Hybrid Cloud: The Best of Both Worlds – The Rationale for Hybrid

This blog post is authored by Joe Weinman, author of Cloudonomics: The Business Value of Cloud Computing, and the forthcoming book Digital Disciplines, which explores four business strategies to exploit emerging digital technologies such as cloud computing.

Today we continue our blog series “Hybrid Cloud: The Best of Both Worlds”. If you missed our first post in the series “Hybrid Cloud: An Introduction to the Benefits of Hybrid Cloud”, we invite you to read it here.  In today’s post, we will go into the rationale of Hybrid Cloud solutions.

Rationale for hybrids

The underlying reasons that hybrids are prevalent across domains include economics, option value, migration and switching costs, performance tuning, and human behavior.

Generally, in the presence of demand varying off of a baseline, hybrid resources represent an optimal mix of a lower cost for dedicated resources that run the portion of the demand that is relatively consistent as well as a lower cost for on-demand, pay-per-use resources for the portion of the demand that is relatively variable.  Having a car at home for the relatively consistent demand of driving to work every weekday makes sense, as does renting a car on a family vacation or taking a taxi on a business trip.  Should the relative costs shift, a hybrid provides the opportunity to shift an increasing portion of demand accordingly.

There is value (“option value”) in flexibility; being locked in can destroy value.  For example, being locked in to long-term leases and owned equipment can be economically unwise if public cloud providers drop prices, as has been the case for the last few years. On the other hand, being locked in to a public cloud provider could be an issue if that provider were cease operations or have degraded performance.

Moving applications from a private environment to the public cloud can incur “migration costs,” and even if the public cloud offers costs savings, the return on investment—i.e., the return in terms of cost savings or performance improvements based on the investment in application migration—will therefore vary.  Ideally, applications should be developed for an environment which is fully consistent across private and public clouds.

A subtle difference between private and public clouds that is often overlooked is the performance difference between the two.  While public clouds offer substantial options and numerous standard configurations, the ultimate control over physical architecture lies with owned resources that can be configured with infrastructure elements such as memory, cores, processor interconnect bandwidth and topology choices to exactly match the needs of the application.  An architecture with more expensive elements that are better tuned to application requirements can offer better overall price-performance, but with the potential loss of flexibility.  Such differences, if any, depend on the application.  Because application performance often impacts labor productivity and revenue, the complete benefits associated with performance must be considered.

In any event, the ability to monitor, manage and control both types of environments together is good IT practice and a basic need.

In our next post, we’ll talk about the different hybrid architectures and scenarios. Until then, for more details on the benefits of Hybrid Cloud, you can download the entire “Hybrid Cloud: The Best of Both Worlds” whitepaper.

Next post:  Hybrid Cloud: The Best of Both Worlds – Hybrids in Space and Time (Coming February 17)

For more thoughts and insights on hybrid cloud, we invite you to join us for the “Hybrid Cloud: The Best of Both Worlds” webinar hosted by Joe Weinman on 2/24. You can register for the webinar here.

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