These Decisions Will Make or Break Your Company’s Data Infrastructure

Data processing infrastructure has become a lifeline for various businesses. For example, the recent Amazon Web Services outage temporarily shut down some of the world’s largest and most well-known companies and services, including TicketMaster, Roomba, Venmo, DoorDash and Spotify, as well as Amazon’s own Prime Video.

Blackouts are a risk these companies take by leveraging public cloud options, but there are also a number of benefits to outsourcing that can tip the scales in favor of those options. As with many technical decisions a business executive may face, choosing whether to build, buy or partner in infrastructure is critical, the crucial question is, “How do I invest in the infrastructure that best fits my needs?”

The answer, of course, it all depends. Every business has unique needs that are answered in a variety of infrastructure options, and it’s important to weigh the risks and benefits before choosing one. Ultimately, the best decisions often lie in a combination of strategic factors, including business needs, growth trajectory, finances, and more.

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public cloud

Public clouds offer a reliable and agile alternative for startups that need immediate computing and reporting solutions. This option has recently gained traction in the business world, as it allows companies to explore, test, and validate innovative ideas and/or new workloads and then rapidly scale as needed. Major players in the public cloud space include Amazon, Google and Microsoft.

The benefits of these services are that they do not require any initial capital investment to take advantage of and offer ease of use and fast implementation speed. However, if users fail to manage these resources properly, hosting costs can become too high. In other words, as customers scale, costs scale too.

The public cloud represents a robust early stage option. For small venture-backed companies, raising capital is obviously very expensive: Opting for a public cloud with no capital investment is a cost-effective and useful option when the technology underpinned is new and evolving and the necessary resources, storage, and network bandwidth are available. not yet fully understood. That last factor is why many high-growth companies choose this infrastructure, as it can be the best solution for those whose transaction volumes are unpredictable. Public clouds also provide flexibility (servers can be more easily scaled) and freedom from being locked into specific hardware.

When a business is first opening its doors or is going through an early growth phase, public cloud alternatives can prove to be an invaluable resource. However, it is important to consider when to move away from it and to a private cloud infrastructure once the scale, reliability and cost dynamics all change significantly as the company matures.

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Private cloud

As businesses go beyond public clouds, or seek greater control over network construction and reliability, private clouds may be a suitable alternative. Moving into this space is typically influenced by business-specific factors, such as volume of data and transaction processing, ability to estimate volume, need for increased reliability or uptime, and lower cost of capital. This route also has a significant financial impact, as it represents a large fixed cost of scaling a business (as opposed to a public cloud setup) but a lower total cost.

In today’s digital economy, speed and efficiency in data processing can be a key competitive advantage, and a catalyst for leveraging private cloud options. Our company, for example, processes more than 1.1 trillion advertiser bids every day, generating more than 3.3 petabytes of data during that time. When we scale, it makes sense to set fixed costs in an environment capable of scaling in sync with our business.

With private cloud options, decisions also have to be made about whether to leverage a third-party provider or own and operate the hardware. A colocation center is a data center that provides the physical space and hardware to support the infrastructure, and this option is a fixed cost based on initial investment designed to handle a defined volume of traffic.

At PubMatic, we build our own global private cloud infrastructure to better optimize and control all layers of the infrastructure stack (including network, hardware and software), enabling us to operate more efficiently and deliver better results for our customers.

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As a business scales, its infrastructure needs will grow. Particularly in companies where the speed and efficiency of data processing can serve as a competitive advantage, business and finance executives must be involved in their organization’s infrastructure strategy. As a leader, you must not only evaluate the pros and cons of all compute options to determine which one best fits your needs, but also consider what triggers to switch from one path to the next as you scale.