Managed Cloud Services: when outsourcing your operations is the most cost-effective choice

Clouds, be they private or public, surprisingly remain one of the most DIY-favouring markets. Perhaps due to the nebulous and increasingly powerful technologies, a series of myths, or even unnecessary egos, the majority of non-tech-centric enterprises (meaning, companies whose primary business scope rests outside the realm of IT software and hardware) still try to build and nurture in-house cloud management teams, without considering outsourcing even part of their workload. Self-management has its advantages, however, thinking it’s the only option is a mistake. Reading this you may think: “managed cloud services are for lazy people, I can do it myself.” And the truth is, you indeed can. But should you? 

Let’s be honest: building a cloud is no easy feat. It is not for beginners, and involves a large series of considerations: is it large enough? Secure enough? Efficient enough? Does it justify the cost? So having made your way through this maze of questions and having finally concluded that you want to move towards a cloud deployment, the last thing you need is another set of considerations for operating it. 

Operations can be a vague term. In the tech/cloud field, it defines the entire range of actions and activities required to keep any cloud infrastructure running consistently, reliably, and efficiently. Briefly, good operations make sure your cloud does what it’s supposed to do most of the time and does not significantly disrupt your business processes when errors happen. While different from cloud to cloud, most operations can be classified into three categories: 

• Monitoring – constant measurements of key metrics against a predefined schema to ensure functionality

• Management – tweaks and changes to the infrastructure, such as upgrades, patches, and scaling, to ensure reliability

• Troubleshooting – a system of protocols and procedures that keeps your workloads safe and ensures minimum data loss when incidents happen

This may sound complicated and complex, and in many ways it is. As an industry rule of thumb, for every 100 nodes of any cloud’s deployment, you will require at least one expert to ensure that proper operations are in place. This is very important because improper operations can cause significant disruption to your entire business, from inaccurate data and processes to major errors in processes and performance. Briefly put, cloud operations cannot be neglected.

Regardless of how big or small or simple or complex your infrastructure is, there is a range of costs that you are likely to incur when it comes to operating your cloud. These can be: 

• Direct – These are costs directly associated with the deployment and operation of your cloud, such as hardware purchases and maintenance, software licences, service subscriptions and more. They are relatively predictable and will allow you to budget quite easily ahead of time, but do allow a margin of +/- 10% when estimating, as the integration of components within the wider infrastructure can sometimes incur additional service costs. 

• Indirect – When it comes to indirect costs, the definition’s boundaries become more blurry. In general, an indirect cost is any cost that, when neglected or denied, significantly reduces the reliability, efficiency, or even mere availability of your cloud. For example, IT headcount is a significant indirect cost: it will cost you money to hire, train, retain, and grow a team of experts to manage your infrastructure, and these costs will only be augmented by the ongoing skill gap the market is currently experiencing. The opportunity costs of having people work on operations rather than innovation can range from negligible to severe, as time-to-market is an essential component for maintaining a competitive edge in any industry. 

Indirect costs are highly unpredictable and involve a significant level of corporate responsibility should you choose to do everything yourself. Suppose you’ve hired your team and trained them: at any point, engineers can leave, or require additional training; sometimes their talent will be needed to sustain other technical feats within your business; and sometimes things can simply go slower than expected. It’s not impossible to navigate these indirect costs. Just note that while this has some advantages – like full independence and more freedom to allocate resources – it has increased risks of financial losses and slower time to market.”

In light of these costs, a general observation (or unwritten market consensus) is that tech-centric companies will likely be able to self-manage their clouds successfully. Non-tech-centric companies are likely to encounter a point where managed cloud services would present a more feasible and competitive opportunity. 

Before discussing when to opt for managed cloud services, let’s take a moment to clarify what they entail. Opting for Managed Cloud Services involves outsourcing your cloud infrastructure operations to an external expert, also known as a Managed Service Provider (MSP). You’ll ideally be able to relinquish all your operational concerns (along with responsibility for the efficiency of your operations) to the MSP, and focus on innovation or whatever else really matters for you. 

There is a pervasive myth that managed cloud services are only a useful option when your company finds itself unable to manage anything by itself, or when you simply don’t have an IT team. Nothing could be further from the truth. There are several situations where choosing a managed cloud service provider can prove both helpful and lucrative: 

Vertical growth – When you want to expand into a new territory, it is unlikely that you will have access to a well-established senior expertise within your IT team. This in turn can be expensive to acquire, and will need plenty of time to adjust to your company’s values and processes. Choosing an MSP to support you and enable you to grow vertically as soon as you want can help you accelerate your time to market and cut talent acquisition costs. 

Re-focus – You probably already have an IT team, and you are probably very happy with it. But when it comes to their bandwidth, you may want to have them focus on sustaining technological innovation for your competitive advantage, rather than spending most of their time keeping the lights on in your cloud infrastructure. A managed cloud service will help offer your team enough headspace to concentrate on your primary business scope. 

Cost predictability – Faced with a new project, it would be wise and appropriate to estimate your costs. But cloud infrastructure, as mentioned above, can incur a lot of unexpected costs, especially when it comes to covering a skill gap and mitigating for lost opportunities. A managed service provider should offer a stable and predictable price (usually per node per year), which can give you full control over your budgets and allow you to allocate resources more efficiently. 

You can find more information on general managed IT services on our managed services webpage.

When venturing into unfamiliar territory, opting for managed services is advisable – especially for non-tech-centric enterprises. Cloud infrastructure operations is a perfect example of such a case: a highly complex and resource-intensive set of processes that is essential to your business success, but detrimental to your costs if improperly self-managed. For any non-tech-centric enterprise looking to enter, expand, or upgrade their open-source cloud infrastructure, Managed Cloud Services are an attractive opportunity that proposes countless advantages and can help you retain (or even augment) your competitive edge. 

Canonical offers a wide range of managed cloud services, and we invite you to explore them by visiting our website and getting in touch.