Is the public cloud open for business?

By: Vincent in’t Veld

The public cloud used to be seen as little more than a shortcut to cost-savings, but today it’s being harnessed by a new breed of businesses to drive dramatic, fast-paced innovation. From Spotify and music retailers, to Airbnb and conventional hoteliers, traditional sectors are finding themselves overmatched and undercut by agile, cloud-first competitors.

IT isn’t simply an essential resource for these disruptive new entrants, it is their business. The public cloud delivers the connectivity, scalability and global reach these organisations rely upon, allowing their digital ecosystems to absorb an almost limitless number of users with a minimal uplift in cost.

According to Mike Curtis, VP of Engineering at Airbnb, the public cloud means their engineers can “focus as much as possible on the things that are unique to [their] business, not running a ton of infrastructure”. Spotify’s Nicholas Harteau agrees, saying: “in a business growing quickly in users, markets and features, keeping pace with scaling demands requires ever increasing amounts of focus and effort”.

A cloudy outlook?

Thanks to the popularity of these tech savvy, agile organisations, there’s a growing perception that a wholesale migration to the public cloud can ignite business success. For instance, Airbnb and Netflix made the move to Amazon Web Services soon after their launch, while Spotify recently transferred its core infrastructure from on-premise data centres to Google Cloud.

However, most organisations should pause for thought before trying to follow suit. Despite common misconceptions, these dynamic firms aren’t truly ‘100% public cloud’; they still rely on some private IT infrastructure, whether that’s an in-house data centre or equipment hosted in a colocation facility.

The reason is simple. The public cloud can’t solve every business challenge, particularly when it comes to ensuring consistent application performance, compliance and security. Indeed, a comprehensive switch to the public cloud can actually create new business risks, such as service interruptions that immediately impact both customers and the bottom-line, or even reduced agility when a company becomes overreliant on a single provider.

Pick & mix

While news of their rapid cloud expansion has grabbed headlines, it seems many of these digital disruptors have quietly concluded that a hybrid approach is actually best for business performance.

To maximise flexibility when it comes to managing a variety of capabilities, workloads, applications and data, fast-growth firms are gravitating towards a mixed IT setup that combines on-premise, colocated and cloud-based resources. For instance, eBay and Groupon are both investing in owned or colocated data centre infrastructure as their businesses expand, allowing them to realise a hybrid approach to the cloud with both public and private environments that support different needs.

Only time will tell whether every cloud-based business will follow the same trajectory towards a mixed IT setup. Yet, one thing is clear: IT teams can no longer simply be there to execute on business strategies agreed in a distant boardroom, they must help define them.

No matter how organisations navigate the currents between public cloud, private cloud, hybrid approaches, colocation, or on-premise data centres, there’s one lesson they should all learn from today’s digital innovators: IT strategy is now business strategy.

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