WHITE PAPER

The What, the Why and

the How of Hybrid Cloud

ON

An Osterman Research White Paper

Published May 2016

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The What, the Why, and the

How of Hybrid Cloud

EXECUTIVE SUMMARY

When we think about the cloud, its natural to focus on public clouds. But public is
not the only type of cloud.
Public clouds use proven technology to pool data center resources and help maximize
their computing potential. These same principles can be used in your data center,
either on your premises or on one that you exclusively rent from someone else, to
create a private cloud. This technology also gives you the flexibility to mix and match;
allowing you to choose where an application is hosted, and to move it later.
This then is the essence of hybrid cloud: With the benefit of cloud technology, you
can move workloads between public and private clouds or choose a combination of
the two.
The shift to hybrid cloud is all-but inevitable, so grasp the opportunity. Its not a
matter of if but of when.

ABOUT THIS WHITE PAPER

In this white paper we discuss what hybrid cloud is, why its inevitable, and how to
take advantage of it. We look at some of the barriers to public-cloud adoption, while
we cut through unnecessary technicalities to get to the heart of the matter. We
also offer a brief overview of the sponsor of this paper and their relevant solutions.

This then is the

essence of hybrid
cloud: With the
benefit of cloud
technology, you
can move
workloads
between public
and private
clouds or
choose a
combination of
the two.

WHAT HYBRID CLOUD IS

CLOUD IS MORE THAN MERE HOSTED SOFTWARE

People often think that the cloud is applications running in someone elses data
center, but theres an important distinction to be made between hosted software-asa-service (SaaS) and cloud.

SaaS is generally focused on an application that runs in a vendors data center.

In other words, its an application hosted elsewhere.

Cloud has a unique set of benefits in addition to SaaS, and is based on a specific
type of architecture. This architecture consists of remote computing resources,
such as virtual servers, storage and the other elements of a computing
environment, which differentiate it from simple hosting or SaaS and ultimately
enables hybrid cloud (for an introduction to cloud technologies, see the section
The How of Hybrid Cloud).

BUSINESS BENEFITS OF CLOUD

How can you tell its a true public cloud, and not just hosting or SaaS? Cloud
technology permits several business benefits; here are our top five:

Elasticity, or on demand
Cloud allows the server horsepower applied to a workload to grow and
shrink as the demand ebbs and flows. If its not elastic, its not cloud!

Zero CapEx
Public cloud minimizes or eliminates up-front costs, such as the capital
expenditure requirements for servers, load balancers, real estate and all of
the other elements of an on-premises data center. Instead, the cloud
provider sweats its capital by charging you on a pay-as-you-go or utility
model.

Low OpEx
Cloud minimizes operating expenditures because of the inherent economies
of scale enabled by the technology.

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The What, the Why, and the

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Secure multi-tenancy
Your workload can run alongside other workloads which may or may not
be associated with your business. Each is completely independent of the
others, with assured security. This ability to securely share infrastructure
with other users is key to reducing cost.

Fast failover
Outages, natural disasters and other disruptive events happen even in the
best IT shop. But cloud can allow workloads to move quickly from a failed
data center to a backup location, ensuring uptime close to 24x7. While not
all cloud services explicitly include failover, customers can usually enable it.
Its typically far more expensive to use on-premises data centers for business
continuity.

SO WHAT MAKES A CLOUD A HYBRID CLOUD?

Its too limiting to think about The Cloud. Were now in the age of interconnected
clouds. There are many public clouds to choose from, such as Amazon Web Services
(AWS), IBM Softlayer, Microsoft Azure, or Google Cloud Platform. You can also build a
private cloud in a data center thats owned or rented by your organization typically
on your premises.
So a hybrid-cloud architecture allows IT to choose where data are located, and where
that data is processed. Not only can you choose whether to use a private or a public
cloud, you can also choose which public cloud to use. And you can revisit those
choices, as situations change for example, moving from public to private; for
example, from Amazon to Softlayer or OpenText.

In a hybrid
cloud, IT will
choose which
cloud resources
to use for a
workload, aiming
to make the best
selection. But
what do we mean
by best?

Be aware there are varying ways to describe public and private in the cloud
industry.i Under one definition, private clouds can also be built and operated by a
cloud service provider in a remote data center, or on your premises.ii This offers
similar on-demand, zero-CapEx benefits to those of public cloud.
So a hybrid cloud uses a mix of public and private cloud resources. But which mix?

FOUR MAIN CLOUD CHOICE CRITERIA

In a hybrid cloud, IT will choose which cloud resources to use for a workload, aiming
to make the best selection. But what do we mean by best?
In brief, hybrid cloud allows IT to optimize for criteria that include:

Total cost of ownership (TCO)

One public cloud service might cost less for certain workloads than another.
And certain large-scale workloads could be less expensive in a private cloud.

Performance
Interactive workloads might not perform so well from a remote data center.
So IT could prefer to host strategic workloads locally in a private cloud, while
placing tactical workloads in a public cloud. (Theres more detail in the
section, The Laws of Physics.)

Scalability
Public clouds tend to be more flexible when workloads grow unexpectedly or
peak temporarily. This is due to the pay-as-you-go model of most cloud
services. The other benefit of this flexible architecture is that OpEx falls with
reduced usage.

Regulation, risk and security

You might need to keep certain workloads in a private data center. This need
could come from external regulation, or from your own risk assessment. But
situations can change, so planning a hybrid-cloud architecture now allows

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The What, the Why, and the

How of Hybrid Cloud

you to move workloads to a public cloud in the future.

(This is just a brief flavor; well discuss these criteria and more in the next
section.)

IN SUMMARY
Think of hybrid cloud as a toolbox: The skill is to know which of the many tools in the
box to use, and when to switch tools or even to use several tools at once.
In the survey we conducted for this white paper, IT managers said
regulation/risk/security is extremely important to inform their decision about siting a
workload. We asked users which of 14 criteria would affect their decision to site an
application in either a private or public cloud, either positively or negatively.
Survey respondents felt strongly that regulation/risk/security would tend to dissuade
them from using a public cloud. But respondents also felt that many of those same
criteria are a positive for choosing private cloud, along with TCO. However, the
respondents were split when asked about other criteria, with no significant trend of
opinion.
Figure 1 shows the top drivers perceived as negative for a public cloud choice.
Concerns around the safety of sensitive and confidential data are the leading
negative drivers away from public cloud, with over half of respondents (56%)
expressing it, while Figure 2 indicates that the majority of organizations (62%)
believe the safety of sensitive and confidential information is a reason to adopt
private cloud.

Think of hybrid
cloud as a
toolbox: The skill
is to know which
of the many tools
in the box to use,
and when to
switch tools or
even to use
several tools at
once.

Figure 1
Reasons Not to Choose a Public Cloud
% Responding Negative Drivers Toward Public Cloud

Source: Osterman Research, Inc.

Figure 2 shows the top drivers perceived as positive for a private cloud choice (either
run by the organizations IT team or by a third party on premises).

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The What, the Why, and the

How of Hybrid Cloud

Figure 2
Reasons to Choose a Private Cloud
% Responding Positive Drivers Toward Public Cloud

While a
substantial
proportion of
survey respondents believe the
cloud is less
secure, it is
important to note
that most leading
cloud providers
enjoy economies
of scale, as well
as a reputation to
defend.

Source: Osterman Research, Inc.

We also asked users whether they thought their applications are more or less secure
in a public cloud, compared to a conventional, on-premises architecture. The survey
respondents showed a preference for the security of an on-premises application, as
shown in Figure 3. While a substantial proportion of survey respondents believe the
cloud is less secure, it is important to note that most leading cloud providers enjoy
economies of scale, as well as a reputation to defend. This means they can afford
robust physical and logical security capabilities more easily than most organizations
that manage infrastructure on-premises.
Figure 3
Perceptions About the Security of Applications Managed in a Public Cloud
Relative to those Managed On-Premises

Source: Osterman Research, Inc.

2016 Osterman Research, Inc.

The What, the Why, and the

How of Hybrid Cloud

WHY HYBRID CLOUD IS INEVITABLE

In the previous section, we talked about the four main criteria IT can use to decide
whether a workload should be in a public or private cloud: cost, performance, scaling,
and regulation/risk/security. In this section, well look in more detail at why you might
choose public, private or both.

APPLICATION LIFECYCLE

Put simply, you can think of the lifecycle of an enterprise application in five typical
phases. Usually, each phase suggests a natural location for the workload:

Prototyping and early development phase

Initial development work is typically done on-premises often simply
running on developers own desktop machines, as opposed to proper
servers. (A public cloud can also be appropriate, however.)

Later development and Beta-test phase

As development matures, and as components from several developers are
integrated, IT teams usually find it better to use a public cloud, to avoid
CapEx and to test that the workload can successfully be moved from one
cloud to another. (It can sometimes be appropriate to use a private cloud,
for example because of regulation.)

Pilot and Gamma-test phase

Initial live use of the application by a small, select group of sympathetic
users will typically be in a public cloud. As part of this pilot phase, the IT
team can gain experience about how the application scales, which will help
decide where the next phase should be sited. (Again, it can sometimes be
appropriate to use a private cloud.)

Majority production phase

The main period of the applications use, by the largest number of its users.
During this phase, the application can be located in a public or a private
cloud, depending on our four main criteria and the other considerations well
describe later.

Legacy phase
Many enterprise applications remain important to a small group of users after
they are otherwise obsolete perhaps for archival purposes, or to service
a niche need. Typically, youd run these legacy workloads in a public cloud,
because of the desirability of service continuity at low cost.

You can think of

the lifecycle of an
enterprise
application in
five typical
phases. Usually,
each phase
suggests a
natural location
for the workload.

In our survey, users broadly agreed with these natural locations. We asked users in
which phases of its lifecycle they would be comfortable hosting an application in a
public cloud. We also asked about the phases for which they would never be
comfortable using a public cloud.
Results broadly mirror our suggestions above. Survey respondents were very happy
to use a public cloud for prototyping, development and pilot, but significantly less
inclined to host an application in a public cloud during the majority production phase.
Indeed, the only phase when a significant number of respondents would never use a
public cloud is in majority production, as shown in Figure 4.

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The What, the Why, and the

How of Hybrid Cloud

Figure 4
Phases of the Application Lifecycle With Which Decision Makers Would be
Comfortable or Uncomfortable Using a Public Cloud

[Organizations
are] more likely
to deploy onpremises or in a
private cloud if
the application is
considered
critical and
internal-facing.

Source: Osterman Research, Inc.

We also asked a series of other questions seeking respondents attitudes to

deployment. The most notable conclusion: they are more likely to deploy on-premises
or in a private cloud if the application is considered critical and internal-facing.
Once a critical, customer-facing application had been thoroughly vetted and was fully
operational, 38% of respondents told us they would deploy it in either a public or
hybrid cloud; but for a critical, internal-facing application, only 22% would do so. This
suggests many IT managers still arent fully confident that a public cloud can provide
the same quality of service or security as conventional deployments.
Its also notable that more than twice as many respondents said they were unsure
how theyd deploy a thoroughly vetted and fully operational application, compared
with an initial deployment.
We also wanted to understand how organizations might choose to deploy an
application, depending on the sensitivity of the information that it would manage. As
shown in Figure 5, organizations deploying systems that manage customer-facing
information are open to deploying it in a public cloud initially and even more so
once the system had been fully vetted. However, this is not the case for systems that
manage highly confidential information, such as intellectual property, as shown in
Figure 6.

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Figure 5
Preferences for Deploying a Customer-Facing Application

Source: Osterman Research, Inc.

Every public
cloud provider
prices its services
differently to the
others. And those
prices can
change, as can
service quality.

Figure 6
Preferences for Deploying a System That Manages Highly Confidential
Information or Intellectual Property

Source: Osterman Research, Inc.

HYBRID CLOUD LETS YOU OPTIMIZE FOR TCO

Every public cloud provider prices its services differently to the others. And those
prices can change, as can service quality. So, the ability to easily switch your cloud
provider is valuable protection against lock-in.

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The What, the Why, and the

How of Hybrid Cloud

Naturally, the cost models of public and private cloud are completely different. As a
rough rule of thumb, a small-to-medium-sized workload on a public cloud service will
cost significantly less than the equivalent workload in an on-premises, private cloud
that you own.
When you analyze the total cost-of-ownership (TCO) including such line items as
amortized capital costs, fully-loaded people costs, and the cost of power a
workload typically needs to be extremely large for it to make financial sense to run it
in-house. As workloads grow, there typically comes a crossover point, at which the
TCO of private cloud is lower than public. A good example: Dropboxs recent
disclosure that it has moved the bulk of its 500 petabytes of customer file storage
from a public cloud to a custom, on-premises file system. The company made this
move because of favorable economics, compared with the public cloud it was using
previously.iii
Its important to note that different cloud service providers have varying ways of
charging for usage, including time-based accounting, network charges, tiered storage
rates, etc., but that detail is beyond the scope of this paper.
From our survey, its clear that the IT decision makers and influencers we surveyed
perceive TCO as one important driver of hybrid-cloud decisions. When asked about
locating an application in a public or a private cloud, TCO was a moderately positive
criterion (36%) and a weak negative one (12%).

HYBRID CLOUD PERMITS SPLIT USER POPULATIONS

IT teams often wish to segment their users into two or more groups. Hybrid cloud is
a good way to support this type of deployment, either by dividing users into privateand public-cloud groups, or by spreading them among more than one public cloud
with differing characteristics.

Hybrid cloud lets

you avoid a
single point of
failure; it helps
you recover from
disasters and
continue to run
your business.

For example, in many organizations theres a small, important group that requires a
higher service-level agreement than the majority of users. This is the so-called
executive-floor server scenario, in which IT wants to provide the most reliable and
responsive service to its most important users. In this case, IT provides these few
users a private cloud, no-expense-spared service compared with the perfectly
respectable, yet low cost public-cloud service that 99.9% of users receive.

HYBRID CLOUD AND TEMPORARY SCALING

Some applications have vastly variable requirements at different times. This might be
due to unforeseen events for example, a natural disaster causing a high rate of
insurance claims. Or it could be a regular, planned-for event for example, retail
workloads around Black Friday. But it can be difficult or expensive for a typical data
center to cope with growth thats fast, temporary or unexpected.
As we mentioned earlier, public clouds are inherently better at scaling up and down in
response to demand. But what if your workload runs in your private cloud? In that
case, its possible to temporarily augment it with public-cloud resources during those
peak times. This is known as cloudbursting by some in the industry.iv,v
In our survey, IT managers showed a significant preference for public cloud when the
ability to quickly scale is important (39% of respondents).

HYBRID CLOUD IMPROVES UPTIME

Hybrid cloud lets you avoid a single point of failure; it helps you recover from
disasters and continue to run your business.
Many public clouds permit regional duplication in case of failure. And for the ultimate
in reassurance, you can duplicate or distribute a workload across several separate
cloud services. For example, Apple iCloud uses a hybrid mixture of its own private
cloud, plus at least three public clouds to ensure the highest level of service.vi

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Similarly, in case of disaster, a conventional on-premises application can be

temporarily replaced by a public cloud. In simple terms, you create your own
disaster-recovery service by mirroring a private cloud instance to a standby public
cloud instance, or to another private cloud some distance away.
Attention to disaster-recovery and business-continuity reduces unplanned downtime,
but what about planned downtime? The ability to upgrade and patch workloads while
they continue running is an inherent advantage of a cloud architecture (although
there are other ways to achieve this in a non-cloud environment e.g., sophisticated
storage systems).
This is what some in the industry call immutability or phnix servers. Its an
important capability in always on environments. The beauty of this pattern is that it
doesnt require the application to be designed to support online upgrading legacy,
monolithic workloads can be made highly available without modification.
Simplistically, it involves cloning or re-provisioning the running workload to be
upgraded, performing the upgrade, replicating changes made during the upgrade
process from the live instance to the new one, and then cutting over to the new
instance, with no noticeable service interruption.vii
In our survey, IT managers showed a significant belief that a private cloud is a good
place to site a workload if reliability and uptime are important (41% of respondents).

HYBRID CLOUD ALLOWS HYBRID STORAGE

Some types of workloads might benefit from storing different types of data in
different clouds. For example, Dropbox stores user files in a public cloud, but stores
the files metadata in its own data centers (although as noted earlier, Dropbox
recently repatriated most of the files, thanks to improved economies of scale).
Enterprises have different needs when it comes to where data is stored. Some data is
deemed sensitive and companies prefer to store it on-premises, whereas some data
is fit to store on cloud. Hybrid cloud data appliances can federate data and enable
companies to manage which is stored on-premises and which in the cloud. This is
important not only for corporate security, but also for information governance
policies.

Some types of
workload might
benefit from
storing different
types of data in
different clouds.

In addition, regulatory issues or legal restrictions might limit the location for storing
and/or processing the data of some customers, but not others. For example, Box
plans to allow customers to choose where their files are stored, and on which cloud
service. The Zones feature allows its customers to choose a region and a public-cloud
service provider. The initial regions are Germany, Ireland, Singapore and Japan; the
initial cloud providers are IBM and AWS.viii

HOW TO DO HYBRID CLOUD

A BRIEF OVERVIEW OF CLOUD TECHNOLOGY

As we mentioned earlier, a true cloud is characterized by a specific technology, which

differentiates cloud from simple hosting or SaaS. That technology defines cloud, and
it enables hybrid cloud.
Any cloud needs some way to package up the applications to be run in the cloud
using a technology known as virtualization. It lets the packaged workload run in your
own private cloud or in a shared, public cloud.
One of these packages can be run in a cloud environment, on any size of physical
hardware available in the cloud data center. Crucially, virtualization also allows these
packages to share a physical machine, and to be moved between physical machines
even between data centers with essentially no interruption of service.
Virtualization also ensures the workloads secure independence from other workloads,

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The What, the Why, and the

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and it offers a management framework for controlling how the workload runs.

PLANNING IS CRITICAL

As with many areas of IT and business, proper planning is crucial. While its
impossible to fully predict the future, the reality of many data-center environments is
one of fragile, legacy, spaghetti infrastructure. Such disjoint chaos can be difficult
to unravel not to mention expensive. Thats why its important to build a solid
foundation on which to grow your hybrid-cloud future.
The good news is theres now a reasonably mature market of tools and services to
help build your foundation. The early pioneers have already trodden the path,
flattening down the major obstacles.

FOCUS ON FRAMEWORKS

As well as the base-level virtualization technologies that enable hybrid cloud, we

recommend choosing appropriate frameworks. These will help you manage your
workloads, and help you move them between clouds.
For example, CNCFs Kubernetes is an open-source container/cluster manager,
developed out of Googles internal production experience; and IBM PureApplication
simplifies hybrid cloud by using reusable templates (patterns).
In addition, application, storage and database vendors are increasingly offering
frameworks to help federate, partition, migrate and mirror large, live data sets across
clouds. For example, several popular cloud-storage architectures are based on the
OpenStack framework.

When you
approach IT
from a hybrid
cloud mentality,
you naturally
give yourself the
option to move a
workload in the
future.

Another important trend is in the use of standardized, all-in one, datacenter-in-abox products, usually known as integrated or converged infrastructure. Products
such as EMC VCE, Cisco/NetApp FlexPod, or IBM PureFlex promise to make it easier
to build a private cloud, on-premises.

AVOID LOCK-IN

We mentioned earlier that a hybrid cloud architecture allows you to avoid being
locked in to a single public cloud service provider. The scenario to avoid is being
stuck on an under-performing or over-charging cloud.
When you approach IT from a hybrid cloud mentality, you naturally give yourself the
option to move a workload in the future. However, its important to fully understand
your cloud providers approach to its customers data.
This is a critical consideration, since there are varying levels of difficulty and expense
with which data can be retrieved from a cloud provider such as when data needs
to be moved to another service. If you wish to switch cloud providers, these types of
issues might unexpectedly hamper your move, not to mention the potential for
regulatory compliance failure.
Another important part of avoiding lock-in is to ensure your service providers support
open APIs. Indeed, your providers shouldnt merely pay lip service to openness, but
support open APIs as a first-class feature. You should also clearly determine and
specify who manages what as a service: Infrastructure, platforms, data and
applications can all be managed by some cloud providers.

THE PSYCHOLOGY OF TERMINOLOGY

But IT managers shouldnt underestimate the potential for confusion or inflated
expectations among peers and internal, line-of-business customers. Confusion can
arise thanks to the varied understanding of the word cloud it can mean different
things to different people. So, take care not to make assumptions about your
audiences level of knowledge.

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Similarly, by recasting existing, internal IT capability as private cloud, you risk

setting unrealistic expectations. When referring to legacy workloads as cloud, take
care, lest your audience compares your performance against consumer cloud
services.
In our survey, the respondents were split when asked about service performance of
public vs. private cloud, with no significant trend of opinion.

THE BAD NEWS: THE LAWS OF PHYSICS

And finally, no discussion of cloud would be complete without a realistic recognition

of physical limitations. With some types of workloads, interactive responsiveness is
critical to user satisfaction. However, the speed of light imposes an absolute limit on
how quickly a server can respond a phenomenon known as latency. In essence,
the further away from the user a cloud service is, the poorer the perceived quality of
the application.
Moving a workload from an on-premises data center to a remote cloud might add
unacceptable latency. This could make your choice of cloud service provider more
complex for responsiveness-critical applications. Also, the bulk data transfer speed
between a user and a public cloud service is likely to be worse than with an onpremises data center.
Similarly, when considering the migration of a workload between clouds, you should
think carefully about how much bandwidth is available to transfer the virtualized
workload and/or its data, and how the use of that bandwidth is charged. As we
mentioned earlier, different service providers use different accounting models for
data transfer.
Internet speeds have improved immeasurably since he said it in 1981, but Professor
Andrew S. Tanenbaums classic computer-science moral still holds true:

Never underestimate the bandwidth of a station wagon full of tapes

hurtling down the highway.ix

SUMMARY

Cloud architectural techniques offer huge value when used in your own data center.
Plus, they permit you to easily move and share workloads between your data center
and public cloud services.
The benefits are clear: Hybrid cloud allows you to save money, while meeting
business and regulatory needs. And early adopters have already flattened the
pathways for you.
However, theres the danger of terminology confusion within the organization. And
hybrid cloud isnt a magic wand that can fix a badly planned or poorly performing
application.
Nevertheless, the shift to hybrid cloud is all-but inevitable, so grasp the opportunity.

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SPONSOR OF THIS WHITE PAPER

Storage Made Easy provides an Enterprise File Share and Sync Fabric that enables IT
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The SME solution offers a blanket that enterprises can privately apply to wrap
around all their data, whether object storage or file or block storage, and whether onpremises, within a public cloud, or on a third party software vendors cloud
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2016 Osterman Research, Inc. All rights reserved.

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Osterman Research, Inc. does not provide legal advice. Nothing in this document constitutes
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REFERENCES
i
ii
iii
iv
v
vi
vii
viii
ix

blog.softlayer.com/tag/definition (one attempt to define public and private cloud)

dincloud.com/blog/what-are-the-many-types-of-cloud (another attempt)
www.richi.uk/cwa/3044261 (authors roundup of Dropbox hybrid-cloud news)
intel.ie/content/www/ie/en/cloud-computing/cloud-bursting-infographic.html (cloudbursting)
youtu.be/pllRW9wETzw (not to be confused with cloudbusting)
www.richi.uk/cwa/3045439 (authors roundup of Apple hybrid-cloud news)
chadfowler.com/2013/06/23/immutable-deployments.html (immutability)
www.box.com/blog/introducing-box-zones (Box Zones example)
Tanenbaum and Wetherall, Computer Networks, 5th ed., Pearson, 2011, sec. 2.2.1

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