What Are the Benefits of a Hybrid Cloud Environment?

Hybrid cloud solutions have been helping companies save on their IT budget for over a decade. As the demand for cost efficiency for workloads and data security rises and the need to avoid vendor lock-in grows, more and more companies are turning to hybrid cloud solutions.

Hybrid cloud environments help your organization save money or avoid vendor lock-in in a few ways. They give your company the infrastructure to rethink your cloud migration and application refactoring strategies, which leads to increased savings and reduced IT hours. They also reduce the cost of cloud operations. Lastly, hybrid cloud infrastructures allow your organization to store data in on-prem servers and private clouds, which helps you retain data sovereignty for your customers and resource flexibility.

Hybrid Cloud Benefits At-a-Glance

The cost of cloud migration is a growing concern for companies. Gartner predicts that by 2024, 60% of infrastructure and operations (I&O) leaders will encounter public cloud cost overruns that negatively impact their on-premises budgets. Hybrid cloud infrastructures let you pick and choose which on-premises data and application workloads you want to migrate to the cloud, which offers a considerable cost advantage. If done correctly, hybrid cloud infrastructures can lower costs, increase IT efficiency, and reduce time-to-market for new products and services.

Optimized Workloads: Hybrid cloud hosting services can leverage optimal computing resources for every workload. This lets you determine the complex workloads of your infrastructure and optimize them for the cloud while keeping simpler workloads on-prem or in your private cloud infrastructure.

Data Security: Hybrid clouds allow you to store sensitive customer information on your private infrastructure while storing less sensitive data in the public cloud.

Decreased Cost of Cloud Migration

Hybrid clouds provide the necessary infrastructure to determine which workloads to migrate to the cloud. In a hybrid cloud environment, you aren’t forced into a “lift-and-shift" migration model. You can migrate some workloads to achieve cloud benefits and retain others on-premises to avoid costly issues.

There are several reasons to keep workloads on-premises. To start, keeping workloads on on-premises servers simplifies workload management and security. They also reduce compliance and privacy concerns. Lastly, as demand grows for your critical applications, a hybrid cloud infrastructure allows you to scale horizontally, letting you migrate typical, three-tier web applications to the cloud. At the same time, you keep core components for data transaction processing on-prem. This type of migration gives your mission-critical applications headroom to scale by only using components when you need them.

A More Manageable Approach to Reengineering Apps

The increased scalability of hybrid clouds also applies to refactoring applications for the cloud. According to a study on hybrid cloud trends conducted by the Enterprise Strategy Group (ESG), six in ten organizations cited application migrations when asked to identify the most challenging aspect of adopting cloud services. Specifically, 31% reported the preparation work for application migration. Another 29% pointed to the process of refactoring or redesigning and moving these applications to cloud-based platforms as the most difficult aspect of cloud adoption.

According to the ESG, organizations need 27 days on average to refactor and migrate an application to public cloud services. At this rate, it would take 7.4 years for a business to migrate 100 applications. Others report refactoring can take three to six months when adding new features to simplify or enhance the user experience to upgrade applications to meet current code standards.

You should weigh the complexity of refactoring an app to operate in a public cloud (particularly hyperscale) environment against the long-term cost of maintaining it. There are complex certifications for programmers to be able to refactor on AWS. When you add this specified knowledge to how difficult it is to anticipate dependencies, refactoring an application for the cloud can quickly become a nightmare.

The COVID-19 pandemic also caused many organizations to try and force cloud migration on workloads not designed for the public cloud. They quickly realized refactoring was required and didn’t get the results they were expecting. According to McKinsey, approximately $100 billion is expected to be spent on wasted migration over the next three years.

When infrastructure is subordinate to the application’s needs, hybrid cloud environments offer some advantages. First, these environments can be deployable and scaled quickly to meet the organization’s needs. Also, the management tools that are used in the hybrid cloud environments are the same as those used on-premises. This has the added benefit of keeping the skills gap small. These solutions allow organizations to upgrade or replace applications at their own pace while enabling the Opex versus Capex model.

Decreased Cost of CloudOps

Hybrid clouds allow you to scale critical applications during times of high demand without incurring the high costs associated with overprovisioning your data centers. Because you have all the benefits of an on-prem data center, a public cloud, and a private cloud, you can configure applications that normally run on-prem or in a private cloud to run in the public cloud during peak seasons.

This is especially useful for industries and organizations that experience frequent fluctuations in demand for data and application services. Financial companies might experience excess demand at the end of financial quarters or during tax season. Retailers might experience fluctuations during the holidays. Hybrid cloud infrastructures allow these companies to manage fluctuations better and maintain a high degree of customer satisfaction while managing cloud operation costs.

Public cloud services have made computing resources more accessible at scale for businesses, especially through alternative cloud providers. Organizations can now scale their operations as needed to avoid capital expenditure, management requirements, and technical overhead that arise when building or expanding on-prem data centers.

Improved Disaster Recovery

Disaster recovery in hybrid cloud environments combines the best of public and private cloud disaster recovery approaches. Because you’re not relying on one space for your disaster recovery, it gives you more flexibility and the opportunity to save on costs. Even if this approach comes with its challenges, the benefits outweigh the drawbacks.

Hybrid cloud infrastructures simply offer a more robust solution that favors data integrity. Because your backups can live both on and off-premises, you automatically have a contingency plan in the event one of the backups is compromised. This accomplishes redundancy that accelerates the recovery process without sacrificing accuracy.

Hybrid cloud infrastructures are typically better suited for disaster recovery compliance than a public cloud-only solution. Sensitive data hosted solely on public clouds is more vulnerable to risk, making it more difficult to comply with regulatory requirements. In hybrid cloud environments, businesses can control how and where to replicate and encrypt data, bolstering compliance capabilities.

Lastly, when you have a strong IT operations strategy, you can ideally manage your availability between multiple zones, plus have a background replication to a second cloud provider. Though this is part of a multi-cloud strategy, you can use it with a hybrid cloud strategy to maximize your disaster recovery efforts.

The Cost of Data Sovereignty

With recent privacy regulations and laws, such as the GDPR and CCPA, companies across the globe have had to examine and fortify their data privacy and security. In an on-premises computing environment, data sovereignty is relatively straightforward. However, if you use a cloud computing company located outside of your country, you are not only subject to your country’s data laws, but you are also subject to the other country’s laws and regulations.

You might wonder why you wouldn’t use a local cloud provider to avoid these potential issues. The problem with this is that local cloud providers aren’t always the best performance options. IT teams also need to consider that cloud costs vary depending on the region where they choose to use their cloud provider. Because alternative cloud providers offer a la carte workload options, companies can place their workloads in different regions. However, companies need to balance these cost performance goals with the data sovereignty challenges they face.

Organizations in some industries are also subject to increased data security and privacy regulations, such as the Health Insurance Portability and Accountability Act (HIPAA) and the Payment Card Industry Data Security Standard (PCI DSS). With hybrid cloud solutions, you don’t need to build data centers in every country you operate in. You have the autonomy to choose from alternative cloud providers with the best performance and cost options and integrate their data with localized data solutions. You can use on-premises or private clouds for your local branches for your more sensitive data.

Shifting Capital Expenditures to Operational Expenditures

Adopting a hybrid cloud solution can also create some tax advantages for organizations in the US, Canada, and other jurisdictions. These areas consider purchasing servers for a data center as a capital expenditure. These servers are considered business assets, and the organization has to depreciate them every year. If a business spends $5,000 on a server and expects it to last five years, it would have to depreciate the asset by $1,000 per year for five years to claim the full tax benefit.

On the other hand, purchasing cloud services is considered an operational expense and not subject to depreciation. Your organization can claim the full expense as an income reduction in the same year you incur costs. When you use cloud computing resources, you can claim your tax benefit immediately and reduce your tax liability.

What’s the Difference Between MultiCloud and Hybrid Cloud Environments?

You might be wondering what’s the difference between multicloud and hybrid cloud environments. For clarity, you don’t need to consider these infrastructures as separate entities. A hybrid cloud environment refers to a combination of on-prem, private cloud, and public cloud data storage and computing solutions. A multicloud environment refers to multiple public cloud providers that handle separate workloads for companies.

In a multicloud environment, you can add alternative cloud providers with more specialized offerings on top of your hyperscale cloud provider. When you have multiple public clouds, you achieve a multicloud infrastructure. When you have a combination of on-prem, private, and public cloud solutions, you achieve a hybrid cloud solution. Multicloud environments and hybrid cloud infrastructures can also work in tandem.

OVHcloud — Your Hybrid Cloud Provider

There is no one-size-fits-all approach to cloud migration, and it’s important to understand that you should take time to deliberate the best strategy for your company. However, hybrid clouds are attractive solutions for companies looking to reduce cloud migration costs, gain data sovereignty, and optimize workloads.

Having on-premises, private, and public clouds can ensure you avoid vendor lock-in and maximize the benefits of each cloud provider’s offerings. It also lets you host less critical aspects of your infrastructure on-premises. Simplifying these aspects of your infrastructure, such as disaster recovery, and accessing solutions within minutes, such as bare metal servers, ensures your IT teams stay agile and efficient.

Contact OVHcloud today to learn more about what a hybrid cloud solution can do for your business.