Demystifying Cloud - Is Cloud Expensive?
Posted 25 March 2013 by Anthony Green
In a recent blog post “What does Cloud Computing Actually Mean?” I alluded to some of the advantages that Cloud based infrastructures offer over and above traditional on-premise solutions –flexibility, increased security, business agility, and practicality in respect of predicting future costs. This latter category is one which often provokes debate – mostly based on the assumption (and hype from some Cloud Providers!) that the cloud should be “cheaper” – so is it?
I’ll be honest, I don’t really like this question – I think it misses the point (and not just because ‘on paper’ Cloud can appear more expensive at the outset). Adopting Cloud is rarely a cost-saving exercise, and when it becomes one, it can be difficult to demonstrate ROI as tangibly as you can with (for example), an on-premise virtual offering. To use an old adage; it’s like comparing Apples with Oranges…
Take Blue Chip’s Infrastructure as a Service (IaaS) platform as an example. We’ve leveraged best of breed technologies in the form of HP, Cisco, EMC, and VMware based on our own, long-term experience and confidence with the products. We have access to a substantial pool of infrastructure which we can securely multi-tenant and make available to our Cloud Service customers -who in turn benefit from significant economies of scale. Could you deliver a similar solution on-premise? Of course, but for many organisations the investment associated with attaining the same level of resiliency is out of reach, or difficult to justify.
Of course, you can factor in the “real” cost savings that can be had from moving your equipment off-site – re-gaining valuable office space, a reduction in power consumption and cooling costs, an easier avenue to highly resilient power and communications… not to mention the benefit of having more ready access to technical resources in the event that something goes wrong. The problem? These are often difficult values to quantify.
So how can Cloud Computing be justified from a cost perspective? For me, it boils down to a couple of salient points:-
Unlike an on-premise deployment where infrastructure has to be sized on a “possible needs” basis from day 1, an organisation can deploy & pay for what they need as they go – allowing IT to escape from the traditional 3 or 4 year capital expenditure cycle into a model which aligns with Operational Cost. In effect, it’s not so much what you are paying for, as what you are not.
Instead of considering asking how much it costs, consider the value that Cloud Computing can create. The value of a Cloud Platform can go beyond the Operational Costs associated with it – the ability to do things that were previously impossible, or the agility that comes from a platform which scales/contracts as needed. Cloud can be a core component of organisational strategy, moving IT beyond the “required resource” that many businesses have come to expect.
So, is Cloud Computing more expensive? Maybe, maybe not. Ultimately this is likely to be a judgement call more than an exact science. My advice though? Try to move beyond the cost of Cloud Infrastructure, and instead into the value that it can bring!
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