As cloud repatriation continues to be a hot topic, and enterprises look to bring their data back to physical hardware, there’s never been a better time to position yourself as your customers own local cloud.

From security & data management, hosting & hardware, all the way through to pricing and packaging your solution in a replicable manner. With so many moving parts, let’s break it down.

Hardware… to lease? Or buy?

The technology industry has experienced severe supply chain challenges in recent years due to a variety of factors, including trade disputes, natural disasters, and geopolitical tensions. These challenges have impacted the availability and pricing of a wide range of technology products, including servers and how this evolves over the coming years is impossible to predict with any certainty.

Leasing servers and buying servers each have their own set of advantages and disadvantages, and the best option for a particular organization will depend on its specific needs and circumstances.

Pros of leasing servers:

• Lower upfront costs: Leasing servers typically involves smaller capital investment compared to purchasing outright, providing an accessible entry point into establishing your own local cloud.
• Maintenance and support: Many server leasing agreements come with maintenance and support included, which may save you considerably on human resource where staffing shortages continue across the sector.
• Scalability: Leasing servers often provides organizations with more flexibility and scalability, as typically they can easily upgrade or downgrade their leased servers based on changing needs.

The downside?

• Higher long-term costs: While leasing servers may have a lower cost of entry, the long-term costs typically end up being much more expensive than purchasing outright.
• Limited customisation: Leasing may mean few options and less customisation, this may or not pose an issue depending on your ideal systems architecture.
• Dependency on third-party providers: Leasing servers means you’re reliant on third-party providers to maintain and support their infrastructure, so it’s important to work with a reputable provider with a proven track record.

Pros of buying servers:

• Long-term cost savings: Purchasing servers outright may involve higher upfront costs, but it typically carries much lower cost over the life of the server.
• Customisation: The ability to tailor hardware and software configurations to your MSP’s specific needs, provides greater control and flexibility, while also providing room for a point of difference against an “off the shelf” solution.
• Ownership: with ownership comes control and the ability to pivot and change with your business needs without being tied into a multi-year agreement.

The downside?

• Maintenance and support: With ownership comes responsibility for maintenance and support, which can resource-intensive and cost your team in billable hours.
• Obsolescence: Servers can become outdated quicker than you’d like, and organisations that purchase servers will need to ensure they’re investing in a solution that is designed to integrate and adapt with rapidly changing technology.

Whether leasing or buying servers, MSP’s should carefully consider their priorities and balance that with the use case of their typical customer.

When deciding whether to lease or buy equipment for building out out your own local cloud solution, the equipment itself is just once small piece of the puzzle.

Data sovereignty is an important concept for New Zealand businesses to understand, particularly in an increasingly digital world where data is often collected, stored, and processed offshore in the public cloud.  Simply put, data sovereignty refers to the legal framework governing the collection, use, and dissemination of data within a particular jurisdiction.

Naturally, New Zealand businesses are most familiar with the laws of our nation and model their business practices within that framework. Data stored within the cloud and it’s respective offshore clusters adds an extra layer of complexity, by being governed by unfamiliar laws with potentially very different privacy considerations than those outlined in the Privacy Act 2020.

The Privacy Act 2020 (download summary) is a significant update to New Zealand’s privacy laws containing 13 privacy principles, and aims to better protect individuals’ personal information in the digital age. The Act contains new rules on data protection, including requirements for organizations to have robust privacy policies and practices in place, and to notify individuals of any privacy breaches that may affect them.

The Act also introduces new rights for individuals, including the right to request that their personal information be erased, and the right to complain to the Privacy Commissioner if they believe their privacy has been infringed.

In terms of data sovereignty, the Act reaffirms New Zealand’s commitment to protecting the privacy of individuals and regulating the collection, storage, and use of personal data within the country. The Act sets out rules for the transfer of personal information to overseas countries, including requirements for adequate safeguards to protect the privacy of individuals.

Overall, the Act is a comprehensive and modern piece of legislation that aims to protect the privacy of individuals in the digital age, while also allowing for the responsible use of personal data for legitimate purposes.

When looking at data storage, organisations should consider the following factors.

Lawful access — the laws that regulate legal access to data.

Legal institutions — the robustness of legal institutions that oversee requests for access to data.

Privacy frameworks — the protections available for personally identifiable information.

It is rare to be able to negotiate contracts for public cloud services in consideration of the above. By adhering to the data sovereignty framework for the New Zealand jurisdiction outlined in the Privacy Act, businesses can help to ensure that they are complying with their legal obligations and protecting their customers’ personal information.

1. Data Sovereignty.

Data Sovereignty typically refers to the understanding that data is subject to the laws of the nation within which it is stored, making it an important issue to consider when using cloud computing services. By using local data storage, there is no ambiguity as to the applicable laws and protections in place for your business. 

2. Peace of mind.

By storing data locally, you’re able to work closely with real people you can get in touch with directly, instead of a faceless corporation. By visiting the data centre personally, you’re able to gain first-hand experience with their standards and facilities.

3. Enhanced performance.

Storing data locally can improve the performance of applications and services that rely on that data, thanks to lower latency and greater flexibility over your choice of carrier and network design.

4. Better reliability.

Local data storage is less susceptible to outages or other disruptions that can affect cloud-based services. This can provide greater reliability and availability for applications and services that rely on access to that data.

5. Reduced cost.

In many cases, using local data storage can be more cost-effective than using cloud-based services, especially for businesses that need to store large amounts of data. This can be due to the lower cost of hardware and the ability to offset the cost of that hardware over a longer period of time.