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How does IaaS Work?

With IaaS, your organisation's Local Area Network (the LAN which connects all the staff computers etc) is linked via the internet to the cloud service provider rather than to racks of devices in your office. This type of 'outsourcing' has been occurring for many years under other names such as 'managed services'.

IaaS offers the flexibility of choosing the extent to which the provider's technical staff or your own staff support and manage the infrastructure. This can vary from basic support, through to a total managed solution. This decision will be different for different organisations, depending on perceived risks and cost pressures, but in all cases you will still need someone from your organisation to monitor and control the relationship with the provider – including monitoring and managing adherence to service levels, planned and unplanned service interruptions, and contractual issues.

This image shows a 3D cartoon cloud overlaid by a crossed ring spanner and flat-blade screwdriver.

What Problems are Solved by IaaS?

Small businesses and organisations typically have racks in a small room – or shelves in a corner of the office – holding computers that manage:

  • digital data and centralised applications (servers);
  • storage (backup) devices; and
  • routers, hubs and switches (network devices).

These devices collectively provide the IT and communications functions for the business, and are usually operated and managed by a computer engineer or a knowledgeable staff member.

To minimise potential for interruptions to the business, this equipment is often duplicated to provide greater certainty of availability. As a further precaution, extra staff are usually employed and trained to cover absences for sick leave, annual leave and staff development.

The costs for all this can be very high, and represent a disproportionate and unsustainable burden compared to larger organisations. There is also significant management overhead, and the quality of overall IT operations can be compromised if staff are insufficiently trained or not allowed enough time to perform all the maintenance tasks required.

How does IaaS Solve these Problems?

By aggregating the processing, storage and application needs of many small businesses, IaaS providers can pass on the economies of scale enjoyed by much larger organisations; money is thus saved that can be better spent promoting your business or selling more products.

Savings can be greater if the provider's technical staff can be used for operating system and database support needs. This will require careful planning when moving to cloud services so that you are sure everything is covered (see Part 5 of this Module), but in most cases the move will be rewarded by significant savings.

If you subtract the cloud provider's charges from your current 'in-house' costs, you will have a rough estimate of the cost savings that may be achieved.

Using IaaS also reduces the ICT management burden, which in small businesses often falls on the principal of the organisation. It should also result in a more reliable service (see Part 3 of this Module).

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