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Cloud Computing: Nimbleness Wins Out Over Costs
There’s a lot of ways that businesses can save money by moving to the cloud. The ability to scale up or down means that you only need to pay for the servers and services that you actually use. There is no upfront cost to get started and no server maintenance cost. Fewer IT support staff are required. Your electricity bills are lower and without the need for dedicated cooled server rooms, more physical space is freed up.
You would think that with all those potential cost advantages that there would be significant cost savings with the cloud compared to on-premise. Unfortunately, while the potential is there, the reality doesn’t match up for many cloud customers. Cloud IT spend and cost overruns was cited as a significant challenge by 59 percent of businesses using the cloud.
A survey by Arlington Research found that 82 percent of companies are spending more than they need to on their cloud computing services.
David Linthicum comments that “this “cloud isn’t so cheap after all” conclusion is the dirty little secret of Silicon Valley right now, backed by a decade’s worth of data.”
A PwC white paper found that “the bad news: Few companies are positioned for the cloud to fully deliver on its exceptional promise. There is a gap between possibility and reality.” That gap goes beyond just cost savings. PwC says that there is a major gap in expectations and actual implementations. PwC calculates an average 53 percent value realization gap.
But despite issues with cost and with disappointment in implementations, things are changing for the better, but maybe just not as fast as people were led to believe they would by the hype.
Linthicum said that “using the public cloud was never about ops savings—at least, it never should have been. The core value of the cloud is, and has always been, improved speed of change. Speed to change applications and data, as well as to build and remove core business systems.”
