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Public Versus Private Cloud

This article was first published in the Manila Bulletin [link]. Republished with permission from the author.

by Reynaldo C. Lugtu, Jr., Vice President IT Enabled Services (IG), Globe Telecom Inc, and ACCA Board Director 
20 Jun 2015

By now many senior executives have been exposed to the buzzword of cloud computing.

Because of increasing pressure among finance chiefs to increase shareholder value while providing control over assets, ensuring compliance is met and mitigating risks; there is the attendant growing concern around maintaining the security, availability and reliability of the financial data that relates to suppliers, employees and customers’ information. Hence, CFOs and finance executives nowadays recognize the benefits as that cloud computing brings to an organization. To wit:

• Greater flexibility. Cloud computing can be deployed and used by an organization faster than the traditional way. For example, a cloud email service from Google Apps can be available to new employees in a matter of hours or even minutes. For companies experiencing peaks and valleys in the use of servers for their systems, infrastructure-as-a-service cloud can provide the needed capacity on-the-fly.

• Cost efficiency. Cloud services can easily scale without having to invest much on software or hardware. Instead of spending on CAPEX for hardware or software, cloud services charge an OPEX periodic fee, may it be monthly or daily.

• Improved productivity. Due to the easy deployment and use of cloud services, employees spend less time on configuring or fixing traditional internal systems.

• Time savings. With cloud computing technologies, companies can deploy simple and critical systems such from email to ERP in a faster way; hence, saving on time to deploy which translates to faster use such systems.

Despite the growing use of cloud computing and the obvious benefits it brings, still many finance executives cite concerns of data security and third-party provider dependencies. That’s why it’s important that decision makers understand the different cloud deliveries and technologies, such as private and public cloud.

The pros of public cloud include high scalability, faster turnaround time, and low maintenance. However, the cons include lack of security, which is a main concern among end-users, compliance on data sovereignty and slow response of data speeds because data may reside outside the country.

The pros of private cloud, on the other hand, include enhanced security, more control over resources, and higher performance because it resides within the premises of the customer or in the datacenter of a third party provider. Some of the cons include slower time to scale up, on-site maintenance, and relatively higher cost.

Many CFOs and CIOs recognize the robust security private cloud brings, but this needs to be balanced with cost and turnaround time. That’s why some companies and third party providers combine the best of both world of public and private cloud – enter virtual private cloud or VPC.

VPCs were introduced specifically for those customers interested in taking advantage of the benefits of cloud computing but who have concerns over certain aspects of the cloud. It is a hybrid model of cloud computing in which a private cloud solution is provided within a third party cloud provider’s infrastructure in their own datacenter. The latter isolates a specific portion of their public cloud infrastructure to be provisioned for private use and are not shared with any other customer; hence, addressing concerns on data security.

So how will a finance chief weigh its decision to choose among these types of cloud offerings? Companies need to look at each workload that it needs to run, from none critical systems as email to critical ones such as ERP, to determine which kind of cloud it should be in. By asking the right questions around criteria such as availability, security and cost, the answers will push the workload to the public or private, or maybe virtual private cloud.

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