HomeKnow-HowWhich is better? Traditional IT infrastructure vs. the cloud (Part II)

Which is better? Traditional IT infrastructure vs. the cloud (Part II)

In the first part of this article I started off by explaining the implications of a traditional IT infrastructure within the context of the business environment. In this second part, I’ll break down the different components of a cloud environment and list some advantages and disadvantages associated with adopting cloud solutions. By the end of the article, you should have a pretty good understanding of how a traditional in-house setup compares to an outsourced cloud model.

The cloud

The cloud is data centres (servers, or computer hardware) that are managed by private providers, but shared by remote users that access specialized data, programmes and different computer platforms that are specific to their needs. Sound familiar? For all its recent buzz, the cloud is not something new. In typical historic fashion, the cloud is a reiteration of the past. Decades ago companies purchased mainframes, which hosted computer resources that were accessed through end-user terminals internally.

Cloud components

SaaS – Software as a Service

SaaS is one of the most popular cloud services. SaaS is software and data that reside in the cloud. It is specific to the context of business applications. This includes a very powerful type of applications traditionally located and managed locally. Examples of this are Google Doc’s or Zoho CRM.

PaaS – Platform as a Service & IaaS – Infrastructure as a Service

PaaS is a web-based platform used to facilitate the deployment of applications and develop tools that are specific to a company’s objectives. PaaS is specific to the context of providing services and delivering web applications entirely over the internet. PaaS providers inevitably provide the infrastructure as well, as IaaS. Examples of PaaS and IaaS are Amazon’s EC2, Amazon being the provider of the infrastructure, and EC2 as the web development layer on top.

Cloud services

Since each cloud provider is managed by their respective IT staff, the burden of internal hardware and software maintenance is outsourced to the cloud providers themselves. This means less stress on an organization’s IT staff, as well as the budget for financial costs related to normal business operations. Cloud providers are in business to enable organizations to focus on their business objectives by alleviating the internal technological and financial demands from IT and accounting. The by-product is fewer resources required for maintenance and, thus, more resources become available for innovation.

Advantages of cloud services i.e. SaaS, IaaS & PaaS
  • Reduced Cost
    • Companies bypass the need to upgrade hardware and software every one to three years. Cloud technology is paid incrementally, typically on a subscription base fee (for SaaS) or pay-what-you-use model (for PaaS & IaaS).
  • Increased Storage
    • A company no longer has to worry about data storage capacity since it is outsourced to the data centers.
  • Highly Automated
    • IT personnel no longer need to worry about keeping hardware, software and data backups up-to-date. Bookkeeping stays consistent since fees are subscription-based, or are incremental with the pay-as-you-go model, which is easy to budget for the year.
  • Flexibility
    • The data centers are built with the ability to increase or decrease your access to necessary resources depending on network usage, which means, a company does not suffer from crashes or downtime since the cloud provider offers scalability on the fly. Businesses only pay for what they use. SaaS provides a granular approach to software implementation/adoption, which puts the organization in better control of what features they choose to spend money on. It allows an organization to scale their software demands organically.
  • Increased Mobility
    • Employees can access and edit company-specific data including email, financials, and other documents on or off-site seamlessly in real-time.
    • No special device or virtual portal required; only a smart phone or laptop is needed.
    • Decreases overhead costs since employees can work remotely.
    • An organization can hire talent from all over the world and not just what is available locally.
  • Allows IT to Shift Focus
    • IT department no longer has to worry about constant server updates and other computing issues; they will be free to concentrate on innovation.
    • Requires fewer IT staff so there is more money to spend towards moving the business forward.

Challenges and Countermeasures

Data security (privacy and trust issues)
  • Ensure clear understanding of the security practiced at the different cloud service providers and what their SLA’s state.
  • Find ability to audit physical site and resources.
  • Investigate different cloud security software i.e. CloudPassage.
Quality of Service of different cloud services
  • This concern is no different when adopting any type of service, new or old. Proper due diligence is expected.
Cloud interoperability and provider sustainability
  • Understanding the portability of virtual appliances across different cloud providers.
  • Ensure there are DR (Disaster Recovery) options.


A traditional IT infrastructure, while recommended in a number of contexts, limits the ability of a business to be competitive, due to high costs associated with maintenance and upgrades. A modern IT infrastructure is a high-level approach for the next generation of IT service models that are being adopted internationally, which includes many government organizations. It is an approach to IT that promises cost savings, agility and scalability. This is especially important for start-ups that require bootstrapping until they receive funding.

Have any of you had experience with a transition to a cloud-based model? Are your organizations rejecting or embracing it? I would love to hear any thoughts or questions you might have.

By the way: If you’d like to stay up-to-date regarding startup news and interesting opportunities, make sure to subscribe to our free weekly EU-Startups Newsletter.

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Tony Fernandez
Tony Fernandezhttp://www.tonyfer.com
Tony Fernandez is a keen follower of the start-up community ever since he went to school in the Silicon Valley. Since moving to Madrid in August 2011 he has been active in the Spanish start-up scene. Check him out at tonyfer.com or find him on twitter @afgeneralist.

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