Cloud computing: saves billions of euros, but is it right for everyone?

While cloud computing is gaining popularity around the world in various forms, the hybrid solution is considered the most flexible. According to IT experts, hybrid cloud provides unlimited development opportunities and allows one to consider specific business needs. However, experts note that the decision to move operations to the cloud, even if in part, should always be made after an individual assessment of the needs and capabilities.

Choice is determined by Cost


According to the Head of Distributed Technologies at Danske Bank, Vaidotas Januška, cloud computing can be categorized into three types, which are private, hybrid, and public cloud services.

“The best known public clouds are those offered by global companies, such as Microsoft, Amazon or Google. At first glance, they’re extremely easy to use, since you only need to create an account, choose the desired product and start using it; however, a more in-depth look reveals further challenges. One of them is the costs that are incurred not only due to use, but also audits and risk management,” says V. Januška. 

He claims that costs increase in the case of additional safety and privacy requirements in a given business area, e. g. the financial industry.

The middle ground between the private and the public cloud is hybrid technology that allows an organization to have partially external systems. An example of such hybrid cloud is the Microsoft Teams service recently adopted by Danske Bank.

“If internal capabilities are insufficient, they can be “borrowed” from the external system. However, these solutions are harder to integrate and less secure, since part of the processes run outside of the organization. It can also be difficult to change the public cloud service provider as the migration processes can be very costly,” says Prof. Dr Dalius Mažeika, Head of the Department of Information Systems at Vilnius Gediminas Technical University.

The expert claims that the highest risk to data safety arises from virtualization because of the additional middle layer between the physical IT infrastructure and the digital service. However, he notes that cloud computing services are provided by trusted companies employing the best IT specialists, which means the risk is minimal in most cases.

Private Cloud Is Compared to Drinking Coffee

Despite all of this, only a small portion of businesses are willing to use the public or hybrid cloud. Some dislike the suppliers’ restrictions on system configuration, others have doubts about security or cannot use public clouds because of internal policies. Also, a private solution is often more flexible.

“The main advantage of a private cloud is the ability to use the IT resources as needed – expand or split them and pay for what is actually used. Also, a private cloud is better suited to the needs of a large dynamic organization,” says Prof. D. Mažeika.

V. Januška compares the private cloud to drinking coffee – it is nice to go to a coffeehouse, but a true coffee lover must have a coffee machine or a coffee pot at home. The same is true for cloud computing: the economic benefits and flexibility of a private solution grow as it involves more and more processes. Obviously, private cloud services will not have the same amount of solutions provided by any public cloud service provider, but the private solution can be specialized and suited to the organization’s needs. This allows one to adjust to the growing needs of an organization without having to wait for the public cloud service providers to make changes; after all, they have thousands of users with varying needs and it takes longer to find a common solution for product or service in scope and have that in the roadmap.  

“At the end of 2019, the Bank of America announced that it saves 2 billion dollars annually after having deployed a private cloud computing service six years ago. This demonstrates that a well-developed private cloud brings tangible financial benefits. In addition, its operation is the responsibility of an internal IT infrastructure team, which adds confidence,” he says.

The Cloud Can Run Thousands of Servers

One of the main issues that the private cloud helps to address is independence from the terms imposed by external providers. A digital services company is responsible for the quality and accessibility of the services, which also makes it accountable for the disruptions caused by the external service provider.

“If an incident occurs, access to the system data of a public cloud becomes limited or impossible; however, the disruptions of the private cloud can be instantly addressed and eliminated by the IT team. Confidence is particularly important in the cloud computing industry, as it also determines the quality of the service. This is backed up by agreements and their management, since they are required to ensure quality and safety,” says Prof. D. Mažeika.

V. Januška noted that a private cloud service better meets the needs of an organization at a specific point in time, enabling flexible solutions to be found.

“This service allows one to create thousands of virtual servers in hundreds of physical ones, and to add new or remove unnecessary servers every day. Virtual servers ensure the operation of thousands of micro services and, if necessary, allow them to be interchanged; this is very easy to do. Process monitoring is also easier because the disturbances noticed can be eliminated right there and then,” says the expert.

He points out that there is an increasing focus on containerization, which is becoming part of strategies for the organizations going forward. The so-called containers are an even more flexible solution, using fewer resources than virtual servers. According to V. Januška, containerized applications allow developers to deliver application updates faster and more efficiently; additional copies of an application can run immediately when necessary to handle the load. This enables one to use the infrastructure even more effectively and to adopt the public cloud with minimal costs, which often arise from the use of different virtualization solutions within the company or in the infrastructure of a public cloud provider.

Is Rental Housing Our Future?

V. Januška noted that certain organizations, such as banks, have centralized computing systems (mainframes) that perform essential banking functions. Today these mainframes serve as an axis around which most IT services revolve. However, V. Januška says that while experts build these services on such foundations, other alternatives are increasingly being researched.

When describing the future of cloud computing, V. Mažeika compares the three categories of solutions to basic amenities: will people of the future continue to live exclusively in rental apartments and drive rental cars? Probably not – both rental opportunities and private property are likely to survive.

“As the supply of public clouds keeps growing, their price will decrease; therefore many organizations will find this choice preferable, especially with added flexibility and resource expansion capabilities. Businesses will be able to steer the investment required by the private cloud towards other needs and development of the company,” says the scientist.

V. Januška is convinced that hybrid technology is the future: “It is especially beneficial to businesses who run private solutions but sometimes need additional capabilities. In such cases, capacity can be increased by temporarily transferring part of the services to the public cloud; when things return to normal, internal systems can be employed. Public cloud suppliers will always lead with innovations and new services, setting new trends or offering exclusive services; in such a case, the ability to make rational choices which cloud offering to utilize is an advantage.”