Why a Migration to the Cloud Makes Sense in Times Like These.
By David Mulhall
There is extraordinarily little question that COVID has created a once in a lifetime business challenge for the hospitality industry. Nothing quite compares to the financial challenges that the virus has created. We have seen other significant events impact the industry but nothing quite like this. The attack on September 11, 2001, the real estate and banking crash of 2008, had meaningful impacts on the industry but the effects in many of our markets were fairly short lived. The reaction to these events by the industry were remarkably similar to the reaction to the virus and we can learn from this. The past does help predict the future.
What Have We Experienced in the Past?
In times of trouble the industry immediately reacts by significantly reducing costs and expenditures. This is an understandable reaction and is done for survival. The result of these decisions as it relates to technology expenditures can however create new challenges. The fact is that many in the industry effectively “stretch” their existing technology platforms well beyond what is prudent and practical. System upgrades, migrations, and new deployments get delayed or cancelled altogether.
Unfortunately, this approach introduces considerable new and unintended risks. Legacy hardware replacement cycles get delayed well beyond industry norms. Meanwhile the physical nature of this hardware does not change. Age introduces risk. Operating systems, databases, and other applications become obsolete or go “end of support”. We have all experienced this before. Again, this introduces risk. These risks create the potential for business interruption, and this business interruption could have a significant impact on your guest experience one day.
How Do We Mitigate the Risks that Result from “The Stretch”?
Get out of the hardware and software business. It is not your core competency. Free yourself from this costly and burdensome necessity. You can achieve the same result and mitigate the risks with a Private Cloud.
In a Private Cloud, processing and applications are provided as a service. The application layer known as Platform as a Service (PaaS) allows your technology platforms to remain current without the need for costly upgrade cycles that have been the norm in the past. The days where you need to invest huge dollars to build your hotels data center infrastructure are gone as a result. Pay for what you use has become the new paradigm in computing.
In a properly configured Private Cloud (as opposed to a Public one) you will have complete control over your configuration, security and data. This is extremely important in case you want to make changes to the configuration or move your data. Control of your data is an important consideration when considering Private versus Public Cloud.
Data egress is also an important consideration. Many Cloud providers will charge their customers for data egress based upon usage. This introduces a great potential for unpredictable billing. Costs can fluctuate in this model based upon business volume. It is far wiser to select a provider that provides unlimited data egress. Costs are predictable and do not change.
A brief discussion on the benefits of a Private Cloud versus Public Cloud
• Public Clouds are intended for the masses, which means these providers offer standardized tools and processes. In other words, you can’t customized to your specific needs if required. Your organization will likely need to change its processes to work around the standardized set of tools.
• Security –One can’t say whether public clouds are more secure or less secure than private clouds, as that depends on what each provider has implemented. Microsoft will usually have great security when compared to some of the independent cloud providers. So while you might argue that a public cloud is more secure than private cloud, you can’t argue that public clouds offer better control over security.
• Regulatory and Compliance –Public clouds are available almost anywhere in the world, but the data usually isn’t stored locally. A private cloud would give your company direct control over where your data, such as sales records and client information, is stored and who has access to it, making regulatory and compliance regulations easier to manage.
• Cost Effective Scaling –Both cloud type are easily scalable, however with public clouds, costs usually grow more rapidly as one scales up. The cost of scaling, either up or down, is perhaps one of the main reasons a business might want to consider a private cloud.
• Hybrid Cloud –Most organizations are going to utilize a hybrid cloud model over time. Companies that have a private cloud always have the ability to connect to a public cloud for various third party services (Salesforce, QuickBooks, etc.). This allows one to choose a public cloud service that interoperates with their private cloud “stack.”
Take Advantage of the Latest Cloud Technologies for Pennies on the Dollar
With the right cloud partner the costs are shared amongst all tenants on the platform. This allows reduced capital expenditures, lower operating costs and ease of business scalability. Software upgrades and unlimited support are included as well as data back-ups with low cost disaster recovery options.
In conclusion, while COVID has introduced unintended risks to your business these risks can be mitigated with the right cloud strategy.