Hybrid cloud environments are a recent trend in software development that are creating interesting opportunities for businesses. A hybrid cloud solution is a mixed computing environment that combines on-premise solutions and cloud-based systems with increased integration between the two platforms.
The fact that multinational software companies with considerable resources at their disposal are lowering the barrier to entry to the cloud while continuing to support on-premise solutions makes now the perfect time for many small and medium-sized companies to ease into cloud-based services.
Why are Software Providers Investing in Hybrid Cloud Solutions Instead of Simply Moving Everything to the Cloud?
Most software companies – especially the big players – do want to deploy their software completely in the cloud and use the cloud for ongoing development. For instance, if you spend any time listening to Satya Nadella, the CEO of Microsoft, 90% of what he talks about are cloud services.
From reorienting Microsoft to focus on cloud services, to leading the charge in innovating cloud solutions through developments like underwater servers, he’s a prime example of the direction the software development world is heading.
However, these same big players also typically have a large install base of mature software products that are on-premise. Dynamics GP is a perfect example in the small-to-medium business (SMB) space. A robust ERP system accounts for a large percentage of the budget for a mid-sized business, which means there are lots of companies that have made significant investments into the Microsoft ecosystems.
For this reason, it makes sense for larger software companies to invest in hybrid solutions and build a strategy that supports and benefits on-premise systems, or they risk alienating their on-premise user base.
What Does That Mean for My Organization?
In general, companies like Microsoft are creating hybrid cloud solutions that deploy functionality and specialized services (microservices) in the cloud while allowing organizations to retain their familiar systems and workflow processes.
The beauty of microservices is that they’ve decoupled them from the workflow. As you outgrow a particular form, you can write a custom form for just one piece, ad hoc, and your workflow process doesn’t have to change that much.
Many times, a piece of gateway software sits on-premise and connects to the cloud, passing the necessary data from the on-premise system to the cloud and vice-versa. This invisible gateway software seamlessly manages data in both directions, pushes data into Power BI or other visualization tools, and automatically triggers workflow processes.
This automatic connection to the cloud means that your organization won’t have to reinvest to transfer processes and data currently housed in existing systems into a cloud equivalent.
Without the connection supported by the on-premise software provider, your company would have to find a cloud-based ERP solution and do a conversion, which puts you at risk of losing data and requires a large investment of both time and money to do well.
The Benefits of Moving to a Hybrid Cloud Environment
In addition to making the transition simpler, the strategies software companies are using to support hybrid cloud environments come with a number of benefits:
When beginning to build a strategy for the hybrid cloud, software companies took a step back to look at on-premise deployment. They found that platforms that originally solved specific problems in their own domains had grown and overlapped as they matured and now needed tighter integration.
For example, a company may have deployed Dynamics GP as their ERP solution, but then added a CRM to the system and a document management solution like SharePoint.
As each system evolved, the company built processes and workflow engines to solve similar problems across each platform. If you look at it, you see that many of the workflows crossover. The sales process ends with putting an order into the ERP system. Document management includes invoicing and so on.
Now, many of the cloud-based services connected to on-premise systems create one workflow engine that integrates all systems and allows users to visualize data across multiple platforms.
Since the big players are putting so many resources into their cloud systems, they iterate on them and add features quickly.
When cloud-services were first rolled out, they were limited and targeted specific processes such as a certain task or a form. Now organizations are investing in cloud-based systems such as LogicApps, PowerApps, and Power BI that still target specific needs but do so in a more mature, integrated way.
This is good news for business. There are incredible business enablement tools available from forms and basic workflow engines to advanced machine learning and big data tools.
This creates an unheard of opportunity for small-to-medium-sized companies to get the best of both worlds and tap into this functionality without having to leave their on-premise systems.
While many organizations worry about giving up control of dealing with latency issues if they move some of their functionality to the cloud, we’re finding the opposite is true. It’s very expensive to manage your own infrastructure, and in reality it’s just as error-prone, if not more so, than cloud-managed services.
As software companies invest more in their cloud-services and create bigger and better data centers, latency continues to drop and is now often better than on-premise infrastructure, especially for companies with a distributed sales force.
For example, a company that initially hosted its own CRM at its main office in Atlanta is going to experience high latency when a Seattle rep connects to the platform. If that same company invests in a cloud-based CRM or moves that function to the cloud in a hybrid environment, the Seattle rep will connect through a nearby data center that’s robust and well-maintained.
SMBs don’t have the kind of security resources that the big software companies have. Microsoft, AWS, and others have enormous buying power to help keep their sites secure.
As many businesses have learned, security is hard – and it’s not necessarily better just because you control it. In fact, security will often take a lower priority compared to mission-critical functionality for the business. If a new workflow process is critical to your business saving or making money, and every day you don’t fix it you lose $10,000, that’s going to take precedence over building up security features.
There’s always going to be intense pressure on IT to deliver new functionality that increases profitability, and it’s always going to be a balancing act between growth and risk. Cloud-managed systems can relieve this pressure and put more resources into security because they spread the cost across millions of users.
The Bottom Line
The deployment of hybrid cloud solutions helps companies carefully transition to the cloud without undergoing a massive migration that endangers their data and disrupts their business operations.
The ultimate story arc of the hybrid cloud is that customers eventually move over, but it becomes a simpler, stepped process rather than a huge, overwhelming production.