Author: Martin Dvorak

Multi Cloud Benefits

There are similar advantages which apply to the multi cloud as seen in the hybrid cloud models. The main advantages are costs, flexibility, choice and performance. There are less investments required for hardware and servers, storage, development time and updating existing applications – these are now with the cloud service providers and the customer can buy those as a service.

The main advantage is perceived in the virtualization and scalability:

  • When the service is already in the cloud, remote and virtual work is easier.
  • Additional server capacity and performance is easy to obtain when you are already in the cloud. The system can be scaled up immediately.

On the performance side, the differences are not only in the versioning but also in the memory capabilities. SQL queries in the cloud can be broken down in a DWH from minutes to seconds.

Consider your existing IT skills when choosing your cloud vendor. If your staff is already familiar with Microsoft, the switch is easier when going for Azure, the technology and performance is already known from the on premises experience.

Other benefits consist of:

  • on and off dynamic switching of CPU’s for flexible power control
  • control of the complete infrastructure via browser tool
  • reduced downtime with the use of multi region deployments
  • detailed cost control via browser tool
  • the latest hardware technology is always available
  • latest software deployment via browser tool, there is need for a physical server to be in place
  • the complete software stack is available without the need to license anything extra (e.g. in memory, advanced compression to improve database performance and reduce storage costs, etc.)

For companies working in highly regulated industries such as financial services or pharmaceuticals, the multi cloud model is useful to avoid dependence on a single cloud service provider and engage a second cloud service provider just for disaster recovery purposes.

Global cloud services providers are also more and more working with local partners to act as contacts for the customers and provide the interface to the global vendor. Customers can benefit on one hand from the expertise and competence of the global vendor and on the other hand from the local service provided by the partner.

Conclusion

Multi cloud is a deliberate use of cloud services from multiple public cloud providers and can also be used for different purposes, such as AWS for their large selection of web services in different segments or Microsoft Office 365 for using Word documents and Excel spreadsheets across platforms and even with mobile devices.

If you pursue a multi cloud strategy, you have many vendors, multiple licensing models, network connectivity with multiple providers and an outsourcing of knowledge, which is a risk. You need to maintain continuity in development and understanding license models correctly. Not all clouds are the same. For example choosing the right license model can be something like “fixed price” vs. “pay as you go”.

If companies selected their multi cloud services unintentionally, they will need to regroup and reorganize their multi cloud strategy.

If companies selected their multi cloud services intentionally, they need to understand the consequences of increased costs, complexity, more skills and tools required to support their multi cloud environments.

The maintenance work with the cloud service provider must be properly synchronized, i.e. how many patches have not been applied? Hot fixes and security patches are automatically managed and installed by the cloud service provider which prevents unpleasant surprises. All necessary patches must always be applied. Sometimes, there is short-term maintenance work that cannot be prevented. Due to the rapid deployment of software releases, the multi cloud is susceptible to bugs.

Therefore, companies should examine their existing applications, the kind of data they have, performance, legal and regulatory rules before selecting a cloud service provider for their multi cloud environment.

Multi cloud should be step by step approach to gain experiences. Set a strategy for how to best migrate your selected applications and platforms. For example, if a company is using Exadata, which is a computing platform for running Oracle Databases either on premises or in the cloud, the company can learn what has changed i.e. from v12 to v19 before taking the next step. A migration could look like as followed:

Database Before Cloud 1st Migration Wave 2nd Migration Wave 3rd Migration Wave
PROD Exadata v12 Exadata v12 Exadata v12 Exadata Cloud v19
TEST Exadata v12 Exadata Cloud v19 Exadata Cloud v19 Exadata Cloud v19
DEV Exadata v12 Exadata v12 Exadata Cloud v19 Exadata Cloud v19

Amongst the main advantage of using simple control for performance when needed, the next cloud services focus to enable agile operations such as efficiency, better control, flexibility, performance, price and automatization in the area of self-management, self-securing and self-repairing.

Price models move towards performance price ratios. As there are no hardware components to calculate, the price is per use with calculated performance. This can be fixed or “pay as you go”, so you only pay what you consume. Performance of the applications though play a price factor if it comes to latency. Companies should calculate the best price patterns for better performance against the time spent for their “pay as you go” consumption.

The biggest cost surprises can still occur with computing nodes, storage and networking and with data withdrawal (as in opposite taking data to the cloud).

The key drivers to go for multi cloud may relate to the IT strategy, followed by a digitalization of the company as a whole and using new business models. Using the multi cloud can be seen as moving workloads to a more automated and efficient environment in order to leverage existing infrastructure, networks and applications. What is relevant in the sense of the IT strategy is related to what are cloud contents? It is about data protection, data storage, data security and compliance.

In future, the importance of artificial intelligence, additional patterns and machine learning functionalities will increase.

Like a knife that can be used for good or evil purposes, so it is with the cloud. Cloud technologies are ideal for total surveillance, the collection of data that ultimately leads to the restriction of people’s fundamental rights, as we experienced in 2020.

Multi Cloud Data Center, Performance, Location and Legal Risks

In a multi cloud environment, a company uses several cloud services from different cloud providers simultaneously by connecting the offerings of several providers and enabling different SaaS and PaaS applications to communicate with each other. For example, a company simultaneously uses public cloud services from Oracle, Microsoft Azure and AWS for the same purpose.

The multi cloud is actually an extension of the hybrid cloud, but offers far more possibilities than the hybrid form. Multi cloud is especially relevant for multinational and large companies with many different applications and expect the full cloud benefits such as flexibility and choice.

Whether the multi cloud environment became unintentionally as part of the historical cloud journey or whether this is a strategic decision such as fear of cloud vendor lock-in, it is always a unique decision of company to determine what to do first. For some areas a single product, i.e. CRM, drives which cloud platform to select, in another area a company sees the advantage to move their whole data warehouse into the cloud, in other cases a company sees an advantage to move their data center into a private or public cloud.

Data Center Risks

The change impact is bigger when you have your own data center. The switch to the cloud is more difficult when you have your own data center and infrastructure as it needs a rearrangement of the resources to a new service provider. However, if you already have outsourced your data center, it is easier for the IT resources to learn the new technologies.

Still, the costs of a data center depend on the size, location and what kind of workloads are processed. Before moving to the cloud the different applications and the variety of workloads need to be assessed for cloud readiness as well as the number of users using these applications.

For legacy and in house applications, there may be only a few people (left) who know how to run and change these applications which are essential for business. There is a small chance that the cloud service provider will have this know-how available. For example a host in a bank and because of the underlying program language, i.e. COBOL, it is probably too risky and not cost effective to move these host applications to the cloud.

Apart from the cloud application readiness, the cloud data center is different from a traditional data center as they focus on price / performance and scalability for their customers. They are also build to process different workloads than the traditional data centers. Computing costs are high and consists about half of the cost of a cloud data center. However, labor costs and facility costs such as power distribution, cooling and air conditioning costs are far less expensive.

Another aspect is to understand current and future data center capacity requirements as this could result in higher costs when more space is required.

In a traditional data center, you are able to manage failures using a centralized service management system. In the increasingly common case where you build systems that use cloud services from multiple cloud service providers, managing these multiple systems becomes a bigger challenge.

Once moved to the cloud, companies want to remain flexible and continue to use pay as you go services in their own data centers. Companies need to pay special attention to the same services run internally or externally as they may not be the same when moved externally. Especially public cloud service providers only offer a part of their services, hence the potential gap must be evaluated before moving workloads to the cloud.

The burden is on the customer to aggregate this information from multiple providers to determine the impact of failures on their business operations.

Data Protection and Security Risks

The topic of data protection and licensing models is a huge homework and must be clarified at the beginning of the multi cloud journey. If the company operates in high regulated industries such as finance and pharmaceuticals, compliance risks and therefore related cloud service costs are higher. Especially for private clouds, where customers keep their data sensitive data insider their firewall, the vendor’s and company’s staff need to work much more closely to ensure a frictionless operation.

The cloud service provider must proof that they have experience in those industries and provide evidence to the compliance requirements, data privacy, IT security and recovery standards in case of data damage.

Performance Risks

With a versatile and multi cloud environment, a reliable internet connection is required at all times. When it comes to high volume transactions (i.e. e-commerce, B2C) during peak times such as Christmas sales, the price / performance ratio becomes vital with the cloud service provider. Companies need to compare large data volume and processing time as it may cost more when the same data volume is processed on the cloud or from a different cloud service provider. The same applies to latency time when large data volumes are sent at once and not over a certain period.

As part of the cloud strategy which consists of an inventory of applications, you need to do some design and performance regulations before moving applications to the cloud. Instead of moving applications one by one to the multi cloud, consider which applications can be eliminated or grouped together before considering the migration. If a multinational company runs for example many different CRM applications around the world, a fix and shift approach makes more sense.

Data Storage and Data Management Risks

Companies often use different SaaS applications such as CRM and HR with different private cloud providers and they are integrated in their ERP’s backbone system, often integrated in the companies’ data centers. As these different applications need to be connected to ensure full business value, the secure integration and data flow between these systems is business critical. Other multi cloud options can be that vendors run their cloud in their own data centers or public clouds where customers can access their data. Location, internet access availability and stability of where the data is hosted is important when it comes to high performance requirements or legal reasons where the data must be stored.

Using the multi cloud has a higher data separation risk exposure. The different cloud service providers share resources such as space, servers, virtual containers and other parts of the vendor infrastructure. Shared technologies inside cloud environments are more vulnerable to outside attacks which makes another security risk for companies who are in a multi cloud business model.

Location and Legal Risks

Multi cloud should be about freedom of choice of what and where to run data in the cloud. US based cloud service offerings are more and more expanding their data centers across the world. They first focused in North America and Europe and are now expanding to the Middle East, Asia and Pacific.

For example in 2020, Oracle had 25 regional datacenters and 15 were planned:

Apple, for example, selected Vilborg in Denmark for his first European Data Center location after evaluating Germany and Ireland as alternative locations. The stable Danish electricity grid was one of the reasons for choosing Denmark as the location for its data center. Apple’s services include network support and data storage such as App Store, iMessage, Siri and music streaming in Europe.

Interxion, for example, offers a connection from European locations to the Alibaba Cloud to allow customers to access the Chinese market. Multiple endpoints are available in different regions of mainland China. Leased lines are supported in regions such as Hong Kong, Singapore, and those of the United States. Once connected to the Alibaba Cloud through an endpoint, an on premises data center can access VPC networks in all regions.

Another example is the Swiss software company Temenos, which offers its core banking system Transact as a service from Alibaba’s Chinese cloud. Since they are certified for the Alibaba Cloud, their cloud independent banking platform enables banks to pursue a multi cloud strategy, especially for those institutions which aim to accelerate their go to Asia Pacific market process.

Companies which operate in a specific location appreciate the value in hosting their IT and applications in a secure external site that operate on the highest international standards like those offered from Oracle, Apple, Microsoft, AWS, Google, Alibaba and other major cloud service providers.

The location risks come with legal and price aspects.

Companies need to evaluate in which location data should be exchanged as it impacts the price. Data transmission costs time even within the same location. And it gets more time consuming when data is sent between different locations and between different providers. Prices vary between providers, distance and the services used in those locations.

From a legal perspective, companies should ensure that their multi cloud providers run data centers where these companies operate because the law remains within the country the data center is located. The problem with the US cloud act is that service providers must disclose data stored on their servers outside of the United States if requested by US law enforcement. However, this conflicts with the European GDPR. European companies using US based cloud service providers face the risk that they are violating GDPR even though their data is GDPR compliant. A local cloud service provider could be an alternative especially for sensitive data.

Contracts with a multi cloud provider should comply with GDPR also as a part of the exit strategy when a company is changing the vendor.

Risks and Benefits of the Multi Cloud

In a multi cloud environment, a company uses several cloud services from different cloud providers simultaneously by connecting the offerings of several providers and enabling different SaaS and PaaS applications to communicate with each other. For example, a company simultaneously uses public cloud services from Oracle, Microsoft Azure and AWS for the same purpose.

The multi cloud is actually an extension of the hybrid cloud, but offers far more possibilities than the hybrid form. Multi cloud is especially relevant for multinational and large companies with many different applications and expect the full cloud benefits such as flexibility and choice.

Whether the multi cloud environment became unintentionally as part of the historical cloud journey or whether this is a strategic decision such as fear of cloud vendor lock-in, it is always a unique decision of company to determine what to do first. For some areas a single product, i.e. CRM, drives which cloud platform to select, in another area a company sees the advantage to move their whole data warehouse into the cloud, in other cases a company sees an advantage to move their data center into a private or public cloud.

Another question is the “make” or “buy” approach. Do we have enough in house skills to build a private cloud or do we need to hire externals or a consulting company to make it happened? Can we select a single public cloud service provider to support all workloads or only specific ones?

Most companies which run some of their workloads in the cloud are now facing the decisive phase of cloud use, which deeply affects the infrastructure and contains bigger risks if the wrong decisions are taken.

The questions multi cloud users need to address are:

  • How can we keep costs under control in those large digital transformation projects and at the same time ensuring the long term performance of our IT?
  • What are the key drivers for powerful data management when following a multi cloud approach?
  • How to address availability, performance and service level agreements in the cloud to be successful?

Today, companies following the multi cloud approach use half of their cloud services for Infrastructure (IaaS), followed by storage, Platforms (PaaS), basic applications (i.e. SharePoint and other collaboration applications), application development and core applications (i.e. cloud ERP).

There are many multi cloud possibilities especially in the Software (SaaS) area when the majority of companies using Infrastructure (IaaS) services.

Multi cloud example

For example, a company in the direct sales decides for the multi cloud first approach and takes cloud advantages by virtualizing and standardizing client relationships and mobile workplaces. A switch to VOIP provides more flexibility to the workforce and the call center.

Considering the “make” or “buy” approach, the IT Strategy can look as followed when using a Business and IT alignment project methodology:

  • Cloud First approach
  • Best of Breed approach at domain level
  • Mapping of the IT delivery teams to the domain
  • Use “make” approach for USP processes and “buy” approach for standard processes
  • Start with frontend systems such as POS, Call Center, new customer acquisition, B2B and B2C online business
  • Next level applications: CRM, Order Management, Logistics and ERP
  • Further moves: Data Warehouse (DWH), Reporting, ML, KI – cloud analytics

Regarding DWH, when using more than one cloud service provider, the data is scattered across multiple public clouds. Cloud service providers such as Google offer multi cloud analytics solutions such as Big Query Omni. This tool lets you access and analyze data across the Google Cloud, Amazon Web Services (AWS) and Azure. So the customer can keep their big query user interface or standard SQL queries and will be able to query the data from different clouds without managing the different and underlying infrastructures.

For each wave, the right master plans and processes must be aligned between IT and business. What are the new technologies to take advantage of? Explain to business what are the risks and benefits when moving to the cloud, address questions such as data security and data migration.

Multi Cloud Risks

Having made first positive experiences with moving workloads to the cloud, companies consider putting more workloads into the cloud and with different cloud service providers as it appeals to mitigate risks, reduce vendor lock-in risks and getting benefits from cloud provider’s expertise.

However, there are risks with the multi cloud models which need to be considered for

  • portability costs
  • licensing costs
  • price arbitrage
  • own data centers to move to the multi cloud
  • increased number of applications
  • data protection / compliance
  • performance
  • data storage
  • data management
  • location
  • risk mitigation because of diversification
  • degree of lock in
  • portability and value added services
  • automation capability
  • tools evaluation and selection
  • availability and lack of skills. In multi cloud, you need cross platform skills
  • redundant, combined or autonomous multi clouds

Companies need to manage potential conflict of interest with secondary cloud providers and evaluate alternatives such as single provider in a single region vs single provider in different regions.

In order to have a sustained multi cloud approach, companies need to check the cloud provider interoperability, enhanced inter cloud connectivity, API standardization and the maturity of the Kubernetes ecosystem.

Price, Costs and Licensing Risks

Multi cloud means using different service providers for the same activity, for example provisioning machines from different vendors. From a price, costs and licensing risks perspective, many companies chose unintentionally different vendors or different cloud environments, where business decision makers became front runners and overruled central IT strategies. As a consequence, costs and complexity are increased and it takes more skills and tools to support multi cloud environments. However, there are more companies operating in a multi cloud environment intentionally instead unintentionally, hence, the multi cloud decision is wanted.

Companies continue to shift costs from on premises to the cloud with the goal that benefits and costs will predominate the risks when using the cloud. Multi cloud is more cost effective when it comes to set up, running, maintenance and support of the services provided from the vendor. The initial thoughts regarding cloud billing is about billing per usage respectively pay per use subscription. So as a conclusion you can say it eliminates the costs of servers, network, maintenance, patching and upgrades since the services you subscribe are internet based. However, it really depends on services, capacity and space a company requires. The total cost of ownership may become higher if not considering the entire life cycle of the cloud services purchased compared to the lower upfront and migration costs.

A lift and shift approach for moving applications to the multi cloud is not recommended. Cost will occur when the application came from legacy systems or is running on premises. As a prerequisite, the application needs to be checked how well it fits into a distributed multi cloud environment and testing is required whether software code needs to be rewritten or configured in order to function properly in the cloud.

Prices for Central Processing Units (CPU’s), computing nodes, storage and networking can end up in nasty surprises if not studied carefully. Transferring data into the cloud is much less expensive than taking data out of the cloud. Companies should pay attention to any data withdrawal charges.

Since cloud service providers are building more and more data centers around the world to serve more local demands and to meet data security and legal requirements, companies should pay attention to geographical price differences because prices are not necessarily cut if a customer is not serving a specific region or does not need an offered location from the cloud service provider.

Another price estimate option is to calculate the damage costs when the application is not used at all. In that case and if the impact is low, there may be no value to move the application to the cloud.

The cost of the multi cloud should be transparent compared to traditional on premises servers and hardware, there is a monthly subscription fee with no extra cost for updates or customization. However, you still have the security, management, and integration overhead of running across multiple clouds.

Hybrid Cloud Benefits

The hybrid cloud allows companies to scale their computing resources when they need them and avoids unnecessary investments in hardware and own infrastructure to handle short term peaks of services demands so that business can release local resources for more sensitive applications and data.

The hybrid cloud form is popular when it comes to storing highly sensitive data in a private cloud, while less sensitive data can be outsourced.

The benefit is that companies will only pay for resources when they need them instead of invest and maintain additional resources and hardware that remain idle when not used. The advantage of having the flexibility of temporary processing capacity needs is that it allows companies to allocate resources at a lower cost than if they use their own data center and IT infrastructure.

Not every workload demands the highest standard of encryption and security. Using the best combination of public cloud, private cloud and on premises applications makes the hybrid cloud to take all advantages of flexibility, scalability and cost efficiencies while keeping a low risk of data exposure and threat.

Using the hybrid cloud, companies can use the advantages of on premises data centers, the public and private cloud. For example for dynamic workloads, it is more useful using a easily scalable public cloud while for less volatile or sensitive data, a private cloud or a on premises data center is more useful. The different infrastructure models allow segregation of critical and less sensitive data. This means that companies can choose which data is better to run in a highly scalable public cloud and which data should be run in private cloud to ensure data security and keep sensitive data behind the companies’ firewall.

Another benefit is to test which infrastructure serves better and then increase the volume. For example, companies can put some of their workloads on a public cloud or on a private cloud and learn what works better for them. Then, based on the lessons learnt, they can expand their public or private cloud model as needed. This also gives flexibility for future needs as they might change, especially in unpredictable times as we face today.

A hybrid cloud approach optimizes the companies’ actual data management and it is not only about public cloud, private cloud, or on premises resources that are able to handle them. It is also about taking services out the cloud and redeploy them back on premises. Depending on the cloud service provider, this can be a difficult undertaking. However, the flexibility of the hybrid cloud is a major advantage as long as companies can bring private, public and on premises applications together. In fact, one of the major benefits to use the hybrid cloud relates to flexibility.

Conclusion

Companies deal with technologies they own and operate in their own data centers. They cannot just switch off their existing technologies and migrate to the public cloud, the integration requirements need to be considered such as integration with legacy, on premises and non-cloud systems, as well as business and legal (regulatory, data residency) requirements. Instead, companies use a combination of private and public clouds which operate as separate entities but are integrated in the hybrid cloud environment.

Whereas the hybrid cloud started with using public and private cloud in combination, companies now expect improvements in managing and integrating their IT landscapes between cloud and non-cloud (on premises) environments. Applications need to run everywhere and communicate perfectly between private and public clouds and on premises applications by using unified cloud and common data services. It’s basically to evaluate and benefit from the best of the public and private cloud worlds.

Hybrid comes with many forms. It is not just private and public cloud with on premises applications. Companies invest actively in hybrid cloud environments and containers to support flexibility with multiple hosting options that align better with business needs. Focus on hyper converged infrastructure, edge computing, API’s and container technologies continue in parallel.

The role of IT is changing towards a two way approach regarding the hybrid cloud. From an IT strategy perspective, the advantages of the cloud are more generic such as elasticity (consume resources on demand, provision services quickly, increase server utilization rates), cost benefits and new functionality through new technology that can be obtained quickly and easily. Another argument is a faster deployment and time to market.

Companies will only use cloud services that they trust. Before making a decision to move to the cloud, applications need to be checked for

  • Which purpose?
  • Is the application suitable for the cloud approach?
  • Can we integrate different operating models?
  • Can the application be used in different environments without changing the code?
  • Can the application be integrated in heterogeneous technologies?
  • Can we integrate different cloud services in different locations without facing legal risks?
  • Can we avoid the cost trap by just replicating the application in the cloud?
  • Can we avoid another cost trap when we share ownership with the vendor of an integrated set of capabilities?
  • Does the application increase the complexity of the infrastructure?
  • Shall we move individual workloads instead the full application to the cloud?
  • What are the vendor lock-in and migration costs risks?

Therefore, the role of IT is not just about to keep systems running and updated but also to provide governance, an aligned sourcing strategy,  support business and ensure applications operate properly because it became more complex through the segregation of on premises, public and private cloud applications and services.

IT should provide guidance for data management and data access, not only from an operating perspective but also towards development, applications and services.

Avoiding the cloud cost trap means that if there is no benefit from better functionality, elasticity and new technology, the cloud operation costs can become higher since more and more functions are pushed into the cloud without calculating opportunity costs. This does not apply to legacy and highly customized and industry specific applications where a lift and shift approach to the cloud may improve non-functional properties such as readability, complexity, maintainability and extensibility. In this case, the use of micro services and API’s should be considered to add business value and not just moving legacy applications to the cloud.

To gain the full benefit of the hybrid cloud, companies must put down the silo-thinking and building a culture of mixed teams allowing more IT know how in business and more business know how in IT.