Build vs Buy Tipping the scales in Cloud

By Dr. Jason M. Black (JB) and Jean He, Uber Technologies, Inc

What’s the best part about the end of summer? The kids going back to school? Of course not! It’s budgeting for the following year. Seriously though, it is almost certain that there are many medium- to-large-scale company CFOs, CTOs, VPs of Network Infrastructure, and other subject matter experts and stakeholders discussing whether to leverage Cloud with their On-Prem strategy or go all in to convert their CAPEX and OPEX into all OPEX.

Unfortunately, it’s not that simple. There are multiple. areas to take into consideration when comparing Cloud vs On-Prem or even a Hybrid Model. There are pros and cons to each, but with these pros and cons one must consider many different trade-offs like speed of execution, cost optimization, redundancy, diversity, capacity, latency, scalability, operationalization, and supportability, to name a few.

Companies have to determine what matters most, as the aforementioned items are typically inversely proportional unless a company has the money and resources to ensure their viability. For the sake of this article, we will assume that most have a modest budget and a finite number of resources. Therefore, if a company chooses the route of Cloud, they will certainly gain on speed of execution and scalability, but they will potentially falter on cost optimization (depending on how well its sourcing team can negotiate on either side of the fence). Additionally, if the same company is looking for diversity and redundancy, then they are relying on the Cloud provider and typically paying a premium to have a multi-region/multi-zone approach, with multiple carriers, and with multiple hardware vendors. Conversely, if a company built and managed their own On-Prem environment, they would be in control of their own destiny by controlling all costs in the path with the ability to reduce each year through internal sourcing negotiations and knowledge of industry trends. Let’s dive in deeper to understand build vs buy and the caveats of each.

There are a number of factors companies should consider when evaluating and making a decision between On-Prem and Cloud. Alongside the lessons learned from our industry knowledge and frontline experience, below are some factors worth considering. 

Dr. Jason M. Black (JB) and Jean He, Uber Technologies, Inc

Scale & type of business: The type and eventual scale of a business would guide a decision on where to build the infrastructure. Does the business generally have a seasonal workload capacity as well as the network traffic volume? Does the business have a steady growth over the year? How is the scale of business projected to grow in five years – linearly or exponentially? What is the business requirement of the infrastructure, e.g. uptime, network latency and/or other performance needs? Cloud usually provides flexibility to scale up or down one’s infrastructure needs, but be aware that a burst of business growth would mean a reshape of the future Cloud bills. Conversely, On-Prem spends large CAPEX upfront, while maintaining low OPEX efforts for capacity growth. This especially suits businesses which are aimed to scale big and at a steady rate.

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