Could Cloud Computing Cost More?

April 16, 2009 / G C Network /

AFCEA: Cyberspace at the Cross Roads

By G C Network | December 1, 2009

Starting December 2, 2009, the Armed Forces Communications and Electronics Association (AFCEA) will be putting on a two-day cyberspace conference. Titled “Cyberspace at the Cross Roads: The Intersection of Cyber,…

“Cloud” Shows Promise during Navy Trident Warrior

By G C Network | November 17, 2009

Last month as part of the Navy’s annual Trident Warrior exercise, Dataline, LLC successfully demonstrated that a standard shipboard communications infrastructure could be used to manage a commercial cloud infrastructure-as-a-service…

Government Cloud Computing Value Survey

By G C Network | November 15, 2009

As part of a continuing Government Cloud computing education program, Dataline, LLC has released a Government Cloud Computing Value Survey. This online resource has been designed as an aid to…

“Hyper-Standardized” Cloud Computing Environment a Plus for DISA

By G C Network | November 9, 2009

Henry Sienkiewcz, DISA Computer Services Technical Director, credits the cloud computing “hyper-standardized” environment for the improvement they have been able to deliver through their cloud computing initiative. During remarks at…

Army Deputy CIO Cites Army/DISA Cloud Computing Partnership

By G C Network | November 8, 2009

This week’s Federal Executive Forum taping highlighted collaboration between DISA and the Army on the service’s transition to cloud computing. Army Deputy Chief Information Officer Mike Krieger called it a…

Navy CIO Discusses Cloud Computing

By G C Network | November 6, 2009

During this week’s Federal Executive Forum taping, Navy CIO Robert Carey discussed his views on cloud computing. Stating that the NGEN and CANES (Navy Consolidated Afloat Networks and Enterprise Services)…

DoD, DHS and FBI Highlight Identity Management Interoperability

By G C Network | October 25, 2009

During this week’s Federal Executive Forum, key decision makers from DoD, DHS and FBI highlighted identity management interoperability as their key priority for 2010. Panelist included: Robert Mocny, Acting Director,…

EuroCloud Launches !!

By G C Network | October 22, 2009

Congratulations to Pierre-Jose Billotte for the successful launch of EuroCloud !! Established as a pan European network, EuroCloud are communities that represent a knowledgeable network of companies engaged local and…

Government Cloud Economics

By G C Network | October 17, 2009

In the The Economics of Cloud Computing, Gwen Morton and Ted Alford have published an EXCELLENT economic evaluation of the federal government’s push to cloud computing. Anyone interested in this…

Deputy CIA CIO Newest Ulitzer Author

By G C Network | October 13, 2009

Jill Tummler Singer, Deputy Chief Information Officer at the Central Intelligence Agency (CIA), is now a Ulitzer author. Appointed in November 2006, Ms Singer is responsible for ensuring CIA has…

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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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



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