Should your business move all its IT functions to the cloud, or does it make sense to keep some things in-house? If the latter, how do you know which to migrate to the cloud and which to retain? As might be expected, there are no single, right answers to any of those questions. Every business has to look at its own unique situation and needs and also any special considerations related to security, regulatory compliance, financial constraints, etc.

“First, try to understand the characteristics of your data and information before planning a move,” advises Anis Abdul, chief technology officer of Tonido Personal Cloud, an accessibility solutions provider. If the data is proprietary--things like customer lists, product designs, trade secrets, legal documents and contracts--you should consider keeping it in-house. The same holds true for businesses that have a fiduciary responsibility to protect their customers’ data (insurance agents, health care providers, educational institutions, for example). “Cloud services are better for business communications such as videoconferencing, remote desktop, webcasts, product demos, marketing videos--any temporal, transient business operations,” he says.

Jennifer Walzer, founder and CEO of Backup My Info!, an online data backup and recovery service, suggests you start by making a business case for moving to the cloud. Look for any strategic or competitive advantages moving might provide, such as cost savings or the removal of administrative burdens. “In conducting this analysis, businesses should consider the long-term scalability and reliability of cloud-based solutions,” she says. “High availability, scalable architecture, and geographic diversity and redundancy are all potential advantages of moving to the cloud.” You also must take into consideration how any cloud-based solution will integrate with existing business processes, security policies, data, and applications.

The exercise of analyzing which functions to move to the cloud may also present additional opportunities to cut costs and/or improve productivity by completely eliminating certain applications, says Atchison Frazer, chief marketing officer at KEMP Technologies, a provider of load balancers and application delivery controllers for onsite and virtual networks. Start by analyzing the amount of time and money you spend on trouble-shooting applications, then bifurcate that list by business-critical applications versus non-business-critical applications.

If an application is non-business-critical (that is, the business value of the output minus productivity and maintenance is a negative value), get rid of it, Frazer says. For the remaining business-critical apps, evaluate the cost-benefit between continuing to run them as packaged apps on hardware, including the cost of both hardware and software maintenance, services, and support, as well as break/fix replacement costs. Start with the typical three-year amortization of IT hardware as a zero-cost basis analysis against the “lock-in” risk factor of hardware procurement. Factor in ongoing cost increases for software and hardware maintenance, then compare that to a subscription basis consumption fee typically levied in a SaaS (Software as a Service) or cloud delivery model.

“Don’t forget, the burden of hardware maintenance is removed, and the subscription fee typically covers auto-upgrades,” Frazer emphasizes. “Cloud providers also operate on a service-level agreement (SLA), ensuring that quality of service and performance guarantees are delivered, which makes it much easier for SMB end-users to measure the ROI of their investments.”

Among the applications that make sense for most businesses to run in the cloud are disaster recovery, unified communications, and customer relationship management, but it’s always best to start with the kind of enterprise-wide analyses Abdul, Walzer, and Frazer recommend to determine which of your business’s functions are best candidates for the cloud. All-or-nothing situations are rare. “Just like most things in the world, neither extreme is good,” says Shridar Subramanian, vice president of marketing at Exablox, which specializes in cloud-managed scale-out file system storage and data protection solutions. “There is not an instance I can think of where storing everything or nothing in the cloud would make sense. That’s why we’re seeing a large uptick in a hybrid approach to cloud storage.”