Why We’ll Gladly Pay More to Compute in the Clouds

The idea that public cloud computing is cheaper than traditional forms of IT staging, such as on-premises data center and co-location, may have had legs in the early days of cloud’s buzz, but the truth has finally been widely recognized: cloud computing isn’t at face value cheap, or cheaper, than what we’ve been doing up until now.

If that’s the case, then why is cloud catching on?  Isn’t the ultimate goal to lower cost and boost the bottom line, regardless of one’s business?

The effects of moving to the cloud have a much broader impact than simply relocating one’s IT assets to an alternative hosting arrangement.  I think of it in much the same way that the value proposition of virtualization has been slowly, but fully realized over the years.

In its early days, x86 virtualization was seen purely as a means of improving hardware utilization by increasing the application-to-box ratio.  “Consolidation” was the easy win, and it appeared to lower IT expenses because it reduced the hardware budget.

But time revealed that virtualization has a hidden price associated with increased management cost, the most famous being “VM sprawl.”  But by the time this became apparent, the really valuable capabilities of virtualizaton began to take center stage: live migration, rapid deployment, portability of workloads, dynamic resource allocation. Roll them into one term, “flexibility”, and you see why there is more value to virtualization than just bottom line IT costs – it enables the overall business in new ways that were not possible or practical before.

Cloud computing is entering that phase of public awareness where its true benefits are being appreciated. The flexibility ascribed to virtualization also applies to cloud.  But there are others, such as: disaster recovery, capacity on demand, carrier-grade reliability, expense-structured payment, and global reach. The value of these are not reflected in the bottom-line cost of the monthly bill.  They are woven into the business’s new abilities related to agility and simplicity.

So the old rule holds true: only things that improve the bottom line will survive in the B2B marketplace. Cloud computing obeys that law by bringing new value to the table in ways not possible prior to its advent.  Although we’re still learning how to exploit these new capabilities, and to quantify their considerable untapped benefit, there’s no doubt the value is there, and worth the additional cost.


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