitenancy permits the centralization of infrastructure in specific locations that have lower maintenance costs, and the peak-load capacity is increased and well-optimized. It also means better utilization and efficiency of a resources that may otherwise be poorly utilized.

6. Remarkable increase in work productivity

Increased staff collaboration is a major attraction of cloud collaboration. Business productivity reaches several notches higher because colleagues can work from anywhere and they don’t have to wait for each other to work so they can access their files. A number of people can work on a single file from multiple locations in real time. You can easily take your business to global levels because there is no break in collaboration, and work pressure becomes almost nil.

7. Reliability and security

Performance, reliability and security are the most serious factors to consider while choosing the cloud vendor. It is the duty of the vendor to perform the upgrades and protect the data of the customer, freeing up your employees and IT staff for other tasks. Cloud service providers normally suffer lesser security incidents than on-premise servers, but that doesn’t mean security and governance should be lacking. The vendor does the security updates with impeccable measures to ensure business continuity in case of disasters. When the cloud providers have the right disaster recovery methods in place, you will have less overhead in recovering your apps and data.

8. Most cloud providers offer a "pay-as-you-go" pricing model

PAYG or the pay-as-you-go pricing model entails that you pay only for those services that you need. If you need to scale your infrastructure, then the vendor can add more nodes to handle the quests, and then when the demands come down (when the traffic spike is over), you can scale down. This way, you can completely eliminate the surcharges and hidden costs, and channel those funds to running a better-than-before business.

Comparing On-Premise and Cloud - Use Case of Jet.com with Microsoft Azure

Jet.com is an American eCommerce company based at New Jersey. It is presently one of the most popular shopping platforms because of its innovative pricing models. The company, purchased by Walmart in August 2016, uses various money-saving techniques to attract people frequenting online shopping portals like Amazon and Best Buy.

The online marketplace, Jet.com’s creator is Marc Lore, who is also the creator of the popular eCommerce site Diapers.com. To ensure excellent, fast service, the entire platform was built using both .NET and open source technologies. They handle millions of customers daily, so required a platform built on a flexible pricing model. Their innovative pricing engine works to reduce costs, and sometimes eliminate them totally in the eCommerce value chain.

For this to work in a successful manner, the company cannot rely on just on-premise solutions. They needed to find multiple merchants, and then find feasible rates that are closest to the customers they serve. And the demands keep growing, so the company had to handle the scalability part, especially during peak times. Jet.com realized that scalability, while providing competitive pricing models, cannot be successful unless they move to the cloud.

This is where their decision to move to the cloud proved greatly successful. Microsoft Azure was chosen because the website was done in Visual F# and .NET. The online retailer was able to transform the way they were doing business on a day-to-day basis, by including Office 365 and Azure Active Directory. The company now claims to have not even a single on-site server. Their shift to the cloud was done in under 12 months. If they were continuing with the on-prem solution, they would have taken at least 2 years to build their own infrastructure, and pay CAPEX (Capital Expenditure) costs as well.

Situations Where We Should Use On-Premises Instead of Cloud

Your move to the cloud should be done after careful review of your workload, due diligence and caution, because there are situations where using in-premises would be a better option than the cloud.

One of the limiting factors in the cloud adoption is security. If most of your customers access their apps through mobile devices, you might need to communicate with third-party clients. In such a case, cloud might be a better option, but if your employees are accessing mission critical documents, then choosing the on-premises option would be a better option.

Certain industries do prefer to remain in the on-premises mode because of the supreme level of security features involved in it. One example would be cyber security. Companies working in the cyber security field will have large amounts of crucial data that they cannot afford to allocate to the cloud. The bandwidth consumed by them would be enormous, making on-premises solutions a cost effective solution. After all, after a period of time, the costs for on-premise and cloud would converge.

Design and engineering is also another field that prefers to remain away from the cloud. They require memory-intensive software and generate terabytes of new data every day. The intricate calculations on huge, complex data sets can become too slow and too expensive in the cloud. Installing physical servers with high performance communication infrastructure is perhaps the most feasible solution. Life sciences and ad-tech are other industries that prefer to use physical architecture for their data.

How to choose the right option for you?

We have been through the benefits of cloud computing, and situations where on-premise infrastructure would be a better option. Now comes the defining moment where you have the option of choosing either one for storing your applications and data. Go through the following conditions:

What’s the tolerance for downtime? If your tolerance for downtime is zero or very low, then you can choose on-prem or an on-prem cloud solution with fast failover.

Review the workloads. Are you dependent on low latency connections to equipment? Then on-premise mode might be your solution.

What’s the maintenance required? If using the cloud infrastructure reduces IT staff maintenance workload, then you can definitely go for it.

Conclusion

Cloud computing has already made a tremendous impact on several industries, saving time and money in the process. It is a solution to several problems that companies had had faced in the past, especially when they were managing with on-premise solutions. The solutions provided by the right vendor would definitely be an integral part of your backup, recovery and business continuity strategy.

Enterprises can enjoy great savings even during downtime, especially with PAYG (Pay As You Go) option. Migrating to the cloud will give you access to a huge pool of latest IT resources, without worrying about technical know-how, or making large up-front investment.

Your move to the cloud should have a well-planned strategy because of the business and technical constraints that have to be considered and removed. It doesn’t matter what the size of your business is, you can grow in ways that weren’t possible in the past. However, several companies have decided to choose the hybrid option where they keep some functions on-premises while moving several of the key infrastructure components to the cloud. If you are looking for advanced security features, then on premises would be the most feasible option.

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