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How Does IaaS Compare to On Premise?

Infrastructure as a Service (IaaS) has become increasingly common in the Australian business community, but many managers remain sceptical as to the value of a hosted solution over traditional On Premise options. Over the Wire’s hosted services expert Sean Bofinger takes us through some of the major differences between these solutions. For detailed information about how much these differences cost, the video below runs through a price comparison between IaaS and On Premise for a typical 50 person organisation.

Hardware

On Premise

For many organisations, the hardware procurement cycle arrives every three years. Either purchased upfront or financed for a set term, evolving business trends often mean that hardware becomes obsolete very quickly. The risk for an On Premise Solution is that requirements arising between upgrade cycles will be ignored (resulting in a loss of productive capacity) or alternatively be expensive to implement. However, there is some good news, large infrastructure deployments can benefit from economies of scale in the hardware purchase.

IaaS

Hosted services have the advantage of being able to leverage dedicated infrastructure that is in a continuous state of upgrade. Service providers with high SLA's must ensure that the hardware is providing the best performance, and hence the supporting infrastructure is frequently upgraded. Due to the nature of the solution, these upgrades are seamless, meaning customers can benefit from the improved performance without costly disruptions.

Software

On Premise

Much like hardware, software upgrades usually have an associated cost incurred. In many cases the software purchase costs will exceed the hardware costs, with any associated annual or recurring licensing requirements adding to the overall expenditure. Further complications can be added via any increases in staff or endpoint numbers and the additional licenses these require. This can be particularly problematic if numbers are added on a temporary basis.

IaaS

On an IaaS platform, customers can leverage the flexible Service Provider Licensing Agreement (SPLA) available from software vendors. This allows for flexible monthly licensing options provided on a per-user basis, or node cost per month. In addition to being able to add or remove licenses as needed, the licensing arrangement entitles the customer to the latest version upon release, ensuring that the environment can be kept at the forefront of technology.

Support

On Premise

The increasing complexity of servers, storage, and software requires that the customer invest in a highly skilled internal support team. This team requires ongoing training, and may leave the company vulnerable to staff unavailability. Alternatively, IT companies may offer customers the required support arrangements for On Premise solutions.

IaaS

Like an On Premise solution, IaaS providers may offer support agreements to clients, however due to the difficulties of providing onsite support, this will typically come at a much lower cost than the maintenance for an On Premise solution.

Access

On Premise

The provision of physical servers on premise creates a dependency on the availability of that site. In the event of a localised network or environmental outage, access to the infrastructure can be adversely impacted. Remote sites dependent on that location may be cut off, or experience limited access. The implementation of multiple redundant paths and supporting infrastructure as well as the increased bandwidth needed to support remote sites creates additional costs that are not often accounted for. If reliability is not a principle concern however, redundancy can be foregone for additional cost savings.

IaaS

Most IaaS solutions are located within dedicated data centres with multiple levels of network and environmental redundancy far exceeding the capabilities of On Premise server rooms. The costs of this infrastructure are accounted for in the monthly costs, and ensure that a greater level of uptime is achievable. In addition, with all sites connecting to this centralised location and the extremely low likelihood of a site outage, the overall potential availability for all sites is far greater than an on premise deployment.

Performance

On Premise

Whilst performance for both solutions is comparable, it is dependent on who and how the solution was configured. Some existing deployments may not have been deployed to best practice or have unspecified hardware. In addition, scalability is limited to the capabilities of the initial purchase whereby additional virtual servers will require additional supporting hardware. When considering an On Premise solution businesses should ensure that their provider will take these constraints into account offering a customised solution which best suits their requirements.

IaaS

Ensuring that the IaaS platform is capable of supporting a customer’s requirements is the responsibility of the IaaS provider. This may require the ongoing procurement of hardware and software to meet a client’s changing requirements. Qualified and experienced technical engineers typically manage the deployment and support of the IaaS platform, to ensure that all systems are configured and supported to industry standards.

Security

On Premise

In terms of data sovereignty, an On Premise solution provides the greatest security for a business as complete control of the data is provided. However, both network and physical security are likely to be more vulnerable than a hosted solution. Customer personnel may have direct physical access to the infrastructure creating a potential security risk. Additionally, network access may be incorrectly configured leading to both internal and external access.

IaaS

Provisioned in highly secure data centres and controlled with strict access policies and procedures, IaaS solutions provide the highest level of access security. As data sovereignty is often a concern, clients should always check to ensure that their provider’s data centers are based in Australia, as this means that the same level of data control as an on premise solution applies, requiring legal notification of data access.

With the current software solutions in place, access between customer data is restricted to IaaS administration processes only and customers are securely segmented from one another.

Scalability

On Premise

The types of technology chosen for compute, storage, and software assignment bind the scalability of an On Premise solution. Moreover, additional increases in infrastructure capacity may require software purchases to be made up front. The capabilities for short-term capacity increase can be difficult or impossible to achieve without capital expenditure.

IaaS

By leveraging far higher performance technologies than the average On Premise deployment, IaaS platforms can more easily meet a business’s changing requirements. Software can easily be assigned in an “as needed” basis and any temporary infrastructure requirements can be easily and cost effectively supplied on a per month basis. This avoids the need for large capital expenditure should business’ requirements change. This becomes particularly useful should business’ requirements lessen as the extraneous infrastructure and licensing can be removed, thereby reducing monthly expenditure.

Power and Cooling

On Premise

Power requirements are one of the most overlooked aspects of any On Premise infrastructure deployment. A small 2-node virtual server environment with a shared storage solution can account for as much as $6,600.00 per year. However, environments with a significantly larger deployments including backup devices, network devices to support workstations and VoIP handsets, legacy servers, and other infrastructure devices may equate to as much as $18,000.00 in power costs per year (based on 9.4kW/h at $0.20 per kW). In addition, the majority of on premise server rooms have minimal Uninterruptable Power Supply (UPS) capabilities, often with only a few minutes of reserve power, and no access to backup generators, leaving a very small window in which problems can be rectified.

Much like power, the cooling required for server infrastructure is often greatly underestimated. A small server room with a 2.0kW A/C unit running continuously will cost around $300.00 per month, whilst a larger server room requiring a 5.0kW A/C unit will cost around $725.00 per month.

IaaS

The power usage costs associated with cooling are accounted for in the monthly IaaS services charges. Due to the efficient nature of a data centre’s cooling capabilities and large number of devices being cooled, the cost per device is much less than that of an On Premise solution. Consequently, this allows the IaaS provider to offer a more effective environmental solution than would otherwise be possible.

Like cooling, the power usage costs associated with infrastructure are accounted for in the monthly IaaS services charges. Utilising an IaaS provider will typically give you access to power redundancy. However, businesses should confirm that the following features are offered: A+B power feeds, UPS, on site generators, and redundancy for all of the above.

Backup

On Premise

Data Protection is paramount to ensuring that your business captures and maintains its critical business data. However, the ongoing management and preventative maintenance of backup systems can be challenging for in house support teams and is often overlooked, in light of more pressing matters.

IaaS

Most IaaS platforms provide clients with the option for a managed infrastructure solution that includes backup processes. Where archives are required businesses should confirm that long-term backup storage can be arranged.

Redundancy

On Premise

For On Premise deployments, a significant investment must be made to provide redundancy across compute, storage, and networking devices.

IaaS

Redundancy is a key aspect of any IaaS solution. Every IaaS Service provider must ensure that its services are able to recover from an unexpected outage as well as providing a seamless migration approach whilst undergoing scheduled maintenance. Businesses should check with their IaaS provider to ensure that their infrastructure is configured to their requirements.

Data Recovery

On Premise

Location, performance, and core services must be considered when implementing a Disaster Recovery (DR) solution, as each of these aspects has a corresponding cost. Moreover, adding additional business services will require detailed planning, a higher level of technical support, and additional implementation costs.

To achieve the organisation’s required Recovery Point Objectives (RPOs) and Recovery Time Objectives (RTOs), the cost in implementing the DR solution may be significant. DR solutions can easily account for the same amount as the production environment cost.

IaaS

IaaS offers more cost effective DR solutions due to the higher performing networking infrastructure deployed within the provider’s solutions. With infrastructure deployed in a highly reliable environment and with high capacity networks between each site, an IaaS solution can be tailored to meet RPO and RTO requirements in a far most cost effective manner.

Cost

On Premise

On Premise solutions generally primarily consist of capital expenditures, with organisations required to make a significant upfront investment to procure hardware, software, and implementation expertise. Such investments can be outside the reach of some SME’s and in any case must be depreciated over several years.

In addition, the ongoing support of these solutions must be considered, whether it is delivered via internal staff or a managed service provider. When combined with the monthly costs incurred from power and cooling the ongoing monthly costs can be significantly higher than a comparable IaaS solution over the useful life of the hardware.

IaaS

With a set per month cost for both infrastructure and software licensing, businesses can easily plan their IT expenditure each year. A bonus of this system is that expenditure can be written off immediately, rather than depreciated. Ongoing upgrade costs are limited to the engineering time required to implement the new software, while the drawbacks regarding warranties, support, and performance are removed.