Could Cloud Computing Cost More?

“Cash for Clunkers” Should Have Used the Cloud!

By G C Network | August 24, 2009

Rich Bruklis wrote an excellent essy on how the government missed a perfect opportunity to use cloud computing. In “Cloud Opportunity Missed” he writes: “It appears that the voucher system…

US Navy Experiments With Secure Cloud Computing

By G C Network | August 20, 2009

This week in San Diego, CA the US Navy held the initial planning conference for Trident Warrior ’10. The Trident Warrior series is the premier annual FORCEnet Sea Trial Event…

GSA To Present On Cloud Initiative at NCOIC Plenary

By G C Network | August 13, 2009

A General Services Administration (GSA) representative is now scheduled to provide a briefing on the agency’s cloud computing initiative during a “Best Practices for Cloud Initiatives using Storefronts” session on…

FAA CIO Focuses on Cybersecurity

By G C Network | August 12, 2009

During this week Federal Executive Forum, FAA CIO Dave Bowen mentioned protection against software vulnerabilities, wireless intrusion and website vulnerabilities as his top cybersecurity priorities. As the Assistant Administrator for…

DHS Asst. Secretary Addresses Cybersecurity Priorities

By G C Network | August 11, 2009

Greg Schaffer, Assistant Secretary for CyberSecurity & Communications for the US Department of Homeland Security, sees Trusted Internet Connections, EINSTEIN, and front line defense of the nation’s networks as top…

US DoD Chief Security Officer on Cybersecurity Priorities

By G C Network | August 10, 2009

In a Federal Executive Forum interview, Robert Lentz, Chief Security Officer for the US Department of Defense, highlighted the departments cybersecurity priorities. Mr. Lentz is the Deputy Assistant Secretary of…

Twitter Under Denial of Service Attack

By G C Network | August 6, 2009

Multiple sources are reporting that Twitter continues to be under a denial of service attack. Some are speculating that this represents the power of a coordinated bot network attack. For…

NCOIC Holding Full Day Cloud Computing Session

By G C Network | August 5, 2009

The Network Centric Operations Industry Consortium (NCOIC) will be holding a one-day cloud computing session during its plenary meetings, 21-25 September at the Fair Lakes Hyatt in Fairfax, VA. A…

Sevatec a New Player in the Federal Cloud Computing Market

By G C Network | August 3, 2009

Just in time for the new Federal Cloud Computing Storefront, Sevatec, Inc. is announcing the development of a toolkit to help federal agencies transform their enterprise architectures to cloud computing…

GSA Releases Cloud Computing RFQ

By G C Network | July 31, 2009

Following through on a much anticipated action, GSA released their Cloud Computing Request For Quotation (RFQ) today. Cloud computing is a major part of President Obama’s reform effort and this…

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