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IT orgs see clouds from both sides, pick hybrid cloud infrastructure

IT executives from large organizations at EMC World say they want to provide the same services as public clouds, but for less money internally.

LAS VEGAS -- Public clouds have gained traction for minimizing costs and simplifying IT services. Still, large IT organizations often find they can provide the same services internally for a lower cost.

That results in a hybrid cloud infrastructure set up that keeps most IT services in a private cloud while providing the flexibility to use a public cloud when it makes sense.

IT executives at EMC World discussed that notion. Representatives of several large organizations said maintaining an internal public cloud gave them more control and proved more cost effective than using Amazon Web Services (AWS) or Microsoft Azure for key functions. Still, they want to encourage their users to take advantage of public clouds when it makes sense.

"We're really focused on the ability to stand up services and provide public cloud standard services within our offices," said Eric Craig, CTO of NBC Universal.

"We're going to build a hybrid, like we think most industries will do. We've experimented with the public cloud, and we found it is not necessarily the lowest cost option for all the things we do. We look at, where do we have needs for excess capacity that burst beyond our ability to contain that capacity in a cost-effective way?"

Paul Reyes, vice president of infrastructure management and operations for Dallas-based Energy Future Holdings, said he found the public cloud would cost more than setting up an internal cloud for his needs.

We were able to ... cut about $30 million of operating cost through virtualization and consolidation.
Eric CraigCTO, NBC Universal

"We did a study on the cost model," he said. "We found there is a right niche for that [public cloud], but when you get over 50 IOPS and require four nines availability, the cost became astronomical."

Joe Rostock, CTO of healthcare analytics firm Inovalon, said the public cloud could cost less at times but a private cloud gives his company more control over its data.

"We refer to our infrastructure as our health cloud," Rostock said. "We assessed options in the public cloud. We found it was more cost efficient to take advantage of a public cloud offering to burst where we needed to, but we want command and control to be inside our cloud."

Craig and Reyes said their companies built a hybrid cloud infrastructure using EMC's Enterprise Hybrid Cloud (EHC), a combination of cloud services and EMC infrastructure. EHC consists of Vblock converged infrastructure or Vspex reference architecture, EMC ViPR for management, and either VMware, Microsoft or OpenStack cloud and virtualization software.

Craig said by using EHC and virtualization, "We were able to move several tons of equipment outside of the data center, and cut about $30 million of operating cost through virtualization and consolidation."

Reyes said he forecasted a savings of $54 million through 2020 through a reduction of outsourcing and IT contractors and by avoiding technology refreshes.

The key to a successful cloud is to be able to offer services that users can get from public clouds. For Inovalon, the services extend beyond its employees to its clients. And that includes healthcare plans, hospitals, doctors and researchers.

"Our clients can provision their own services," Inovalon's Rostock said. "That was the dream of a cloud offering, to make it so simple that IT could provide it as a service. We do it for our internal clients and we enable it on our products as well. That just would not have been possible in a public cloud, given all the controls that we need to enable that."

"I want to be able to tell our business units, 'If you want to stand up services on the NBC private cloud, go ahead,'" Craig said. "We have the technologies and the operating processes to do that, and when it's time to move appropriate workloads to a public cloud, we have the technologies and the operational processes to do that."

Reyes said his goal of a hybrid cloud infrastructure is to provide a "brokerage service" for IT functions such as server provisioning and application provisioning. "We want to not only provide internal services on demand, but the flexibility to move in and out of the cloud down the road," he said. "How do I make internal services as flexible as an AWS or Azure? How do I make our business look at us like a service?"

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Do you agree private clouds can cost less than public clouds for large-scale storage implementations?
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I wonder how people are calculating costs for public vs. private networks. What factors are they including in their TCO?
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