Could Cloud Computing Cost More?

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By G C Network | August 30, 2018

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Cloud Migration Part 1: An Overview

By G C Network | July 17, 2018

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By G C Network | July 12, 2018

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A Path to Hybrid Cloud

By G C Network | May 31, 2018

Cloud computing is now an operational reality across every industry.  Organizations that fail to leverage this economic, operational and technology consumption model are merely consigning themselves to irrelevance.  The rapid…

Human-Led Collaboration with Machines

By G C Network | May 29, 2018

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Sensomorphic

By G C Network | May 28, 2018

240 million results are returned in 1.06 seconds (as of May 28, 2018) when you search for cloud computing in a Google search. With that much information available, and that many…

Artificial Intelligence and the Project Manager

By G C Network | May 25, 2018

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Building A Collaborative Team

By G C Network | May 18, 2018

Recently, Harvard Business Review cited some insightful research into team behavior at 15 multinational companies. It found that although these teams tended to be large, virtual, diverse, and composed of…

Welcome the New Project Manager!

By G C Network | May 18, 2018

According to CIO.com, the six traits of highly effective project managers are: Be a strategic business partner who can offer higher-level strategic leadership skills, not just technical management skills, provide…

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