IT Execs Seem Convinced of Cloud's Cost Effectiveness

Ann All

I am mildly shocked at some of the numbers contained in a recent survey about cloud computing, conducted by Applied Research West for vendor F5 Networks. According to the survey, 66 percent of IT managers have money in their budgets for cloud computing and 71 percent expect funding for cloud computing to grow over the next two years. Eighty-two percent said they are testing, implementing or using public clouds. A like number said the same about private clouds.


I find this interesting, since not all the respondents even agree on what constitutes "cloud computing." Apparently, most think software-as-a-service qualifies, three-quarters believe platform-as-a-service is a form of cloud computing, and 60 percent identify infrastructure-as-a-service as cloud computing.


Putting aside the confusion over definition, cost control is a huge driver for the cloud. Sixty-eight percent of respondents say public cloud computing reduces capital costs. Seventy-seven percent of respondents cite efficiency gains from using public clouds instead of further building out internal IT infrastructure, and 61 percent say the cloud eases staffing issues. I'd say both infrastructure and staffing go back to cost. In theory, the cloud saves you from shelling out bucks for additional servers and staff members.


I say "in theory" because no one really seems to know whether the cloud is more cost effective than on-premise infrastructure and applications over time, a conclusion I reached in my post "No Clear Forecast for Cloud's Cost." (I know. I really need to get my addiction to cutesy headlines under control. Is there a 12-step program for this?)


The pricing question gets even trickier as cloud providers try to lock in customers with cell-phone-plan-like subscription models, a trend noted by both Dion Hinchcliffe (on eBizQ) and David Linthicum (on InfoWorld). The real key to the cloud is value, not cost. Writes Linthicum:


In the world of cloud computing, value has far more dimensions than just the per-hour cost of a cloud computing provider. Indeed, you could pay 20 times more per hour for a particular provider and get a better deal than with a cheaper competitor once you factor in the efficiencies the "costlier" provider brings to your enterprise.


Linthicum recommends evaluating your computing requirements at many levels -- including application development, deployment, database, and operational -- before determining if cloud computing can add value in any of those areas. Keep in mind there are likely some enterprise functions for which the cloud (a public one, anyway) won't be the logical answer. As Jonathan Bryce, co-founder of Mosso, the cloud computing division of Rackspace, told me when I interviewed him for a story on cloud computing, "In the Cloud, Process and Budget Questions More Thorny than Tech":


Every layer of the cloud, down to the infrastructure component, is commoditized in some way. With something like an Oracle database, where you need a specific rack cluster, specific storage, specific configuration for a database server and specific network gear, that's not going to work. You can't specify all of that when you deploy in the cloud.

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