The cloud era has paved the way for companies to have greater flexibility than ever before in how they consume and deliver technology services. You can choose purchase, lease or consumption-based models and you can also mix and match these options based on your business models and the needs of specific departments, workloads or applications.
By the end of 2021, 75% of enterprises will recognize the benefits of “as-a-service” consumption, driving a three times increase in demand for on-premises infrastructure delivered via as-a-service solutions, according to research by IDC. This is a logical evolution for many companies when you consider that half of organizations don’t have production applications in the cloud and, even among cloud adopters, 39% of apps are in a private cloud, per IDC.
In evaluating the best way to acquire multi-cloud flexiblity, there are a number of factors to consider. One of the most important is the scope, scale and pace of your digital transformation efforts. This article examines five critical factors business leaders should consider in determining which models work best for you, and for which use cases.
Factor 1: Changing demands
If the organization is undergoing significant change, it will likely be difficult for IT and business leaders to pinpoint demand for compute, storage or network infrastructure in the future. This kind of environment requires an agile infrastructure that can respond quickly to changes in market conditions. A consumption-based pricing model offers advantages in access to elastic scalability and makes it easier to focus resources on business-specific applications rather than managing infrastructure. The model is also compatible with cloud migration, speed to market, agile IT and accelerated deployments. According to a study by Forbes Insights, 62% of companies that chose consumption-based models achieved revenue growth greater than 5% over a recent three-year period.
Factor No. 2: Business resilience
Business leaders are placing a huge emphasis on resilience at a time when operations, supply chains and workplaces continue to be disrupted by unexpected events, such as a global pandemic and severe weather, as noted in a study by Deloitte on “Building the Resilient Organization.” Purchase and lease acquisition models offer stability that many IT professionals are accustomed to having. However, consumption-based IT is equally resilient when you choose a trusted vendor, and users can rely on digital services they need to always be available, similar to the expectations they would have for an electric utility or telecommunications service.
Factor No. 3: Capacity and usage management
Time to deploy resources is an important consideration. Lag time from when an organization realizes it will need infrastructure to when it is available can have a negative impact on business outcomes. This issue is especially problematic when there are constantly changing business needs that force DevOps and development teams to respond quickly to new opportunities. Consumption-based pricing models have a huge advantage because procurement cycles are much shorter than traditional purchase or lease processes. New deployments can be finished in weeks instead of months, and expansion of existing infrastructure can be done in days instead of weeks.
Factor No. 4: Storage and security
Factors to consider: How and where your data needs to be stored; where, how, and how quickly it needs to be accessed (and by whom); how data moves within your organization and across your supply chains and ecosystems; what the compliance and security requirements are, and what kind of governance is needed. For most organizations, limitations on data in the cloud mean on-premises infrastructure is still needed—but that doesn’t mean you have to use purchase or lease models. With a consumption-based model you leverage the most current security technologies and threat intelligence and have access to professional services teams that have experience and expertise in cybersecurity, regulatory compliance and governance. Per Forbes Insights, 81% of organizations using consumption-based solutions are satisfied with application and data security performance, versus only 69% of customers that use a purchase model; 79% of consumption users said they are satisfied with the ability to discover and locate timely data, versus 67% of purchase customers.
Factor No. 5: Costs
Many organizations with on-premises storage needs are adopting an Opex model that is more flexible and based on what you are actually using. With this model, IT services are provided by in-house departments and typically offer cloud-like pricing models and usage metering. This model eliminates some of the typical cost challenges of purchase and lease models, particularly capacity planning, over-provisioning, under-provisioning and long procurement cycles. In terms of usage costs, 79% of consumption-based customers said they were satisfied, versus 67% of purchase customers; and 77% said they were satisfied with ease of access, vs 65% of purchase customers according to Forbes Insights.
Taking the next step
As noted by IDC, workload portability should be considered “the new norm” and companies should deploy solutions based on their business needs. “More than ever,” IDC notes, “companies are moving workloads of all types from one cloud platform to another, and sometimes back again to a different one. Flexible consumption models and modern infrastructure enable a successful hybrid cloud strategy across public and private clouds and the edge.”
To meet this demand for greater flexibility, Dell Technologies APEX Cloud Services aligns payment with usage and shifts responsibility of monitoring, maintenance and support from the customer to Dell Technologies and its colocation partners. Through on-premises deployment models, organizations can take advantage of optimal application performance while meeting their most stringent requirements for business resilience, security, regulatory compliance and governance.
For more information on how Dell Technologies can help your organization simplify and accelerate digital transformation through flexible consumption-based IT solutions, please visit Dell Technologies.
Disclaimer: Based on a Forbes study commissioned by Dell Technologies and Intel, “Delivering On Demand: Momentum Builds Toward Flexible IT” March 2021. Full report: [https://www.delltechnologies.com/resources/en-us/asset/analyst-reports/solutions/forbes-insights-delivering-on-demand.pdf]
Disclaimer: Based on an IDC InfoBrief commissioned by Dell Technologies “The Best of Both Clouds: Embracing a True Hybrid Cloud Strategy” August 2021. Actual results may vary. Full Report: https://idcdocserv.com/US47999221