Not all clouds are formed the same

Not too long ago, the idea of hosting both information and business processes outside a credit union’s own digital walls was a showstopper. Questions about security, information control and overall early adoption fears typically nixed most attempts at launching a cloud project.

That has all changed. Most cloud concerns have entirely vanished. Credit unions of all sizes have researched the pros and cons of hosting information on site or in the cloud, and today, everyone seems ready for the conversation. Many are even demanding it.

There is another discussion decision makers need to have before they dive into the cloud, however. Should the organization choose privately managed cloud hosting services or more traditional commoditized hosting?

What’s the difference?

The concept of “the cloud” is familiar territory for most financial services organizations. They know that the cloud is simply defined as Software as a Service hosted through the internet, usually accessible through an online portal, rather than on a local server or computer.

What often comes as a surprise is the variation in cloud services. Most of these different clouds fall into one of two buckets: commodity or privately managed.

Consumers tend to know commodity clouds, sometimes called “big box” clouds, like Amazon Web Services (AWS) or Microsoft Azure. They lead on low cost, typically – a positive that can sometimes be a negative. It’s their big differentiator.

Privately managed cloud providers hang their hat on purpose-built platforms for business critical functions. That service can cost more, of course. For some budget conscious credit unions (and what organization isn’t budget conscious?), that can be a project challenge as well.

Which cloud do I choose?

Commodity or privately managed is a choice each credit union has to make on its own, based on the best information available. To help, consider these factors when evaluating…

  • Architecture
    • Commodity: Commodity architecture is designed to be flexible and generic enough to host any type of IT application.
    • Privately managed: Privately managed cloud architecture, like the purpose-built Hyland Cloud, is specially designed and optimized to host the vendor’s services and applications.
  • Storage
    • Commodity: Commodity cloud storage is available at relatively inexpensive prices for initial storage, but there are often extra charges each time a customer accesses the information. Commodity vendors often do not fully address backup methodology and disaster recovery management.
    • Privately managed: Storage is often designed specifically for vendor content with real-time replication to a primary production data center for high availability and replication to a secondary data center for rapid disaster recovery.
  • Servers
    • Commodity: The customer dictates and manages their server needs, including determining how many servers they need, their roles, patching and security, and how they interface with each other.
    • Privately managed: The privately managed vendor should provide the best-fit server and role configurations for the customer’s solution. Privately managed-cloud vendor engineers should transparently manage all servers, removing the need for user involvement.
  • Disaster recovery
    • Commodity: Commodity clouds provide basic disaster recovery focused on database and disk recovery — not application specific recovery. All of these elements typically come at an additional cost to the customer.
    • Privately managed: Vendors should provide a much more comprehensive plan. For example, all solutions deployed in the Hyland Cloud benefit from a disaster recovery implementation that is tailored to the Hyland application at no additional charge to the customer.

Support and customer service is another factor to consider. Maybe the biggest.

In other words, the people behind the privately managed cloud — the platform experts — are the key differentiator. For the credit union, this means needing less technical resources to monitor, upgrade, patch, procure, troubleshoot and manage the infrastructure for software solutions.

At the same time, credit unions gain a team dedicated to security, availability and disaster recovery. At a time when IS staffing is lean and IT departments are being asked to do more with less, this is a huge benefit for any team.

Now you have to ask yourself, which cloud is right for you?

Steve Comer

Steve Comer

Steve Comer, Director of the Financial Services industry at Hyland Software. For the past 13+ years, Steve has been dedicated to helping the financial services industry transform their business through ... Web: Details