Thursday, April 23, 2009

Cloud computing or Datacenter Virtualization?

Just to show I am not biased on Cloud computing, here is something for the other side of the fence.

The Register article: McKinsey Cloud report discusses a recent report by McKinsey (Clearing the Air on Cloud Computing) which looks at the benefits of running your own datacenter versus outsourcing it into the cloud. According to the report the cost of using the cloud is more than double that of your own datacenter. 

The crux of the matter is, that the labour savings, cost of running the hardware, managing the devices, owning software licenses, is balanced up against the cost of managing an additional supplier relationship, re-designing solutions  to the cloud environment, migrating data between cloud providers for inevitable changes. At the end of the day, based on Amazon's Web Services prices McKinsey sees that physical hardware systems in your own datacenter are cheaper at $150 a month against $366 per unit. And that gap will widen with the gains available for datacenter virtualization.

So Cloud solutions need to get a lot cheaper before they are the most cost-effective solution. Of course there are many other reasons to go for the cloud - but it wouldn't be the cheapest option for in-house systems that are running happily today.

See ZDNET: Is adopting the Cloud a money losing mistake for another look at the McKinsey report

1 comment:

Bena said...

Yes, thanks for sharing info on cloud computing and its technologies. I have gathered some important information about Cloud Computing through the conference Cloudslam 2009 that was the world's largest and first annual virtual conference on cloud computing. That was a wonderful experience which I never had before.