Vendors tend to emphasize the new and glamorous

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Unformatted text preview: ainst online threats. Vendors tend to emphasize the new and glamorous pieces of their portfolios. However, the real world moves more slowly: businesses are faced with S TRAIGHTTALK I T 11 Cloud computing costs in perspective LAURENT LACHAL M ost cloud strategies have an initial focus on cost reduction or improved cost efficiencies, for two main reasons: the global recession, and the failure of many on-premise IT investments to deliver the cost savings they were supposed to. Cutting costs is easier said than done, as cloud computing may lead to some cost reductions but introduce complexities of its own for users. Public clouds have attractive cost characteristics The cost advantage of public cloud services is based on the economies of scale achieved in large (often brandnew and state-of-the-art) data centers that underpin public cloud services. Public clouds also do away with upfront (hardware and software) costs via subscription and pay-asyou-go (PAYG) pricing and licensing models. Lower upfront and ongoing costs make it easier to correlate the benefits of using the software with the cash flow required to invest in that software, reducing the perceived risks attached to the project. They also result in faster time-to-benefit for each of the projects that public cloud services underpin. On the other hand, because of long-term costs and, more importantly, migration costs, many enterprises remain wary of public cloud services. Deciphering migration costs is difficult as it requires knowledge of internal resources, interdependencies, and complexities that many do not have. Practical considerations trump economics when it comes to public clouds Companies are not turning to public cloud services because these are necessarily cheaper than the solutions they 12 S TRAIGHTTALK I T currently use. Instead, many are choosing this option because public cloud services enable them to do what they would not have been in a position to do otherwise, faster and with fewer risks. PAYG and subscription approaches may be more expensive in the long-term, but in the meantime enterprises can use the upfront and operational savings to focus on projects that can make a difference at the business or IT leve...
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