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Overseas vs local cloud vendors, according to ICONZ

By Shannon Williams
Tue 1 Dec 2015
FYI, this story is more than a year old

With major cloud vendors geographically closer, businesses may be considering migrating to an overseas cloud vendor.

That’s according to new Zealand cloud technology firm ICONZ, who says there are many factors organisations need to consider when deciding whether to go with a local or overseas cloud vendor.

“Choosing between a local or overseas cloud provider used to be simple. For the lowest cost you’d look off-shore. For a lag-free, customisable cloud, you’d shop locally. These days it’s not so simple,” the company says in a statement.

The major cloud vendors are now geographically closer. Amazon, Microsoft and IBM’s SoftLayer have all set up operations in Australia, ICONZ says in a statement. Furthermore, Ultra-Fast Broadband is now widely available, and latency has become less of an issue.

“Does that mean it’s time to migrate to an overseas cloud vendor? Well, it depends,” the company says.

ICONZ says there are 10 main factors to consider when choosing a cloud vendor.

Consider overseas cloud vendors when:

1.     Cost is a major factor. Typically, compute cycles and storage will cost less (although data transport costs become a bigger issue). Google, Amazon and Microsoft all spend billions on their cloud platforms.

“Their economies of scale are unmatchable by local vendors. They can consolidate and virtualise massively,” says Jack Talbot, general manager at ICONZ.

2.     You’re a small business with 5 seats or less. For smaller firms, Microsoft Office 365 or Google Apps for Work will often meet your requirements. Note that there may be one-off migration costs to transfer all your data, but this can be justified in the long term.

3.     You have basic computing needs. If your organisation requires compute that’s easily performed by public cloud servers or just need long-term data archiving – overseas clouds are a good place to start.

4.     Resilience is vital. The large international vendors build multiple layers of redundancy. This means your cloud is better protected against outages and catastrophes.

Consider local cloud vendors when:

5.     Low latency is critical. According to a recent Verizon report, connection speeds to Australia’s data centers are approximately 24ms for a round trip. Data Centers in Singapore, Hong Kong and the US still take at least 120ms for the round trip. While Australian vendors are close, ultimately they’re still slower than local cloud vendors. The issue then, is how latency impacts your applications. Consider a low-cost, global cloud vendor for low priority tasks. For high priority workloads where speed is essential, consider a New Zealand vendor.

6.     Data sovereignty is critical. International cloud vendors can process, replicate and store your data across various countries. This blurs the laws that apply, in a legal dispute. Some cloud vendors standardise access procedures across locations. Others might only disclose data under a search warrant or court order. It pays to check.

Think about your intellectual property, your data, your client’s data and what jurisdictional laws you’re comfortable being subject to. Some sectors require data to be stored within New Zealand. Government agencies, legal and accounting firms often face such requirements. At the very least, local cloud providers are bound by New Zealand’s laws and regulations.

7.     Stronger cloud vendor relationships. When on-going support is critical, a local contact becomes invaluable. If you need an emergency response or faster turnaround, a local cloud vendor is often more responsive.

“Getting on Microsoft’s or Amazon’s radar takes significant spend. Most New Zealand Small Medium Businesses won’t have the clout for a meaningful, direct relationship with these enterprises. Even via a local IT provider, there are clear limits on what’s possible on these multi-national clouds,” says Talbot.

8.     Data transport between you and your cloud is cheaper and faster. Some local cloud vendors even provide free national data.

9.     Data migration costs can also be lower. Getting your data to a local vendor or extracting it from them, can be relatively straight forward. These costs quickly escalate if you’re migrating terabytes of data to overseas vendors or extracting / switching between overseas vendors.

10.   Microsoft, Google, Amazon, et al. may store your data permanently. Even after you migrate off them, a copy of your data may be retained. What are the security implications for your business?

“In the long term, we see most organisations implementing a hybrid cloud solution. This mixes on-premise, private and public clouds in local and overseas data centers. IT managers need to weigh up a myriad of variables, and then decide which workload should sit where,” says Talbot.

“Make sure you’ve got enough details to ask your IT vendor the hard questions,” he says. “Where your data eventually sits, is a crucial decision impacting your business’s performance and bottom line.”

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