The cloud provides businesses with an easy way to reduce costs while increasing productivity – assuming it’s managed correctly, of course. Otherwise, you could actually end up paying more. As always, cost management begins with making the right investments.
One difficult decision many financial services firms have to make is between managed cloud hosting or managed private cloud. These two services can both be extremely valuable, but what about the costs? Which is more expensive, and is it worth the additional investment?
Cloud Hosting vs Private Cloud: What’s the Difference?
Before discussing costs, it’s important to define the services on offer. While both can be managed by a third-party, cloud hosting and private cloud are slightly different.
Cloud Hosting
Cloud hosting allows you to replicate a server virtually and then provider applications, data, or websites over the internet. This approach is highly scalable and flexible. You can adjust quickly to shifting circumstances, making changes across many locations instantly.
Typically when using a hosted cloud, the provider offers a pre-configured setup. They own and maintain the resources, while you simply access them as needed.
Private Cloud
A “private cloud” simply means that instead of using public cloud resources (which are available to anyone), you have a dedicated environment built just for your business. Unlike a hosted cloud setup, these are often owned and controlled by you. Private cloud environments are designed for security and highly customisable.
Both of these services can be “managed”. What this means is that a third-party provider (usually a managed service provider, or MSP) takes care of day-to-day tasks for you. These might include migration, maintenance, issue resolution, security and compliance, and/or a number of other operations.
Private Cloud and Cloud Hosting Cost Comparison
Generally speaking, all managed cloud services charge a single monthly subscription fee. However, certain factors can influence this fee:
Required Resources
With any cloud service, the type and number of resources needed will have a significant impact on the amount you pay. How much of an impact depends partially on the service you choose. Private cloud offers the freedom to choose your own resources, which provides additional freedom but makes you responsible for those expenses. When using managed cloud hosting, the MSP controls resources, which can be cheaper.
Customisation
Some cloud hosting providers may allow you to customise your environment somewhat, but this comes with a caveat. A heavily tailored cloud server will cost significantly more than a standard one. This is also true of managed private cloud, though often to a lesser extent, as you have much more control over which infrastructure is involved.
Security
Cloud security for financial services firms is non-negotiable. Not only are these companies subject to strict regulatory requirements, but a single breach can permanently destroy client trust. This means a company in this field is already likely to pay a premium for strong security measures.
Under cloud hosting, these will often be included in the pre-built environment the MSP provides. However, this does mean you have slightly less control. Using a private cloud presents you with additional freedom, but you’ll need to pay for any security measures you implement on your own. Managed security may also be limited to more expensive service tiers, depending on the MSP chosen.
Service Level Agreements (SLAs)
The level of service you require is another crucial factor when determining cost. Response time guarantees, performance tracking, and indemnification clauses can all add to the final price. This applies to both cloud hosting and managed private cloud services.
Which Service Should I Choose?
The service you choose will depend on your needs. To ensure you make the right decision, ask yourself a few questions:
- What are your goals for the future?
- Do you value customisation or cost savings more highly, right now?
- What are your security and compliance needs?
- Do you need dedicated infrastructure?
- What’s included in the SLAs?
- Can your chosen service scale as the business does?
For many financial services firms, managed private cloud will be the right choice. It offers the security and customisation businesses in this field often need to thrive. But if you require a dedicated server, it might be best to choose cloud hosting.
Get the Cloud Support Your Company Needs
There are a variety of different cloud services available, each with its own strengths, weaknesses, and cost. If you’re choosing between managed cloud hosting and managed private cloud, carefully consider your needs and what you’ll have to pay in order to fulfill them. By going in with a clear understanding of your infrastructure and goals, you’ll be able to make the right choice.
Or perhaps you’re looking for long-term maintenance and support. In that case, PCC can assist you. Our hardworking experts provide everything you need for a secure, stable, and productive cloud platform, from migration assistance to regulatory compliance. Get started by learning more about our managed cloud services.
FAQs
What is the Difference Between Managed Cloud Hosting and Managed Private Cloud?
While both are managed services, there is a small difference between private cloud and cloud hosting. A “private cloud” is simply any cloud service where all resources are dedicated to only your business, whether internally or externally controlled. Cloud hosting, in contrast, provides a dedicated pre-built virtual server, which can be used for more complex tasks.
Which Costs More: Managed Cloud Hosting or Managed Private Cloud?
The cost of each service is difficult to estimate, as they rely on many different factors. A particularly complex private cloud environment, for instance, may end up more expensive than a basic cloud hosting service. It’s important to ask for a number of quotes, and consider your needs carefully, before making a decision.
What are Some Unique Factors Financial Services Firms Must Consider?
The biggest factors financial services firms must consider are the additional data security needs and stricter regulatory requirements this industry is subject to. You may need the enhanced security that only a private cloud can offer.
What are the Benefits of Managed Cloud Services in Financial Services?
The benefits of managed cloud services for a financial services firm are numerous. They allow you to manage costs effectively, strengthen security and compliance, and ensure the long term efficiency and stability of cloud computing resources.
