In my previous article, I discussed how procurement teams can help their businesses when buying support or services for open source software. There is another key issue procurement teams will have to understand in relation to implementations of this type–cloud.
Traditionally, applications were installed on physical servers and run in a company’s data center. Cloud eliminates the need to run your own servers as applications run on another company’s hardware. However, finding the right approach to supporting this setup is not always simple.
Gartner estimated that total spend on cloud computing in 2019 would be $214.3 billion. Amazon Web Services is the leading supplier of cloud, with an estimated $6.6 billion in cloud sales during the third quarter of 2019, followed by Microsoft Azure and Google Cloud Platform.
For developers, cloud services are very convenient for implementing and running applications. However, procurement teams shouldn’t let developers rely solely on cloud providers to purchase and support a service. Buying-in cloud and support can deliver a business advantage but can also result in much higher overall costs.
Three Main Approaches to Cloud
This is because not all cloud services are the same. There are three main approaches: applications can be hosted in the cloud, be provided as services or run on managed implementations. Each approach has benefits and drawbacks. We will continue in this article by using a database deployment to give examples of the choices you should be ready to consider.
Hosting a database in the cloud is exactly as it sounds. Rather than installing the database yourself, you run it on a cloud provider. You are still responsible for checking that the project is secure and running well, but you don’t need to purchase hardware. You pay for the service and can manage the implementation yourself, in a way that suits your business.
Alternatively, a managed service can host and helm the implementation. This takes away some management overhead and costs that would normally be associated with the database while still allowing a degree of flexibility in how the instance can be implemented and tweaked to meet your specific requirements. This option provides an opportunity to save on hardware and management but sacrifices some flexibility and costs more than the baseline cloud service.
Finally, there are “database-as-a-service” offerings. With little to no management overhead for the team, this option manages tasks such as server provisioning, patching, setup, configuration, backups and recovery for you, but offers a very limited range of customization. For teams with limited skills or time, this ensures critical tasks are carried out properly.
Procuring the right option can save time and reduce maintenance overheads but conversely can also lead to unnecessary costs and a lack of flexibility. It is important that your developers understand the different options available and you confirm the right approach during your commercial discussions.
One of the biggest concerns around cloud is the risk of being locked into a specific cloud supplier. The value of cloud is how easy it is to get started and innovate. However, keep in mind that it can also be expensive to move or export data out of the cloud. Companies should avoid being too reliant on any single technology provider since this can lead to additional costs if the supplier raises their prices or you have to switch providers in the future.
Cloud providers are incentivized to increase usage of their cloud platforms. Although they want their customers to be happy, as this reduces churn, their priority is how their cloud platforms run, not how infrastructure choices, such as databases, affect their individual customers. Many cloud services are marketed as “fully managed,” but in reality, a shared responsibility model is in place.
It is therefore necessary to understand where your responsibility ends and your cloud provider’s begins. To avoid gaps, do not assume your cloud provider can or will make changes. You need to ensure you are fully aware of the responsibilities of each party. Equally, while the cloud provider may supply management services to you, they may not look for improvements on your behalf.
How Procurement Can Help
According to recent research, the majority of companies now use multiple databases and services. Around 92% of companies are running more than one database simultaneously. If your developers pick the wrong cloud service from the start or don’t provide the right information to procurement, cloud deployments can quickly rack up additional, expensive consumption bills.
Seeking independent advice on how a service will run in practice can help improve the chance of a new project being successful over time. Similarly, keeping control over the procurement of these services is essential to reducing costs and ensuring your project delivers results.