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Reaching for the Cloud

Many colleges are embracing IT cloud services, but significant cost barriers remain for smaller institutions.

July 5, 2018
 
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Cloud-based IT services are becoming the norm in higher ed, but some colleges, particularly those with limited resources, may not be as far along on their “cloud journey” as one would think.

Most institutions have moved to the cloud in “one form or another,” but there are relatively few institutions that have moved beyond adopting cloud-based software (known as software as a service, or SaaS) to cloud-based infrastructure and platforms (IaaS and PaaS, respectively), said Karen Wetzel, director of working and constituent groups at Educause, which promotes the use of information technology to advance higher ed.

Tom Dugas, director of information security and new initiatives at Duquesne University, said it is common for institutions to move into cloud by first trying out SaaS options such as email, then expanding into IaaS and PaaS, which are more complex and costly to implement. Dugas said his institution was one of the first to switch to Microsoft’s cloud-based Office 365 suite a few years ago and has been moving more and more services to the cloud, “as the need arises.”

The promise of cloud services is that they will provide a better experience for users, reduce costs for institutions that would previously have spent lots of money on hardware and, if the service is managed by the vendor, reduce workloads for stretched IT staff. Cloud vendors such as Jenzabar say that their services may increase operational costs, but that this is offset by large decreases in capital costs -- saving institutions money in the long run.

Vicki Tambellini, president and CEO of higher education consulting company the Tambellini Group, said that cloud costs can vary significantly depending on the vendor, the services selected and the size of the institution.

"There's no one right solution for every institution, but there is a best solution for every institution," she said.

For an institution with about 1,000 employees and 5,000 to 6,000 students, the cost of moving HR, finance and student information systems to the cloud can range from $400,000 to $700,000 per year, depending on the vendor and the modules. Smaller institutions might pay less, while larger institutions might pay millions of dollars annually, she said.

Tambellini said moving to the cloud can provide better security, disaster recovery and business continuity, but it may take several years to break even. In addition to annual operating costs, "institutions have to plan for implementation, training, change management, project management and a host of other expenses to ensure project success," she said.

These setup costs can create a barrier for smaller institutions wishing to switch to cloud services, said Dugas.

“A lot of people think, ‘well, why don’t you just call Amazon Web Services and get a bunch of data servers?’” he said. But the reality is not so simple.

“When you start thinking about how we’re going to secure that, whether we’re going to have to tie it into our existing infrastructure in some way, the barriers get more and more complex,” Dugas said.

For larger institutions that have “already made a sizable investment” in data centers on their campuses, the cost benefits of moving to cloud are clear, he said. But for smaller institutions, “we’re in the opposite position. We think it’s going to be costlier in terms of resources and expense to move to the cloud than it is to host it ourselves.”

Implementing cloud-based platforms and infrastructure would require "hundreds and thousands of staff hours that we can't spend," he said. The university might also have to run dual infrastructure during the transition, which "would be costly to manage, both in terms of resources and in terms of IT infrastructure and cloud costs."

Josh Piddington, vice president and chief information officer at Rowan College at Gloucester County, said it's a faulty assumption that moving to cloud will always save institutions money. Some cloud services may require temporarily contracting technicians to get them up and running.

“We don’t have a ‘cloud architect’ like you would in a Fortune 500 company,” said Piddington.

He said there are some cases where moving to cloud just doesn’t make sense financially.

“Anything that’s really data heavy, like my security camera infrastructure with 250 cameras -- to put that in cloud would cost a lot of money,” he said.

But where moving to cloud does make sense, there can still be challenges. Rowan has a single sign-on system across campus, but Piddington said getting it to work with Office 365 had been difficult. For the moment, the New Jersey college still hosts its email on premise.

Steve Terry, director of information technology at Capital University, a small private liberal arts college in Ohio, said that even if smaller institutions have the in-house expertise to set up cloud services, moving to cloud-based products (particularly IaaS and PaaS) requires significant back-end work that can be too time-consuming for small staffs with other responsibilities.

Larger institutions have “time to experiment” with more immersive cloud solutions and can carve out time for staff to focus on this, he said. But at smaller institutions, they may need to hire external help to set up new systems.

Terry said that many liberal arts colleges, for example, have adopted cloud-based admissions systems, but many don’t have cloud-based enterprise resource planning systems, student information systems or financial aid systems. Getting those systems to talk to each other can be tricky.

“This is what every school in North America, in the world, is dealing with -- that integration between tools that may or may not be in the cloud,” said Terry.

Terry plans to move Capital University’s ERP, student information system and financial aid systems to the cloud in the future but for now doesn't have the money to do so. If Terry were to move his ERP system to the cloud, it could cost 50 percent to 200 percent more per year due to expenses such as dual licensing costs, consultant fees, data egress fees and other expenses.

"Oftentimes, the cloud total cost of ownership is only realized after eight to 10 years," said Terry.

An emerging frustration for smaller institutions is that sometimes vendors expect them to have more sophisticated IT infrastructure. Vendors used to working with large institutions can be stumped by issues that arise when working with smaller ones.

“There are some vendors that make things incredibly easy for you, and some that make it incredibly difficult,” Terry said.

Capital University doesn’t have a single sign-on system, which some vendors expect to be in place, said Terry. He added that sometimes meeting a vendor’s requirements is so challenging that “I might as well be installing it in my data center. It’s the same amount of work, the same effort, almost more so.”

Three cloud service models*:

Software as a service (SaaS) -- allows customers to use applications managed by the supplier on a cloud infrastructure, e.g. email, learning management systems, productivity tools.

Infrastructure as a service (IaaS) -- allows customers to deploy their own applications on a cloud infrastructure, e.g. servers, data storage, hardware.

Platforms as a service (PaaS) -- allows customers to provision and manage basic computing resources on a shared platform, e.g. operating system, server software, hosting.

*As defined by Educause here.

In addition to costs, meeting vendor expectations, integrating services, drawing up contracts and finding employees with the right skills are among the top five barriers to cloud adoption at smaller institutions, he said.

Thomas Dobbert, director of information at Truckee Meadows Community College in Nevada, cited cost as one his biggest barriers to employing more cloud services. The college is part of the Nevada System of Higher Education and shares resources with other institutions in the system. Several institutions in the system use the same learning management system, for example, and share licensing costs.

Dobbert said it would have been "impossible" for the institution to pay for these on its own.

Dobbert noted that while it can be easy to transfer data to the cloud, it can be “costly to access and manipulate the data” or remove it once it's there.

“History has taught us it’s never a good idea to put all our bits and bytes in one basket,” he said. Additionally, cloud vendors are subject to mergers and takeovers, he said, and vendors can also choose to end support for applications at short notice. Limited options can also lead to price lock-ins.

“We have experienced situations where a single provider was able to raise prices on the institution, knowing that the institution had no choice but to pay because there was no alternative anymore,” he said.

Dobbert said cloud financing options are sometimes not flexible enough for smaller schools. He described an instance where a programming instructor wanted to set up virtual machines (software programs or operating systems that act like separate computers) with a cloud provider. The vendor would only offer a contract for a full calendar year, but access was only needed for the spring and fall semester -- a total of eight months.

“While everybody understands that the cloud provider needs to make money, it was financially not feasible for us to engage in this kind of contract,” said Dobbert. “We ended up installing virtual machines on our equipment, which was still much cheaper than going with the cloud provider.”

Dobbert estimated that the virtual machines would have cost over $7,000 a month to run on cloud. Running them on the institution's own equipment did not cost anything except the people hours it took to set up, he said. The downside is that students cannot access the virtual machines from off campus, and the free software the institution used has limited functionality. It would be possible to set up a virtual private network so that students could access the resources off campus, "But again, we are not large enough to make that a top priority," said Dobbert.

Dobbert’s cloud strategy is somewhat cautious. He likes to take a “wait and see” approach to new implementations -- often letting TMCC’s larger sister institutions leap first, then waiting to see evidence of an outright benefit before moving forward himself. He's also very concerned about security, and what happens to data that institutions put in vendors’ care. “How many incidents like those at Home Depot, Facebook, Equifax, does it take to realize that cloud computing has serious limits when it comes to the safety of our students’ data?”

Dugas, of Duquesne University, said institutions are sometimes pushed to choose cloud options because they have no other choice. Sometimes vendors stop offering support for on-premises solutions, switching their focus to cloud-based services that allow them to charge a monthly maintenance fee rather than one up-front fee, he said. This shift from capital to operational costs can present a budgeting challenge for institutions.

Dugas described Duquesne as an “opportunistic” cloud organization -- opting for cloud services when it makes sense but not “urgently pushing” to move to cloud when there isn’t a problem with the existing system.

Joseph Vaughan, CIO at Harvey Mudd College, a small, private liberal arts college in California, said that his institution has been “pushing toward a ‘cloud-first’ approach for many years.” This approach is one of several that was described in a seven-part web series from Educause called Preparing the IT Organization for the Cloud. Vaughan, Dugas and Terry are among the co-authors of the online report.

Though there are institutions that have taken a cloud-first approach, including the  University of Notre Dame, Harvey Mudd seems to be somewhat of an outlier among smaller institutions. In addition to cloud-based SaaS, the institution also has IaaS and PaaS.

A few years ago, the college started creating "hybrid" positions where employees spend two days a week working to implement cloud services, with a view to moving them into this role full-time. A staff member recently moved from a user-support role to a new cloud computing specialist position, Vaughan said.

Harvey Mudd College is part of the Claremont Colleges -- a consortium of liberal arts institutions that share some centralized university services. While HMC pays for some cloud services like Microsoft Azure and Office 365 on its own (around $60,000 per year), the cost of the ERP system is shared by the consortium. Although Vaughan said there are likely areas where other Claremont Colleges are farther along in their cloud journey, his college took steps earlier than the others.

“We’re definitely helped by the fact that we are a STEM institution with few departments and a focus on high autonomy and interest in technology,” said Vaughan. “We may also be more accepting of perceived risk.”

Dugas said the cloud is the future for higher ed. “Everyone has seen the writing on the wall, but the real challenge for all of us is finding the time, money and resources to make it happen.”

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