In our previous blog in this series, we explored the strategic benefits of migrating your EDI infrastructure to the cloud, as well as the potential risks. This article takes a deep dive into your cloud provider options and the pros and cons each of them offers.
Cloud hosting options are proliferating because they promise lower costs and simpler IT infrastructures—including for those currently using on-premises EDI/B2B integration environments. Just know your options, because they vary widely in terms of things like cost, management complexity, and disaster recovery options.
Understanding the differences between hosting models and the pros and cons of each will help you choose the one that best fits the needs of your organization.
Key Takeaways:
What is the Public Cloud?
Every IT professional knows that the public cloud is essentially a distributed computing resources network. But not everyone in IT knows the origins of the cloud concept
One version of cloud computing dates to the late 1960s and Project MAC at MIT where researchers developed a time-sharing operating system to share computing resources.
The benefits of resource sharing then were the same as the benefits now: Lower hardware and processing capacity costs.
Today, resources such as storage and computing are offered by third-party providers such as AWS, Microsoft Azure, or Google Cloud. The resources are less expensive to use—at least initially—because millions of customers share them.
Obviously, the worlds of EDI, integration, and supply chain management are moving to the cloud for the many advantages it offers, as we explain below. At the same time, there are drawbacks to consider too.
Pros:
- Cost Efficiency: Pay only for the resources used (pay-as-you-go), with no need for upfront hardware investment.
- Scalability: Easily scale up or down depending on demand and need.
- Access to Advanced Services: Benefit from built-in security, redundancy, and advanced services like AI, analytics, and APIs.
- Data Privacy and Security: Each customer’s data is isolated and protected with several layers of encryption and rigorous user identification and access controls.
Cons:
- Cost Creep: Initial cloud adoption is often cheaper than building and maintaining on-prem infrastructure, but long-term costs can creep up. Companies can also face unexpected fees for data transfers (also known as egress fees). It’s important to understand your service agreement and monitor your cloud usage.
- Security Concerns: Although major cloud providers offer robust security, misconfigurations on the customer's part can leave systems vulnerable to breaches. The shared responsibility model dictates the security obligations of a cloud computing provider and its users to ensure accountability. Clearly it’s critical to know what your responsibilities are, and how your firm will meet them. Regular security audits using the right tools are critical to manage risks and stress test best practices on the admin and access side.
- Data Privacy and Compliance: Compliance with regulations like HIPAA, GDPR, or PCI DSS can be challenging with public cloud services because businesses may not have full control over where data is stored or how its managed.
- Limited Customization: Public cloud environments are standardized, with limited customization options compared to private clouds.
- Latency: Public cloud services might introduce latency issues for some businesses, especially those that are far from end users. Delays in data transfer can impact performance and decision-making for applications like EDI when users need real-time visibility into transactions.
What is a Private Cloud?
A private cloud is a dedicated cloud environment that is either hosted on physical machines in a third-party data center or hosted using virtualized computing/storage resources hosted by the third-party provider.
It can be ideal for businesses with specific compliance, security, or performance needs. Think of financial institutions, healthcare organizations, or companies that perform defense contracting. Let’s look at the pros and cons this model offers users.
Pros:
- Full Control: A private cloud can offer complete control over configuration, security, and compliance. It also gives complete control over resource allocation. This means users can allocate specific amounts of computing power, storage, or bandwidth to critical applications without competition for resources.
- Customization: Private clouds are highly customizable to meet unique business requirements. For example, a financial services firm might configure its infrastructure for maximum security and performance using specific encryption algorithms or storage protocols to comply with regulatory requirements.
- Security: With a private cloud an organization can implement its own security configurations such as setting up dedicated firewalls, intrusion detection systems, and encryption protocols. As well as piggyback on others offered by the provider.
- Data Sovereignty: By using a private cloud, companies can ensure that data is stored in a specific data center or geographic region and avoid the complexities and risks of cross-border data transfers.
Cons
- Cost: Private clouds can mean higher upfront and ongoing costs compared to public clouds, as businesses must maintain dedicated infrastructure. Even if a third-party provider manages the private cloud, which is often the case, the dedicated infrastructure is expensive. Private clouds incur ongoing maintenance costs for upgrades, repairs, and operational staff. These costs can outweigh the benefits for small and medium-sized businesses. They also require businesses to invest in additional infrastructure to ensure high availability and disaster recovery—either directly or with the private cloud provider.
- Scalability: A private cloud can scale but only to the extent that underlying hardware allows where there are some costs. Hence, scaling can be slower and more expensive, as scaling requires investing in additional hardware.
- Complexity: Private clouds require high levels of IT expertise to manage, a struggle for companies without large IT teams. And private clouds place the entire management burden on the organization for security, updates, and patching, or the private cloud vendor.
- Vendor Lock-in: Businesses that use a private cloud hosted by a third party rely heavily on proprietary features from that vendor. As such, they may find it can be costly and complex to migrate away from such a provider if their needs change, service degrades, or costs become unsustainable.
What Is a Hybrid Cloud?
A hybrid cloud combines on-premises infrastructure (or a private cloud) with the public cloud. This model makes sense for companies with unique but variable computing and storage needs.
Let’s look at the advantages and downsides of this hosting model.
Pros:
- Flexibility and Scalability: Hybrid cloud hosting gives businesses the flexibility to move workloads between environments based on performance, security, application, and cost needs.
- Cost Optimization: The ability to use the public cloud for variable workloads and the private cloud for predictable or sensitive workloads that lets organizations optimize costs.
- Business Continuity and Disaster Recovery: Hybrid clouds facilitate disaster recovery by letting organizations use the public cloud as a backup environment while maintaining mission-critical workloads in a secure private cloud.
- Vendor Flexibility: With the hybrid model, organizations are not limited to one cloud provider, and they can choose different providers for specific workloads. This lets them avoid vendor lock-in and use the best tools from each provider.
Cons:
- Complexity: Hybrid clouds offer unique advantages but managing one can complicate system integration. It also requires advanced skills. This is due to the various security protocols, data synchronization, and network infrastructure that organizations using hybrid clouds are required to manage.
- Security concerns: Misconfigurations, improper access controls, or weak encryption can expose data during transfers between public and private clouds.
- Cost management: Operating across both environments can increase costs if not carefully monitored and optimized.
- Latency and Performance Issues: Depending on how they distribute their workloads, businesses may experience latency when accessing or moving data between environments, especially If their public cloud is located far from their private infrastructure.
Conclusion: Which Cloud Hosting Option is Best for My EDI?
When it comes to the hosting option that’s right for you, there is more than one right answer. While that reality can feel a little too squishy for some decision-makers, it also speaks to the flexibility of cloud-based options.
Whether you choose the public cloud for its scalability and cost savings, a private cloud for enhanced security and control, or a hybrid approach for flexibility, understanding the pros and cons of each will help you make the decision that’s best for your organization.
Ultimately, the best EDI infrastructure migration choice will support your operational needs, technical capabilities, and long-term goals for digital transformation. If you’d like to discuss your hosting options with a migration veteran and industry expert, contact us here.
We can help you assess the complexities and risks involved and develop a plan for a successful transition to the cloud with no impact on trading partners or operations while maximizing the return on your EDI investment.
Other articles in this series:
Should I Migrate My On-Premises EDI Infrastructure to the Cloud?
How Do I Choose the Right Cloud Provider to Host My EDI/B2B Infrastructure?
What is the Best Way to Migrate My On-Premises EDI/B2B Infrastructure to the Cloud?
