Steve's Blog

The Cloud Decision for the Midmarket

The benefits of cloud computing have been presented and discussed in every venue available to the IT and business communities.  Cost effectiveness, and greater IT (and therefore business) agility and flexibility are the high level advantages.  Everyone wants those benefits, of course, and many organizations have to some degree achieved them through some level and type of cloud implementation.  Others are still determining when and how to "go cloud", moving first to understand their "cloud readiness", and of course attempting to get a handle on future growth and IT's ability to support it.

To be sure, all organizations share common questions that must be answered before moving forward with any IT initiative. These questions, which relate to IT/business alignment, security and compliance issues, application performance, and control over assets, are particularly important for the cloud, since in many cases it involves relocating often highly strategic assets outside the confines of company walls.  Midmarket companies are no exception, but because of size, current IT footprints, staffs and budgets, and other considerations, the answers to the questions, and the resulting implementation paths, may look somewhat different from those chosen by their large enterprise counterparts.

The question then becomes:  How does a midmarket company determine its path to the cloud?  One size will not fit all, but there are some important commonalities that midmarket companies share.

Which Cloud is Right for You?

One of the high level cloud decisions that must be made deals with the architecture itself. Today, many large enterprises have moved forward with private clouds.   Simply put, a private cloud is one that is implemented internally, but utilizing the technologies and approaches (virtualization, provisioning, and others) from which cloud advantages derive.  For many enterprises, private clouds have been a good first step because they maintain internal control over assets, business processes, and security.  By definition, they reside within a single enterprise. For larger, geographically dispersed organizations with highly diverse IT assets, creating this internal cloud can be challenging, but many of them have already begun implementing virtualization across the enterprise and therefore are in many cases well on their way.

For midmarket companies, factors such as geographic spread and disparate technologies may not yet be of great importance.  In fact, from a ROI standpoint, many midmarket companies will find it more cost effective to choose a public cloud.  Midmarket organizations often have less stringent requirements for unique functionality, making it easier to leverage external cloud providers who offer many core functions to large segments of their clientele but can also host and integrate company- specific services.  The cost evaluation shifts from quantifying the advantages of virtualization, consolidation and automated provisioning on an internal infrastructure to the comparative costs on utilizing external cloud-based services on an on-demand basis.  Paying only for what you use when you use it via a public cloud can afford major cost benefits to midmarket firms.

For several reasons, a hybrid cloud could be a good choice for some midmarket firms.  First, some firms may rely on a number of home-grown, customized applications that are tailored to run on internal platforms – a situation that, perhaps in the short term, cannot be changed.  Second, midmarket companies in heavily regulated industries can be subject to stringent compliance requirements that they’d prefer to administer and manage in-house.

Finally – and perhaps most importantly – midmarket companies must examine carefully where they will house, manage, and utilize their mission-critical applications and data.  Information critical to a company’s success must be kept secure, making the choice of where that information resides and how it is used an important one.  Data security issues – whether real or perceived – may not justify a private cloud-only architecture for a midmarket company, but they could justify a hybrid cloud implementation.

Perception is Reality - Where Should Your Data Live?

Cloud providers have generally done a good job of providing security solutions to their clients. Secure login and data transfer capabilities, as well as durable firewalls, are generally part of cloud solutions today.  Still, some still believe that data may not be as secure as they would like.  Can data somehow find its way to other users of a cloud provider?  How easy is it for an employee of the hosting company to steal data? Are competitors using the same provider, and if so, can they hack your accounts?


These threats are real, if a bit exaggerated.  But they are as important as they are perceived to be, and despite the popularity of cloud solutions, there is still a great deal of uncharted territory. Sensitive data and information should be moved gradually and carefully; over time, proof of security will ease concerns.


Ironically, however, midmarket companies may be able to more easily justify having sensitive data reside with an external provider than large enterprises.  The reason lies in one of the biggest factors affecting midmarket companies when it comes to decisions about the cloud:  Internal IT resources and skills.

Reach Out for the Services You Need

The end result of doing the cloud well is a sophisticated automated, agile, and efficient infrastructure that supports key business needs.  But securing and managing it can be a complex task, involving non-traditional and often sophisticated skills. Large enterprises have large IT staffs, usually with a broader set of skills and the resources to procure resources and skills they lack.  Midmarket companies often do not, and for that reason might find it more cost effective to have an external cloud provider create a quality data security solution for them. 


In fact, it makes sense for many midmarket companies to look to VARs and/or outsourcers to help them assess their needs, design a cloud architecture, and host their solutions with either a public or hybrid cloud architecture.  It is important to keep in mind that the architectural and technology choices you make for your cloud implementation is intended to bring you the benefits of the cloud . . . and those benefits involve in part the flexibility to change over time.  So get the help and expertise to do it right.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.

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