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If you are in a private cloud, don't you have the same software upgrade cycle process as on-premise solutions? (Webinar Attendee Question)

This question was asked by an attendee during the Proformative webinar "What's Stopping CFOs from Moving Accounting To The Cloud" held on February 20, 2013.  Please join the discussion and add your insights below.

A video of the webinar can be viewed here


Topic Expert
Donald Koscheka
Title: Principal
Company: Bluecloud Communications
(Principal, Bluecloud Communications) |

In general yes, administering your servers in a private cloud is roughly analogous in cost to managing servers on-premise. Where you can get some economies of scale is in reduced capital costs to run your own data center (so while you're not sharing your servers, you are sharing the building, HVAC, personnel).

Private cloud is an option for firms that are considering outsourcing their datacenters. Often, the motive is not to reduce costs but rather to make them more predictable.

Greg Pierce
Title: VP, Tribridge Concerto Cloud Services
Company: Tribridge
(VP, Tribridge Concerto Cloud Services, Tribridge) |

In a true Software as a Service (SaaS) model in a private cloud, the solution includes software support, the underlying hardware layer (so you’re not buying your own equipment) the application upgrades, and any maintenance costs. If you elected to host software in a data center, then you would be responsible for software upgrades and maintenance fees. The bottom line is, with a private cloud you get better economies of scale than you would on-premise or through a pure hosted model, but more customization and dedicated resources than a public cloud.

Title: Senior Treasury Consultant
Company: Kyriba Corp
(Senior Treasury Consultant, Kyriba Corp) |

I agree with Donald and Greg, with a caveat: not all vendors and software industries are applying the same principle to private cloud.
In the cash and TWS industry, private cloud is closer to an ASP model, not SaaS (single tenancy, rather than multi-tenancy). It is indeed accepted that to profit from cloud privacy, you cannot share the same software resources as other customers. It is typically what cloud-provider Microsoft and Rackspace proposes: the economy of scale and included maintenance without the hassle of performance drop at month-end.

In this case, hardware maintenance and security is the responsibility of cloud provider while software upgrade and daily monitoring usually falls under the customer's.

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