{"id":2247,"date":"2011-07-13T07:00:56","date_gmt":"2011-07-13T15:00:56","guid":{"rendered":"http:\/\/www.formtek.com\/blog\/?p=2247"},"modified":"2011-07-13T07:00:56","modified_gmt":"2011-07-13T15:00:56","slug":"economics-of-cloud-computing-when-does-moving-to-the-cloud-make-sense","status":"publish","type":"post","link":"https:\/\/formtek.com\/blog\/economics-of-cloud-computing-when-does-moving-to-the-cloud-make-sense\/","title":{"rendered":"Economics of Cloud Computing: When Does Moving to the Cloud Make Sense?"},"content":{"rendered":"

Moving IT operations to the cloud saves money when compared to using on-site computing facilities. \u00a0That’s a premise that’s increasingly believed, but the truth of which actually depends on a number of parameters. \u00a0A group of academics <\/a>from the Pennsylvania State University\u00a0looked at the economics of cloud computing and concluded that cloud computing currently makes the most sense economically for small businesses and applications with small workloads.<\/p>\n

The researchers divided costs into categories of being “quantifiable” and “less quantifiable”, and “direct” and indirect. \u00a0Given this division, they constructed a matrix showing the classification of various costs.<\/p>\n\n\n\n\n\n\n\n\n\n
<\/td>\nDirect<\/td>\nIndirect<\/td>\n<\/tr>\n
Quantifiable<\/td>\nHardware (Server and Storage)
\nSoftware (OS and Database)<\/td>\n		Shared Rack Storage
\nNetworking Infrastructure<\/td>\n<\/tr>\n
Database and Operating System Maintenance<\/td>\nStaff Salaries<\/td>\n<\/tr>\n
Electricity used by Servers
\nCloud Usage Charges<\/td>\n		Cooling and Lighting costs<\/td>\n<\/tr>\n
Less Quantifiable<\/td>\nSoftware Porting<\/td>\nSecurity vulernabilities<\/td>\n<\/tr>\n
Application Migration<\/td>\nPerformance Charges<\/td>\n<\/tr>\n
Application Complexity<\/td>\nTime Delays<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The report considered the two option of pure in-house and pure cloud-based hosting, but it also considered combinations of the two approaches, which it termed as “hybrid” options. \u00a0In the hybrid model, they identified vertical partitioning and horizontal partitioning. \u00a0With vertical partitioning an application might be split so that part of it reside on-premise and another part of it resides in the cloud. \u00a0Horizontal partitioning replicates some parts of an application in the cloud and, as load on the application increases, usage can burst or spill over onto servers running in the cloud.<\/p>\n

The report found that ”\u00a0(i) complete migration to today\u2019s cloud is appealing only for small\/stagnant businesses\/organizations, (ii) vertical partitioning options are expensive due to high costs of data transfer, and (iii) horizontal partitioning options can offer the best of in-house and cloud deployment for certain applications.”<\/p>\n

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Moving IT operations to the cloud saves money when compared to using on-site computing facilities. \u00a0That’s a premise that’s increasingly believed, but the truth of which actually depends on a number of parameters. \u00a0A group of academics from the Pennsylvania…<\/span><\/p>\n

Read more ›<\/a><\/div>\n

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