Cloud V In-House... Where to Run That App?

One of the biggest decisions IT managers have to make is how and where to run data center applications. Fortunately, there are multiple choices that lower costs and increase business agility, including server virtualization, internal clouds, public clouds and external private clouds.

Many IT organizations are taking advantage of these options. Server virtualization is currently being used by more than 70% of enterprises to reduce costs, and cloud computing is being used or planned for use by more than 10% of corporations, according to Antonio Piraino, research director at Tier1 Research.

Rolling your own cloud
Today, customers are leaning toward the use of internal clouds over external clouds because of the various risks associated with external clouds, including security, data privacy and SLAs. The significant downside, though, is that IT has to build this environment and no single vendor provides all the pieces.

"The data center staff will have to create the automation layer for their internal cloud because today no vendor provides a complete software layer," Swan says. "The staff will essentially have to buy the pieces and put them together." A large enterprise could spend millions of dollars over several years creating a full-blown internal cloud that produces the cost savings and exhibits the automation desired.

All in all, "decisions about the use of clouds versus server virtualization depends a lot on how heavily you have invested in your data center and whether you have sufficient capacity in your data center," says Verizon Business's Deacon. Most companies do not rip and replace; that is, they do not shut down their data centers and move everything to clouds, he says. Likewise, companies that have been outsourcing are not going to immediately start creating an internal cloud in their data centers.

"Clouds provide automation and orchestration not found with server virtualization," says Jeff Deacon, cloud computing principal for Verizon Business's internal applications.

What they do depends on what they have been doing and what they are most comfortable with, Deacon says. "Over time, enterprises that have traditional outsourcing contracts and managed hosting will convert to clouds, because it makes sense, is cost-effective and offers more flexibility."

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