Clearing the haze: Understanding your cloud options

05 December 2016

Sean Pascoe , Partner, Advisory |

Clouds seem to be everywhere these days - and not just the white fluffy kind floating above your head. Cloud computing has been one of the biggest technology buzzwords over the last few years, with research firms like Gartner consistently calling it out as a game-changing technology for enterprises.  

What is the cloud?

At a technical level, the term "cloud" is used to describe a configuration that utilises servers and processing power more efficiently in large, connected data centres. 

Enterprises may leverage their own clouds to store their data, host their applications and process information. Or, they may implement cloud-based services, such as programs they can access online rather than buying and installing software.

The potential benefits of cloud computing are many. To name a few:

  • Massive capacity that can handle big data operations
  • Fast, efficient processing
  • Rapidly scalable resources that fuel business agility
  • Affordable storage space
  • Greater enterprise mobility with widely accessible resources 

People have traditionally been hesitant to adopt the cloud out of security concerns. However, advancements in the technology have led to cloud services that are generally considered to be more secure than most enterprise environments, particularly as cloud providers can devote higher levels of expertise to protecting it.  

As secure as they are, you still need to be sure of what you are buying and the extent to which security is included. Your IT governance and business continuity risk appetite are critical here. For example, do you really want to explain to the Board that your only source of data has been compromised because your cloud provider had a cyber attack, went into receivership, became the target of a disgruntled IT administrator or was not available for the minimum period required by your business?

Organisations can, however, take a proactive approach to manage risks associated with cloud computing.

What are my cloud options?

Clouds come in three basic arrangement: public, private and hybrid. 

1. Public cloud 

With the public option, the cloud vendor hosts the infrastructure for cloud computing resources in its own data centres. Multiple organisations share computing space and power on the same equipment. 

Although there are security measures in place to ensure each company's data remains private, enterprises have no direct control or visibility over where their information is stored or how their resources are configured, secured or optimised for availability. 

Nonetheless, the solution is an attractive option because the economy of scale makes it very affordable. Pay-as-you-go arrangements and rapid scalability are convenient for businesses with evolving or inconsistent computing needs.

This option is popular for applications and information that don't require high levels of privacy or security.

2. Private cloud 

Private clouds have infrastructure that's devoted exclusively to a particular organisation. This offers a greater level of control, visibility and security compared to the public solution, but also makes it more expensive. 

This configuration can be hosted in two ways: On the company's own premises or in a vendor's data centre. The latter option is generally more affordable because the cloud provider builds and maintains the equipment, often on a large scale, even though particular resources are devoted entirely to individual organisations.

Organisations with large infrastructure needs that want enhanced security for their mission-critical applications and sensitive data may find the private cloud an appropriate solution.

3. Hybrid cloud 

As the name indicates, hybrid cloud is a mixture of public and private solutions. This means some of the servers an organisation uses will be shared with other enterprises - the public component. Others are designated solely for the individual company, serving as a private cloud.

Hybrid cloud configurations enable businesses to split their data and applications among public and private systems according to the degree of security they require. That way, they can maximise the affordability of their solution, benefit from greater flexibility and still have the level of privacy and control they require for critical data. 

This option is highly customisable, enabling companies to develop a strategy for utilising each type of cloud to support their unique requirements and operational activities.

Bottom line: Clouds are here to stay

Each organisation must assess the advantages and drawbacks of cloud computing options to decide if and when to transition to these technologies. 

However, it's a technology worth taking seriously: Enterprises are increasingly leveraging the option to boost their IT strategies. In fact, Frost and Sullivan has predicted that Australia's cloud services market will grow from $1.23 billion in 2013 to $4.55 billion in 2018.

Organisations are increasingly asking cloud providers for an independent report of the effectiveness of their IT control environment. This could possibly be an important action if, in the event of a disaster, the Board is asked, "What reasonable steps were taken to ensure that management had monitoring systems in place to manage risks to an acceptable level?" You can outsource the responsibility but you cannot outsource the accountability.

What about your own digital strategy? Is your organisation going to the cloud in a controlled way that could help it soar?