We live in challenging times where individuals and organizations are overwhelmed by the global health crisis, which has caused a sudden shift in the way we work and operate. On the economic side of the equation, the market is constantly changing. Companies are striving to achieve their financial goals in a world stricken by COVID-19. Moreover, businesses are trying to keep pace with the dynamic and ever-fluctuating digital market. Specifically, the public cloud market is expanding more rapidly than ever before. Current projections indicate that public cloud is going to reach $623.3 billion worldwide by the year 2023. Further projections show an increase in cloud market growth developing all through 2020 and beyond. Financial services, and hedge funds alike, are taking the leap towards cloud adoption. Time has shown that traditional data centers failed to meet modern-day workloads and applications, both of which rely on powerful infrastructure, security and stability, functionality and seamless collaboration. In the public cloud vs private cloud debate, things are becoming interesting to say the least.
Public Cloud vs. Private Cloud Showdown
Beginning with a high-level picture on this matter, some facets of private and public cloud services are quite different. Let’s have a look:
- Higher Costs
- Inflexible Capacity Planning
- Lack of Access & Control
- Manual Maintenance
- Human-led Security
- CAPEX Model
- Lower Costs
- Flexible Utility Computing
- Near-unlimited Scalability
- High Availability
- Automated Maintenance
- Top Notch Security
- OPEX Model
Private Cloud Explained
As you would expect, the private cloud entails a cloud service not shared with any other organization. When a business resorts to traditional private cloud hosting, the infrastructure, maintenance, and management of private cloud servers is assumed by that business.
Such an environment is problematic for a lot of businesses, as it involves a substantial amount of pre-planning, understanding capacity needs way upfront and thinking of hardware and other services (broadband, cooling, electricity, and so on).
Public Cloud Explained
The workload responsibilities vary depending on whether the workload is hosted on Software as a Service (SaaS), Platform as a Service (PaaS), Infrastructure as a Service (IaaS), or in an on-premises data center. As you consider and evaluate public cloud services, it’s critical to understand the shared responsibility model, which defines tasks that are handled by the cloud provider and which tasks are handled by you.
Within the public cloud environment, cloud service is offered to multiple customers by a high-level cloud provider. In a nutshell, public cloud services are shared between multiple tenants (users). You are given complete ownership to accommodate complex business demands. Lock down by tenant is a key feature here. Everything is accessible, and yet there’s no chance of other clients accessing or viewing the data.
Public cloud denotes SaaS, PaaS, and IaaS services. Simply, everything stays within the public cloud service and runs on remote servers that are managed by the provider. Commonly, clients and customers of that provider gain quick and intuitive web access to everything they need. The additional benefit is having a seamless transition for users, thus emulating the feel and workflow of traditional drives. Public cloud services do not necessarily mean drastically lower costs right off the bat. Conversely, they are an efficient way of handling costs without worrying about how business needs will change further down the road. Server management of SaaS and PaaS is not handled by internal teams; hence the cloud provider does all the heavy lifting there. Essentially, internal teams can focus on your core business.
Using the Cloud as Your Shield
Now that you understand the differences between public and private cloud, let’s talk about how public cloud combats the pain points of traditional, on-premise systems. To comprehend what traditional on-premise set ups entail, let’s break it down to 3 principal disadvantages that can easily be countered via public cloud adoption:
Private Cloud Gives You High Vulnerability
Enterprises frequently have their production environments located within the organization’s office locations. Precious data or info becomes highly exposed to physical access via unauthorized users. Company data is increasingly open to insider threats. In fact, research indicates that in the past year or so approximately 68% of 437 IT professionals regarded their organizations to be moderately to extremely vulnerable to insider threats. So, potentially anybody who’s an enterprise employee might want to steal or compromise the data of your organization. All of these factors increase the chance of a security breach. Valuable business information and delicate data should be shielded from this.
Public Cloud Gives You Anonymity
Data storage that is not in an easily identifiable location is less likely to be compromised, stolen, or attacked. Also, major public cloud providers such as Microsoft and Amazon go to great lengths to protect their locations and servers with tight security others cannot match (everything from security cameras, to biometric ID checkpoints). Recent examples from certain locations have shown that Amazon and MS made significant investments into such endeavors to ensure an incredible level of efficiency and security.
Private Cloud Gives You Overpriced Long-term Commitment
Securing on-premise data storage and having high-level protection is a big deal. This traditional method is way past its sell-by date. It’s time-consuming and expensive. Enterprises know exactly how complex their data management can get and how secure it needs to be. They no longer need to be beholden to inflexible system ownership. Historically, financial services and hedge funds put their data in the private cloud, and they get locked into one supplier. In other words, they end up tied to services and solutions without being able to shift to a different vendor. This has a massive, potentially negative long-term impact on the business and workflow management.
Public Cloud Gives You Agility
We’ve already mentioned this, but to recap, companies can optimize services, have their costs managed, in addition to unlocking numerous features and more functionalities that transform financial business operations to a more granular, auditable workflow. You provision the services based on what business units are consuming it. Segment your data management according to the needs: trading team, tech team, dev team and other business units.
Private Cloud Gives You Limited Options, Limited Support
Poor infrastructure is frequently the case with private cloud. For instance, traditional data centers often lack experienced teams of cybersecurity professionals to properly protect their on-premises data. This is one of the main reasons why on-premise cloud services are becoming less popular these days. But more importantly, utilizing private cloud services also involve storage capacity limitations. Less advanced technologies are employed, which usually have low capacity. Another disadvantage is that privately held data is more difficult to access from remote locations, because of increased security measures.
Public Cloud Gives You Powerful Infrastructure
Relying on public cloud providers lets you feel more at ease because useful solutions and tooling are available straight away. Your business operations benefit immediately from virtually unlimited resources, the ability to rely on massive capacity for data storage, and easy transition for complex financial workloads. You can also access relevant data from anywhere, at any time. So, accessibility is far greater than in the private cloud environment. The customers’ and clients’ data stays secure at all costs within the public cloud because major cloud providers spend millions upon millions of dollars to keep it that way. Such a high-functioning system from cloud providers like Microsoft, Amazon or Google requires hundreds of thousands of IT professionals all over the world.
Leveraging the Cloud for Financial Services
Financial services can easily handle intricate and robust workloads instantly on the public cloud. Application hosting, data management and storage are all handled swiftly and from the get-go. What’s more, any weekly releases, SaaS-oriented QA testing, dev deployment is run in an up-to-date manner, where a single server scales to business and developer needs. The beauty of it is that business unit add-ons or shifts in strategy or management can be included along the way.
The public cloud combined with the efficiency of expert-level managed services, are already regarded as the perfect tech-cocktail so to speak. This cocktail shows massive promise for larger capital firms in the near future as well as right now. For example, in the current global crisis, certain businesses experienced ROI simply by switching to the public cloud. Additionally, on March 29, 2020, Microsoft officials confirmed a 775% increase in demand for its cloud services in locations enforcing social distancing and stay-at-home isolation due to COVID-19.