Are You Getting the Most Out of Your Hybrid Cloud? Determine the Benefits of a Proper Hybrid Setup and Discover How to Get More and Spend Less
Hybrid cloud is typically a blend of on-premises applications and infrastructure mixed with one or more public cloud applications and infrastructures. For example, you could house Sage 100 and an integrated ERP reporting solution on premises in your office’s servers, while using cloud-based Microsoft Teams and HubSpot to communicate with clients and prospects.
Considering this example, you can see that it is a rare company that does not leverage a hybrid environment these days. This makes sense, considering the agility and security that cloud solutions can bring to users. Organizations can also realize impressive cost savings by combining cloud and on-premises solutions… if they have the right setup.
Without the right setup, companies risk spending more on a sprawl of costly cloud applications and services, which can also reduce their agility, limit productivity, and compromise cybersecurity. Find out if your organization is using your on-premises and cloud environment the right way.
How to Increase Agility by Combining the Cloud with On-Premises Solutions
One of the top reasons companies make the switch to cloud solutions is because they increase agility. Anytime / anywhere business operations are a given considering the past few years, but agility takes many forms.
By leveraging cloud infrastructure and applications for key processes, organizations can:
- Boost sales and operations by adding targeted cloud solutions as soon as they need to leverage emerging tech. Today’s cutting-edge tech includes AI, AR (augmented reality), eCommerce sales management, and even cloud-based inventory planning.
- Host their ERP in a virtual environment that scales up and down. This helps companies meet changing storage and IT capabilities needs without having to purchase and configure new hardware constantly (this is known as ERP cloud hosting).
- Increase collaboration between remote and in-office workers, using flexible, feature-heavy tools such as Microsoft 365 for Business.
Through these few examples, it is easy to see that agility increases your competitive edge in today’s business environment. The faster your business can adopt new technologies that boost production and sales, the faster you can boost revenues. The less time and money your company needs to spend on setting up new IT equipment and the less time it takes for staff to complete key tasks, the more availability your company will have for revenue-centric strategic planning.
It is difficult to make an argument that on-premises solutions increase agility in today’s world, but it is easy to understand why moving everything to the cloud, or moving the wrong things to the cloud can increase complexity and become a drag on limited resources for small- to midsized businesses (SMBs). Instead, a hybrid cloud setup is often the best choice. We will cover this more in our section on costs below.
How to Improve Security with a Blend of On-Premises and Cloud Solutions
These days, it is usually safer to store your data on the cloud than on premises. This is because maintaining cybersecurity for on-premises data takes a team of sophisticated and experienced cybersecurity experts managing and monitoring data around the clock – which is an impossible expense for most SMBs.
The right data, stored on the right clouds, can improve security with:
- Secure data centers that employ security teams for the physical building, along with masses of cybersecurity experts for the data
- The latest advances in cybersecurity technology, including AI-powered, proactive threat-hunting programs that can quickly identify risks, quarantine them, and escalate them to humans for in-depth risk assessment and appropriate response
- Continual software updates and patches that are developed as soon as new security threats are identified, and then implemented immediately without impacting operations. (On-premises security updates often take time because they require everyone to log out as the system goes dark during the updates.)
As we said earlier: it is nearly impossible for SMBs to afford and deploy this level of cybersecurity power in today’s world using a solely on-premises setup – yet small- and midsized businesses face the same threats that enterprises do. It is a common misconception that cybercriminals only target large companies with higher revenues, but nothing could be further from the truth.
The ugly fact is that most cybercriminals are lazy, small-time crooks looking to make a quick buck. They run automated software to uncover and exploit any IT security flaws they can, and they would rather steal $1,000 from an easy target than take the time to launch a big, complex attack that could net them 10x more. If your on-premises hardware has out-of-date firmware or software or open ports, or if it’s easier to phish your staff than a larger company’s… that means your company will be attacked more often.
Since cloud solutions often provide the same security to enterprises as they do to smaller companies, this evens the playing field… that is, as long as you know how to get access to the same tools that the enterprises use. If you don’t use the right cloud services or the right hybrid cloud blend, you can impair cybersecurity because that can increase your attack surface.
How to Enjoy Cost Savings Using Both Cloud and On-Premises Tools
Cost savings are one of the biggest selling points for cloud solutions but, as a savvy business leader, you already know that the biggest sell is always the trickiest. To ease your worries, you should know that it is true that cloud solutions have a lower upfront cost and often a lower total cost of ownership (TCO). These add up to huge cost savings over time.
Unfortunately, it is also true that the cloud’s subscription model can cost your company far more in the long run, if managed improperly. This is due to three factors: the invisibility of cloud resource costs, cloud sprawl, and the “latte factor” of cloud tools. These all become issues when you don’t have a strategic plan for your cloud solutions, and they can all be eliminated by leveraging the right hybrid cloud setup.
Here are some examples of how combining cloud and on-premises solutions can save money, versus relying solely on cloud computing:
- Save on cloud resource costs
Storing all business data on the cloud drives up cloud storage costs. Most cloud services come with a set amount of included storage (such as the 1 TB per user for Microsoft 365) but exceeding that data limit costs extra. Though cloud providers extol the virtues of storing all data on the cloud, most companies actually shouldn’t store all their data on the cloud because a lot of that data is archival.
It’s smarter (and more cost-effective) to store archival data on premises and allocate cloud storage toward data that team members need on a daily basis. (You can also save money by storing archival data on the cloud using “cold storage” options like Microsoft Azure Blob Storage, which costs less and still delivers cloud security benefits.)
- Save on cloud subscription costs
Another issue with cloud computing is the dreaded “cloud sprawl.” This occurs gradually over time as your organization adds one, and then another, and then another cloud solution to meet evolving needs. We mentioned the benefit earlier of being able to add targeted cloud solutions for emerging technologies like AI and AR – this is the dark side of that benefit.
As your company increasingly relies on a wide, sprawling range of cloud tools — say, Zoom, Box, Monday, Calendly, Basecamp, and Slack — you face two problems. One is the issue of siloed data. Since each app holds its own data, you never quite know where to find something when you are looking for it. This reduces productivity, which drives up costs. Another issue is that each of these items raises their price over time. While one app may have been priced at $69.99 a year previously, inflation, time, and M&A activity can easily drive that app’s annual price up to $169.99 within a few years. Since apps are charged on a subscription model, it can be hard to notice price changes unless you are really looking. In the meantime, another less expensive rival may have entered the scene, or another cloud service you use may have packaged many more capabilities into their app so you end up paying for duplicate services.
A hybrid cloud setup can reduce cloud sprawl because it keeps a lot of necessary functionality on-premises, potentially on perpetually licensed software that does not require a subscription. Of course, most software is transitioning to a subscription model these days, so you won’t be able to keep that perpetual license forever (nor would you want to), but it is always a good idea to control costs by reducing the number of services you pay for.
Another great way to accomplish this is to ask your Managed Services Provider to audit your current cloud tools and recommend cost-saving cuts or replacements that maintain the same functionality.
- Save on the “latte factor” costs
The “latte factor” is a term that was popularized in the personal finance world a few decades ago by investment advisor David Bach. It refers to the collective lifetime cost of making constant, tiny, mindless purchases (such as buying a daily $5 latte instead of brewing your own 25¢ coffee at home).
In the case of cloud services, those “affordable,” per-user monthly subscription costs create their own “latte factor.” A monthly charge of $10 per user is easy to justify paying for a while after an employee leaves — especially considering the time it takes to cancel the account and back up or transfer that user’s data — but over a year, that adds up to $120 your company is paying for a person who doesn’t even work for you. Ouch.
The cost-saving choice is to cancel the user account as quickly as you can (some services don’t allow you to remove users until the end of an annual contract, so this takes attention), and transfer their data immediately to archival storage on-premises or to their replacement. Don’t pay for employee licenses for employees you no longer have.
There is no need to sell you on the idea of cost savings. If there is anything we have learned from the unpredictability of the 2020s, it is that none of us can predict the future. As of this writing, core inflation is cooling as business travel prices skyrocket, and the increase of wholesale item pricing is slowing, yet the threat of a default looms while economists grimly warn of recession.
None of us know what will happen – but we all know one thing: it is a smart choice to slim down business expenses right now. A hybrid cloud setup, when planned properly, is a great way to cut costs without making sacrifices. This is because it empowers you to lower your IT equipment and management costs strategically, while increasing your scalability and flexibility. All of this helps you take advantage of growth opportunities instantly.
However, a badly planned cloud setup can end up costing more in the long run, which drains needed resources and slows agility – a very negative impact indeed.
Are You Using Your Hybrid Cloud to Its Fullest?
Most articles you read these days promote the idea of an “all-cloud” future, in which businesses are told to migrate every one of their applications and services directly to the cloud. Sorry to say it, but this is nonsense. Perhaps in the far-off future it will make sense to have all business data housed fully in the cloud, but realistic future planning solidly supports the hybrid model.
In fact, strong evidence supports this:
- A October 2021 survey by The Harris Poll found that 83% of companies that operate in both hybrid cloud and multicloud environments reported revenue growth over the previous 12 months, compared with just 58% of non-hybrid cloud and non-multicloud users.
- The same study also reported that 95% of surveyed companies stated that hybrid cloud or multicloud environments have been critical to their success since the pandemic.
It is clear that strategic combinations for cloud and on-premises applications and infrastructures will benefit small to midsized businesses and drive revenues. However, as we have seen, having the wrong hybrid setup can do more harm than good.
A smart idea is to work with an experienced guide, who can help you navigate and manage the confusing world of cloud and on-premises solutions.
The best idea is to work with an award-winning guide who understands the complexities of your business, including the interplay between your ERP and the cloud, and can advise you on which setups will be best for your unique needs. They will also be able to suggest innovative ideas to combine the cloud and on-premises tools, so you can get more out of each of them.
Get Fast Answers
Any time you have questions about your business technology options, all you have to do is reach out to our team of seasoned experts here at SWK Technologies.
Contact SWK today to get your questions answered or fill out the form below.