WhitePages explored using the cloud for data backup, but after extensively evaluating eight vendors, the company determined it would be much too expensive -- as much as three to four times what it would cost to keep it internal, Alvarez says. So the company opted to handle long-term data storage internally, on its private cloud.
In general, though, using public cloud services for purposes other than storage eliminates the need to deploy and maintain the applications internally. The company has been using public cloud services for about two years and now uses 11 different cloud-based applications from service providers including Salesforce.com, SuccessFactors, ADP, WebEx and Yammer. This has led to cost savings that greatly outweigh any of the unexpected costs, Alvarez says.
Integrating apps from multiple vendors
Pacific Coast Building Products, a Rancho Cordova, Calif., provider of building products, wants to start using cloud computing in a big way, and has evaluated cloud services from several providers. But the company has limited its cloud usage so far because the economics are not quite there yet, says Mike O'Dell, CIO.
One of the reasons for this is the difficulty of integrating software applications from disparate vendors on the cloud, and the fact that providing this integration on its own would drive up the cost of cloud computing for Pacific Coast.
For example, the company uses Microsoft Exchange for email and Cisco's Unity Unified Messaging for voicemail, and is interested in using both of these applications as cloud services. "Integration between [these applications] in the cloud, at least the last time we looked, wasn't there," O'Dell says.
Without the integration, users wouldn't be able to leverage some of the capabilities they have now, such as automatic deletion of voicemail messages on their phones when they receive the messages via email.
The same sorts of integration challenges exist with other applications that are larger and more complex, such as ERP, O'Dell says.
"On the SAP side, for us to put that in the cloud means we have to give up features or spend a lot of money on integration," O'Dell says. "Maybe it's just a matter of immature technology, but the integration side is where the hidden costs are. If you don't look at this right out of the gate, you might not be as happy with the economics at the end as you thought you would be."
Not every application is ready for the cloud, and that can result in added costs for cloud users.
"We bumped into some expense that we did not expect for testing and debugging a vendor app that had not been run in a cloud configuration before," says Bill Thirsk, vice president of IT and CIO at Marist College in Poughkeepsie, N.Y.
The college was moving a large-scale ERP system onto a private cloud, using servers that were not yet approved by the vendor. Marist uses its private cloud to provide online services such as registration and billing inquiries and payments to students, faculty and research organizations.
All told, Thirsk says, "99 percent" of the college's ERP migration activities "went very smoothly, and overall we saved hundreds of thousands of dollars by using a cloud configuration." But, he explains, "stabilizing the system within a cloud that already supported 900 virtualized servers gave us quite a challenge."
The added expense was to "untangle the maze of what versions [of] the operating systems and databases would work," Thirsk says. "It was [a] matter of changing some code. It took some time and effort to figure out exactly what lines needed to be changed."