The Big Bang Approach to Cloud Is Not the Only Way

Matt Nash

By Matt Nash, Cloud Product Manager, Pulsant

Despite everything the major cloud providers offer, the reality is most organisations will continue to rely on hybrid IT architectures for the foreseeable future. This is the combination of public cloud (AWS, Google, Azure and so on) with private cloud and on-premises environments.

The reasoning behind hybrid architectures is simple. Organisations want access to the cost and flexibility advantages of public cloud, along with their vast ecosystems of applications. But they also want the assured costs and operations of on-premise environments.

For many financial sector companies, security and compliance are also major considerations. There is a strong feeling the only secure location for highly sensitive customer data is on-premise. In addition, many banks need to continue using bespoke applications that are ill-suited to public cloud operating systems. Financial institutions frequently have all kinds of complex but business-critical IT that they dare not migrate to the public cloud.

It is for these reasons financial sector companies are dividing their data and workloads between on-premise infrastructure and public cloud providers. This is not a step on a journey to being 100 per cent cloud, it is the strategic destination many have chosen, and it’s likely that balance will change over time.

Companies may have looked at going fully cloud before returning to a hybrid set-up- because of its inherent advantages. If they have a low-cost, reliable, and secure capacity that deals with a good percentage of normal business processes, then moving it to the cloud makes no sense. Providing organisations have a cloud strategy in place to deal with peaks of demand then there is no need to go ‘all-in’ with one provider.

For highly unpredictable and resource-heavy workloads that need to be accessed by employees and customers around the globe, it is hard to beat the hyperscalers – the big names in public cloud. But this can be a sledgehammer to crack a nut. Even in financial services, a large proportion of business computing does not require this level of service. If an organisation is happily, cheaply and securely running payroll every month, then why start a potentially expensive migration that will leave it in less control of costs in the future?

Getting a clear view of cloud costs in hybrid architectures is notoriously hard. When tempting introductory deals disappear, costs can quickly rise. Organisations then find the hyperscalers’ complex charging structures difficult to fathom, and if a company has not taken a strategic view it can end up a virtual hostage to its cloud provider.

Think clearly about hybrid cloud strategy

The problem many businesses have is their reliance on cloud services has developed without any grand design. Different departments have signed up for different services without taking a strategic view. Developers spin up environments and then forget about them. IT may migrate workloads without paying full attention to infrastructure performance or cost optimisation. All these factors are a recipe for overpaying and losing control of core services.

As a first step to retaining control, organisations need to get a clear and accurate view of exactly what they are using and where workloads are running. Loss of oversight and visibility are all too common. In the Thales 2022 Data Threat Report only 56 per cent of responding organisations said they were very confident or had complete knowledge of where their data was stored.

To regain control, financial organisations need access to hybrid cloud management tools within a next-generation cloud platform to they can optimise performance and cost across every environment. Once they have this control from the proverbial single panel of glass, they can take steps to ensure they are sweating their resources, both on-premise and in the cloud, free of ‘zombie infrastructure’ that soaks up costs while providing zero business benefit.

Next is some strategic thinking about where workloads run, and where they could run better. The requirement here is for a specialist cloud workload assessment to provide a full inventory of applications and workloads to match them to the right public cloud providers. This will provide a highly beneficial cost comparison across the full range of cloud providers.

Crucially this approach means companies can deal with individual workloads one at a time, according to their timetable and the needs of the business, without being rushed into a mass migration.

Future-proofing your cloud investment

The key benefit of a well-designed hybrid architecture is the freedom it gives an organisation to pivot in several directions as future strategy evolves.

More customers are embracing edge computing as part of this evolution. Edge computing takes advantage of 5G, Internet of Things (IoT) devices and edge data centres to change how companies make use of data. Ever more compute power is moving to the edge of networks – where the data is created. This saves on interconnect costs, improves security, and cuts latency.

Some applications will still depend on central processing and advanced artificial intelligence (AI) – but even then, much of the data-crunching and early analysis will happen at the edge. For instance, real-time detection of fraudulent activity by consumers or employees using smartphone or laptop banking and finance applications will need some intelligence at the edge to provide timely warnings. But partly processed data might then go to a central data centre to power predictive capabilities and cost analysis.

Hybrid architecture optimisation tools

Yet even if a financial sector organisation is not yet ready for edge computing, a hybrid cloud architecture is in all probability the best option. It allows the organisation to take advantage of the undoubted cost-savings the hyperscalers can provide while ensuring it does not lose control of core assets and data, nor put its security in jeopardy.

Companies of all sizes will extract maximum performance, cost control and agility from hybrid if they take a more strategic view and start using some of the management tools in next-generation cloud platforms that are designed with hybrid and edge environments in mind. Banks and financial services companies can certainly enjoy the best of all possible worlds. They will gain the flexibility and innovation of the cloud, be open to advances in edge computing, and maintain their most sensitive data and workloads either on-premise or in a secure private cloud. They can maximise organisational agility and innovate swiftly to meet new market requirements, without becoming dependent on hyperscalers or jeopardising compliance and security.