3 Key Cost Benefits of Deploying a Hybrid Cloud

While the benefits of an easy-to-deploy public cloud or a workload-appropriate private cloud are obvious, enterprises and even SMBs are increasingly turning towards a unified hybrid multicloud environment. In fact, nearly 94% of businesses surveyed in NTT’s 2021 Hybrid Cloud Report said that hybrid cloud deployments were core enablers for their business strategy and critical to meeting their immediate business needs.

One of the key findings of the NTT report was that while business continuity, resilience, and agility were the top objectives for hybrid cloud adoption, the biggest driver was cost efficiency. Today’s distributed and remote workforce uses data and applications in new and complex ways, and organizations need to find cost-efficient ways to enable this via the cloud.

Source: NTT

There are three key takeaways from this article:

• Deploying a hybrid cloud architecture entails up-front capital expenditure savings on fixed on-premises hardware assets by running certain workloads in a third-party cloud as part of a pay-as-you-go service.
• Maintaining a sufficient private cloud environment during hybrid cloud deployment can lessen ongoing operating expenses by mitigating the risk of oversubscribing to cloud services for processes that are more suitable to take place in on-premises data centers.
• Data and storage management is simple and adaptable in a hybrid environment, enabling users to make cost-effective decisions when it comes to choosing whether to store data in a secure private cloud or a more affordable public cloud server.

“One of the attractions of cloud computing is that it’s quick and easy to spin up additional resources if demand spikes or you need temporary capacity for some experiment,” states Gordon Haff, technology evangelist and advocate with Red Hat. 

“However, it’s also easy for costs to spin out of control. And this is doubly true in the case of complex multicloud or hybrid cloud environments.”

With that in mind, here are the different elements of hybrid cloud deployments that are central to cost optimization.

CAPEX Savings on Hybrid Cloud Deployment Over a Private Cloud or Data Center

Constantly evolving business functions and advancements in technology mean that enterprises need to find a balance between third-party public or private cloud models and on-premises data center deployments. It also helps to be able to switch quickly between these options according to changing workload needs or emerging opportunities for capital expense savings.

Mobility between cloud models is as much a boon to data security as it is to CAPEX savings. While it is often prudent to move a non-critical process into the public cloud to capitalize on more affordable computing resources, a potential breach in that cloud’s security will necessitate rapid migration of workloads from the compromised environment into a private ecosystem or a more secure public cloud provided by a non-compromised vendor.

The private cloud is made up of roughly the same server, storage, and network architecture as an enterprise data center but offers tremendous improvements in efficiency and agility, with improved allocation of resources to applications. However, the CAPEX of hardware still depends on the organization’s peak usage patterns.

The hybrid cloud does away with over-provisioning while still keeping the bulk of the workload on-premise. Orchestration tools facilitate the on-demand and transparent movement or “bursting” of additional application loads to the public cloud during peak usage times.

As part of a computing environment that mixes on-premises data center solutions with third-party platform services, the hybrid cloud deployment also entails benefits such as flexibility and scalability in growth, further offsetting the potential CAPEX risk of investing in insufficient on-premises hardware.

“Continually re-evaluate your use of the cloud to see if there are new cloud services or features that you should leverage. These optimizations can result in significant improvements in performance or reductions in costs that are easy to miss,” said Gokul Rajagopalan, Director of Products at Vectra AI.

OPEX Savings on Hybrid Cloud Deployment Over a Public Cloud

Pay-as-you-go often gives a false sense of “all is well” to cloud managers and architects, drawing them into OPEX worship. A classic example is that of developers spinning up a few VMs on a testing environment and forgetting to delete them after the objective has been achieved. Add to that the fact that public cloud resources come in T-shirt-like packages (small, medium, large), and it is all too easy for customers without a hybrid cloud deployment to oversubscribe.

Picture a few months of such oversights and before long, the TCO could end up exceeding the cost of an owned data center.

“In recent years, there’s been a mad dash to the cloud. But many faced a rude awakening when they saw public cloud costs skyrocket out of control. It gave us all more reasons to find a better way with the right mix of owned and rented IT infrastructure and services,” said Steven Kaplan, former VP of Customer Success Finance at Nutanix.

A 2020 study from IDC on the value of running applications in a hybrid cloud environment shows the lower cost of migrating workloads to a hybrid setting compared to a public cloud. Moving workloads across public clouds typically entails significant costs in the form of staff time, staff training, and other third-party costs. The study indicates that migrating to a suitable hybrid cloud can require as much 59% less staff time and cost 57% less overall.

A similar IDC study on the benefits of the consistency provided through a hybrid cloud indicates a significantly lower total cost of ownership when using a consistent hybrid cloud over a simple public cloud. In bursting scenarios, those in which data runs in a private cloud and bursts into a public cloud to meet heightened computing demands, the study shows a 44% lower TCO over a five-year period.

The total ongoing operating expense savings in running a hybrid cloud environment, including benefits in productivity, risk mitigation, security, IT administration, and infrastructure maintenance, came to nearly $900,000 a year for 100 VMs.

Source: IDC

Nutanix Clusters (NC2) allows IT teams to emulate their Nutanix-powered private cloud data center and run it in a public cloud service. The helps create a hybrid cloud environment where workloads can run across different clouds. This gives organizations control on hybrid cloud spending through automated cost governance policies, such as using the same software and licenses across all supported clouds.

The Economics of Data and Storage Management

Data transfer and management costs are one of the most overlooked and poorly analyzed expenses in designing a hybrid cloud deployment strategy for new workloads or migrating to a new architecture. 

“Cloud provider pricing is complex and the cost of services like data transfers may even help determine the right architecture for an application, where it is run, and where its data is stored,” explained Haff.

“Egress costs happen when moving from cloud to on-prem, but there are even charges when moving data between zones and regions,” said Lenley Hensarling, Chief Strategy Officer at Aerospike. 

“Careful design can minimize these costs.”

Traditionally, organizations spent a lot of effort and money on collecting and storing data. Hybrid cloud models feature simplified data management with different storage and access options for data that needs to meet privacy regulations and that which doesn’t.

It is simple to set up pay-as-you-go storage systems for non-critical data (which can be moved to cheap public cloud storage as and when it is archived or goes below a preset threshold of access frequency). At the same time, it is possible to create an isolated environment with limited compliance and maintenance expenses for regulated or critical data.

From a hardware perspective, hybrid cloud deployments reduce the need for expensive storage arrays typical to a private cloud with a tiered storage model, which improves both the cost efficiency and the speed of backups and disaster recovery. Simultaneously, compared to the public cloud, the hybrid model offers cost-saving storage features such as compression, deduplication, and thin allocation to a smaller or larger extent.

The IDC study referred to earlier also found savings of over 47% over a five-year period for a DR workload in a hybrid environment compared to currently popular setups on native public cloud.

Hybrid Cloud Deployment Goes Beyond Cost Savings

Clearly, the hybrid cloud adds numerous advantages to those of public or private models by themselves. That said, it’s important to get a correct and accurate cost/benefit analysis for each workload or scenario before going ahead with hybrid cloud deployment in any direction, whether from an on-premises data center to the cloud or one cloud to another.

With proper planning, however, it is possible for enterprises to move forward with deployment that empowers a number of lucrative hybrid cloud scenarios and use cases including:

• Big data processing via third-party computing resources
• Digital transformation of outdated legacy hardware
• Reliable disaster recovery as a service
• Cheaper and faster application development and testing

The benefits and inherent savings that come with migrating to a hybrid solution, and therefore future-proofing an infrastructure that might otherwise rely on slow and barely compatible legacy systems, makes the process an investment that many enterprises cannot afford to pass over. 

Moreover, the right third-party platform can further reduce costs and strains exerted on a consumer company by hiding the complexity of infrastructure management behind a simplified control panel. This reduces the need for an organization to maintain or re-hire specialized IT teams for cloud installation or migration.

Moving to any form of cloud doesn’t simply lead to optimized spending. In fact, without proper planning, even organizations opting for hybrid cloud deployment could be in for a nasty shock when their monthly bill arrives. As Kaplan emphasized, “It’s not about cloud first; it’s about cloud smart. You can be put out of business really quickly if you don’t manage your consumption wisely.”

Editor’s note: Learn more about multicloud model use cases and the costs associated with cloud migration.

This is an updated version of the original article published one June 17, 2021. 

Featured Image by Pikrepo

Dipti Parmar is a marketing consultant and contributing writer to Nutanix. She writes columns on major tech and business publications such as IDG’s CIO.com, Adobe’s CMO.com, Entrepreneur Mag, and Inc. Follow her on Twitter @dipTparmar and connect with her on LinkedIn.

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