Cloud services are a great alternative for almost every company for many compute needs. Access to such services can be easy and rapid to obtain—many will even accept your credit card. Many tasks come to mind as being better from cloud sources like payroll and employee benefits, expense management and even CRM for smaller companies.  And compute services, such as from Amazon Web Services, are attractive for many needs—like testing software.

But cloud services are not the answer to every workload. Many companies have traditional applications on mainframes or older client-server systems that can’t be easily migrated to the cloud. Others have valuable intellectual property that folks believe they can better protect with on-premise systems. And, there are many other scenarios where cloud services don’t make sense and a hybrid cloud strategy is a better choice.

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Here are some reasons a hybrid cloud solution may be the best deployment for your needs:

1. Cost

Cloud services for short or mid-term needs can be less costly, but in the long-term the opposite is true. Consider this: one might rent a car for a week or so but could you afford to rent a car for a year or more?

2. Migration

Older applications were designed and optimized for compute architectures available at the time, such as IBM mainframes. Unfortunately, these can’t easily or quickly be migrated to a cloud platform, such as Amazon Web Services. In this situation, the associated costs would far outweigh any savings gained.

3. Digital Business

As companies develop digital offerings to sell data services, their customers will demand high availability and performance. And if the underlying data is sensitive, running the data services on a public cloud platform might not be acceptable to some customers.

4. Regulations

In general, compliance requirements are increasing in many industries and countries. The largest cloud service providers are keeping up, but what about smaller ones offering unique software applications such as talent or budgeting?  Those in highly regulated industries must carefully consider the best alternative, which might be on-premise systems.

5. Performance

Some applications must perform with lightning speed—think stock trading or airline ticketing systems.  Perhaps these are best run on systems contained in a company’s data center.

Bonus: Financial Considerations – opex vs. capex.  These budgets are funded and treated differently; one can’t just convert a planned capital expense into an operating expense. And increased operating expenses reduces profits. What’s more, many businesses want capital expense due to depreciation advantages; one loses these with cloud services.

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Typically, a hybrid cloud solution is the best approach for most companies. However, each will have to examine their applications and infrastructure in light of their current and future business strategy to determine in which instances cloud service or on-premise based solutions are best.

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