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Lexalytics Recommends Some Firms Leave the Cloud

While many published reports discuss continuing growth of companies using cloud services, Lexalytics has launched a "Get Out of the Cloud" campaign. "About a year ago, we started seeing many of our customers moving from the cloud to on-premises software," says Seth Redmore, Lexalytics chief marketing officer. "So we talked to them to find out why. It was economics, latency, and control."
By Phillip Britt - Posted Apr 27, 2018
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While many published reports discuss continuing growth of companies using cloud services, Lexalytics has launched a “Get Out of the Cloud” campaign.

The effort is designed to encourage existing and prospective customers to transfer their existing public-cloud Semantria implementation to its Salience on-premise offering, or from competing cloud APIs to the Lexalytics Intelligence Platform (Salience or Semantria). Participating customers will receive free migration and tuning services.

According to Lexalytics, Dropbox’s 2018 IPO filings reported huge success from their on-premises move. WhatsApp is planning to leave IBM’s public cloud in favor of a Facebook data center. These companies are changing because the cloud is no longer the best solution for them.

Other mid-size and larger companies are also finding that on-premises solutions offer better economics and control than cloud services, according to Lexalytics.

“About a year ago, we started seeing many of our customers moving from the cloud to on-premises software,” says Seth Redmore, Lexalytics chief marketing officer. “So we talked to them to find out why. It was economics, latency, and control.”

While the overall market for public cloud services continues to expand, Lexalytics’ on-premise Salience deployments are growing at twice the rate of its public cloud, software-as-a-service (SaaS) offering, a marked contrast from previous years.

While cloud services make sense for small companies and for businesses that use only a small amount of services, the economics of on-premises solutions make more sense once needs get to a certain size, according to Redmore. “When you are just looking for convenience, the cloud is the right place. When you start dealing with more than 10 million documents a month, it’s a lot cheaper to own your own iron.”

When dealing with that many documents, the latency of cloud services can also be an issue, according to Redmore.

He adds that if a company is looking for ancillary services, the cloud is likely the best option, but if the technology is used for the company’s core competency, an on-premises solution is likely best.

“The economics of the cloud still makes sense for a lot of applications,” Redmore says. “If it’s a new app or if you’re a new company and don’t want to buy servers, keep it in the cloud. Once you get to a certain scale, it makes sense to bring it in-house.”

According to Lexalytics, ideal customers to “Get Out of the Cloud” include:

  • Companies in heavily-regulated industries such as healthcare and financial services;
  • Companies where data security is the primary consideration, or where some content is too sensitive to process through third-party servers and must be handled in a customer’s own data center;
  • Companies that are sensitive to latency; cloud is approximately 200 milliseconds, whereas on-premise is approximately 5-10 milliseconds.

Conversely, ideal customers for the cloud are:

  • Companies new to text analytics and NLP;
  • Teams of enterprise users looking to gain quick insights;
  • Companies processing highly-fluctuating volumes of data, making it hard to provision the right amount of hardware;
  • Companies handling lower volumes of text;
  • Companies whose business model mandates public APIs.

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