Should you choose a local or international cloud provider?

Which type of cloud service is better suited to a New Zealand business?

A private cloud service hosted on a local data centre and generally accessed via the customer’s own wide area network (WAN), a local public cloud facility or a public cloud service hosted by one of the international behemoths such as Amazon, Microsoft or Google and accessed solely via the internet?

Or what about a hybrid approach?

Support and relationships are one important factor when choosing between local and international solutions, or onshore or offshore web hosting.

Appserv managing director Graham Clarke says his company can’t compete with the likes of Amazon Web Services on price. But he says it can get closer to the customer and provide them with neutral advice across a range of services (for its part, Amazon Web Services or AWS has a number of local reps, including Fronde and Datacom – although Datacom tells NBR it is agnostic, recommending onshore or offshore services, or a mix, depending on a client’s situation).

Appserv maintains its own data centre in Auckland’s Freemans Bay. As well as customer relationships, Mr Clarke sees qualms over data sovereignty as another strong draw for local providers

Another issue is speed. The Southern Cross Cable (New Zealand’s only major broadband connection with the outside world) has scads of free bandwidth but not all providers are willing to stump up for the fastest connection options. And, to a degree, geography is destiny where the internet’s concerned; there is always a small degree of latency, or lag, inherent to international connections (Vocus, another of Amazon Web Services’ local agents, is touting its dedicated bandwidth on the Auckland-Sydney leg of the Southern Cross Cable). Mr Clarke says local broadband is cheaper and faster. That’s important for everyone but especially some of his corporate customers on 1Gibit/s or 10Gibit/s network links. For them, every millisecond counts.

Horses for courses
Telecom’s Gen-i services division takes a more catholic approach, offering both local and international cloud options.

Gen-i networked ICT products marketing manager David Reiss neatly summarises key benefits of moving to cloud as including business agility, or the ability to scale usage and services up and down according to business needs as they grow and shrink; and flexibility – being able to choose and only pay for what you use, when you need it, rather than tying up capital in IT.

“This allows customers to focus on their core business functions and business continuity,” Mr Reiss says.

But while Gen-i is a cloud booster, it’s not prescriptive about a single, “right” way to move computing online.

As well as building its own cloud solutions, Gen-i partners public cloud providers (typically based in Singapore or the US) such as Salesforce.com and Microsoft.

Mr Reiss says to help people assess the best cloud option for their organisation, Gen-i has come up with a four step process called Pathway to the Cloud.

Issues to be considered are resilience, ease of management, data sovereignty, performance consistency and return on investment and not all parts of the business will be suitable, says Mr Reiss.

He says when deciding what to put in the cloud, people need to consider the IT infrastructure – security, backup and software services such as Microsoft Office 365, Xero, Google apps or line-of-business applications such as CRM (customer relationship management), point-of-sale, or business function applications such as voice, email, messaging or video.

Gen-i’s private cloud solutions include collaboration, video, mobility, Revera cloud infrastructure services, GMS and its public offering covers professional services, Salesforce.com, Microsoft Office 365, mobility, broadband and internet services.

Sister company Revera, which Telecom acquired in May for $100 million provides local IT infrastructure and hosting.

Mr Reiss says the international players can’t be beaten in some areas.

“Microsoft, Google and Amazon spend billions investing in their platforms and you’re never going to get anyone in New Zealand to provide that. Global providers are never really going to exist in New Zealand,” he says.

“Obviously there’s a real economy of scale with public cloud solutions. Their ability to consolidate and virtualise is massive. They can invest in things like automation tools. I signed up for Microsoft Office 365 three weeks ago and jumped on my Windows 8 machine and was up and running within 15 minutes of putting my credit card number online.”

Mr Reiss says because customers access cloud services via the internet they can work from anywhere and run a range of devices but a drawback for New Zealand international public cloud customers includes running a risk with performance consistency.

“Performance is not bad but not able to be guaranteed. A lot will come down to how well the application has been written to work across networks in New Zealand or up to Singapore where a lot of them are hosted. Ironically, services hosted in the US seem to run better.”

Mr Reiss says setup costs can bite when you move to an international provider, or switch between international providers.

“Often you’re buying a product or service for x dollars per month and that covers the cost of a raw service, not including migration to that service. You might need to move terabytes of data to their cloud and if you’re going to do that over the internet it’s going to take a long time. If you’re using a New Zealand-based service you can send a hard disk and they load that up. So be aware, getting information into the cloud can require specialist support,” he says.

The Gen-i manager also warns it can sometimes be expensive to get data out of an international provider – or at least cost a lot more than getting the data in.

So what’s the right course?

“Most organisations are doing a mixture of on-premise hosted private cloud and public cloud and we expect that to continue for quite a while. It’s about understanding the needs and characteristics of each system,” Mr Weiss says.

Andrea Malcolm is an NBR contributor and former Compterworld chief reporter.