Firms in all sectors and of all sizes are searching for new ways to create efficiencies and more powerful technology to accelerate their growth. As they assess their operations, they’re quickly realizing that areas that they once held inside their organizations could be managed by a third party, enabling them to focus on differentiating activities.

Take the operation and maintenance of an application or data center. Is that a core competency for a corporation or a financial services firm? Will it give them a competitive advantage?

Not surprisingly, more and more firms are saying no. And they’re turning to the cloud as an alternative. However, there isn’t just one “cloud.” There are multiple types of cloud offerings – and it’s important to understand each one and whether you move to the cloud yourself or work with a third party before making any decisions.

1. The private cloud. This is the original outsourcing model – when a client is hosted in a private data center which is their own or that of a third party (in our case, an FIS data center). You contract directly with a provider like FIS, and we manage the infrastructure, the hardware and the FIS applications on the infrastructure. We also deliver the latest security and technology innovations to keep you safe and ahead of the pack. This model is also more cost effective over a longer term (min 5 years) for applications that need to be always on 24 by 7.

2. The public cloud. In this scenario, you work with a third-party cloud like Amazon or Microsoft to run applications in their cloud. You can manage the application or work with FIS to manage it for you.

   One advantage of this model is that you gain access to Amazon or Microsoft’s data centers around the world. This generally satisfies any local data sovereignty rules that require you to keep your data within your region or country of operation.

   However, there are some significant downsides to working directly with the public cloud providers. You contract separately with FIS for the application and with the cloud provider for the hosting services. In addition, you must manage patching and security on your own – which means you can’t completely free yourself from non-core activities.

   Secondly, it’s more complex to handle issues and incidents because you must work with two separate vendors.

3. The hybrid cloud. Here you work with an application provider like FIS to access the public cloud. In this option, you contract with FIS and get all the benefits of the public cloud with none of the headaches, because you have just one point of contact – FIS – no matter what the issue is. We also handle all the patching, security and application management for you. And, of course, you get all the expertise of the team that built your application.

One of the benefits clients seek from running in public cloud is a lower price point. The cost can be lower when running in the public cloud, but that is not always the case. It depends on the application, usage, number of environments and technology.

Some applications have periods of time where significantly more processing power is required. In a traditional data center, you must provision for the maximum capacity required. However, in these cases the cloud can provide cost benefit because you only pay for the additional capacity when it’s being used.