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Can’t decide between public or hybrid cloud? Here’s some help with this critical decision

Hybrid clouds bring together a mix of private, on-premises, and public clouds to accomplish very specific organizational requirements. Such requirements typically cannot be met by any one of them alone. Usually, hybrid cloud-based systems are utilized when requirements are atypical and institutions are willing to tolerate the high costs associated with building and maintaining such systems. Public cloud systems, on the other hand, which can include applications such as Microsoft 365, Gmail, and One Drive, are hosted on public servers on an equal-availability basis. The choice between a public or hybrid cloud sometimes becomes difficult.

While on the cost basis, public clouds are a lot cheaper, the performance aspect warrants deeper analyses and more careful decision-making. Hybrid cloud-based applications are built using interconnections between a private cloud and a public cloud with a clear division of functionality. Often times, the system design happens in such a manner that any critical data with particular privacy requirements is handled in the private cloud while the public cloud handles data that is not critical in nature.

Here are a few points to consider when making an informed choice:

Public or hybrid cloud? Start with your IT budget

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The size of your institution’s IT budget is a paramount factor in this decision or choice. Hybrid cloud-based systems can be very costly in terms of development, maintenance, and management. On the other hand, cost of design, development, and usage is very low in the case of public cloud systems. This is because the same cloud location is used to provide services to many businesses and individuals apart from yours. However, hybrid clouds tend to have lower total cost of ownership (TCO) compared to private clouds.

Personnel in IT department

With a hybrid cloud-based system, you will need to have a significant number of people in your IT department, almost as many as you would need for a private cloud-based system. This is owing to the fact that hybrid cloud systems are built using interfaces between private and public cloud systems. Although hybrid cloud-based systems do utilize some public cloud components, overall complexity is high due to the number of interfaces between public and private cloud components.

Data-privacy requirements

It is important that you consider the data-privacy requirements specific to your sector before deciding on a public or hybrid cloud. If your business is in the health-care sector, HIPAA regulations enforce strict controls over the handling and storage of consumer data. A review of the related regulations would let you understand whether you can get away with tapping public cloud-based systems or would need to build hybrid clouds to implement the requirements related to data privacy. Hybrid cloud-based systems would be more expensive to implement and maintain than public clouds.

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With hybrid clouds, a lot of care would need to be taken to ensure that data is encrypted at the private cloud end before being transferred to the public cloud. In such scenarios, there cannot be any storage of unencrypted data on the public cloud side. Also, there cannot be any access available to keys provided on the public cloud end.

Plans for systems enhancements

The biggest challenge with a hybrid cloud is that changes made in the private cloud component have to be synced with the changes in the public cloud system. Suppose your idea is to execute systems implementation after which you expect the systems code to be more than 99 percent stable. If your plan is that once user acceptance testing (UAT) completes, not many newer enhancements would be expected, you can definitely go for a hybrid cloud based system.

In the case of a public cloud, the responsibility for planning and making systems enhancements lies with the systems provider. This means that there is a dependency on the provider maintaining the system even in this situation, just like for a hybrid cloud. Public clouds are well suited for simple requirements whereas complex, highly customized requirements demand a private cloud. In both cases, there is a dependency of your planning schedule on the provider’s schedule. This means that such dependencies are to be incorporated into timelines and work estimates on your side.

Presence of service level agreements

One of the important factors in making a choice between public or hybrid cloud is the existence of service level agreements (SLAs) from various external and internal stakeholders. Consider for instance the financial-services industry. There are several reports required on a monthly, yearly, weekly and daily basis by regulators such as FINRA and the SEC. If you are an investment-related entity like a broker dealer or a mutual fund, then the SLA factor is critically important.

Even otherwise, most firms have significant requirements related to internal reporting for audit and finance. In such scenarios, there can be significant advantages from employing a hybrid cloud-based design. Make a review of the complete requirements to ensure that SLA requirements can be met with a public cloud-based design, if there are limitations forcing you in that direction.

Capacity-scaling requirements

Capacity requirements for your business are an important factor in determining whether you should opt for a public cloud-based system or a hybrid cloud system. While it is true that public cloud-based systems give you scalability on a demand basis, the sticking point is that public cloud capacities may not be tailored to your organization’s requirements. Also, if your business is in a sector like e-commerce, for instance, you would often require rapid capacity scale-ups to meet spikes in demand. In such situations, hybrid clouds can be a better fit for your need.

With hybrid cloud systems, you can get balance between the most sophisticated private cloud systems, which give you the greatest amount of control, and public cloud systems, which are inexpensive but give you the minimum customization.

Both a public or hybrid cloud system can reduce costs of development and maintenance, and provide ease of maintenance and updates. Hybrid clouds can be a viable option in many cases owing to their ability to give you private cloud-like capabilities and prices that are a lot closer to those for public cloud systems.