Could Cloud Computing Cost More?

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2018 AT&T Business Summit: Security “in” and “of” the Cloud

By G C Network | November 10, 2018

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A group of people standing in front of a display.

My Brush with Royalty: Queen Latifah

By G C Network | November 9, 2018

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By G C Network | November 9, 2018

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5 Reasons Why Ansible is the Best CM Tool Out There?

By G C Network | November 9, 2018

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Machine learning APIs for Google Cloud Platform

By G C Network | November 9, 2018

Google Cloud Platform (GCP) is considered to be one of the Big 3 cloud platforms among Microsoft Azure and AWS. GCP is widely used cloud solutions supporting AI capabilities to design and…

What Is The Most Important Part of Architecture?

By G C Network | November 9, 2018

I always find it interesting to hear what people view architecture as. A lot of people think it’s just about the design aspect, where you get to put pen to…

Cloud migration best practice Part 4: Executing the migration

By G C Network | September 16, 2018

This series has stepped through cloud migration best practices. After providing an overview, we discussed: Classifying business-critical data. Updating organizational IT governance policies. Application screening and cloud workload selection. How to…

Cloud Migration Best Practice Part 3: Application Portfolio Analysis

By G C Network | September 16, 2018

In part three of this series on cloud migration best practice, I will focus on migrating the application itself. If you haven’t had the opportunity to read our recommendations from part…

Why Use Immutable Storage?

By G C Network | September 11, 2018

Data has become a global currency, and its value has nowhere to go but up.  According to The Economist online, the world’s most valuable resource is no longer oil, but…

CLOUD ACT: What Does That Mean for Your Cloud Storage

By G C Network | August 31, 2018

When Congress names a law after you, it’s getting serious.  That is where we are now with cloud computing.  The Clarifying Lawful Overseas Use of Data Act or CLOUD Act (H.R. 4943) is…

In a recent conference, analyst William Forrest says that large companies could end up paying more than twice as much by using cloud based services. According to a Forbes.com report, Deflating The Cloud, a study focused on a McKinsey & Co. financial services client showed that the financial firm would be paying 150% more for cloud-based services versus owning the infrastructure.

“Much of cloud computing’s misplaced hype, contends Forrest, comes from the assumption that businesses that make the switch will be able to do away with their entire IT department, an expensive collection of personnel. But in his analysis of McKinsey’s financial services client, Forrest found that only around 15% of the company’s 1,700 or so IT employees had hands-on access to hardware and software–most worked in support or other administrative areas. That means moving to Amazon’s service would only cut about 200 full-time workers, hardly the savings chief information officers might imagine.”

Others, including Amy Wohl leading analyst at Wohl Associates, disagree arguing that Forrest’s analysis leaves out the value of avoiding large capital outlays and ignores the flexibility inherent in cloud computing.

This is actually a good debate. The economic value of cloud computing needs to be studied carefully. Cloud computing is not the answer to all IT ills and if this market is to be successful, both the pros and cons must be well understood.

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G C Network

1 Comments

  1. James Colgan on April 17, 2009 at 8:48 pm

    We have to get away from the hype (and single company data samples!). Not all companies or applications should move over to the cloud. If you’re delivering more value, you should be charging more. Let’s keep the discussion rational and objective. See more on this discussion as it relates to a particular vertical – electronic design: http://tinyurl.com/cxfmuu