Why Cloud Computing Is Right for 2009

January 10, 2009

The Standard ran Kathleen Lau’s ComputerWorld Canada story “Seven Reasons Cloud Computing Works in a Touch Economy” here. Most of the points are spot on. However, I was taken aback by the financial points: Lower up front costs, reduced financial risk, lower capital expense, and lower operational expense. On the surface, each of these points seem logical. But if one thinks about the generalization, the cost assertions may not work. A couple of quick examples:

First, a company shifts data and apps to the cloud. The vendor’s system craps out when a key proposal must be generated. The client loses the contract. This type of problem is tough to budget, so most people ignore the issue until it occurs. Those costs can be direct or time shifted. In order to prevent a single vendor from dropping the ball, additional money and effort are required to create a hot fail cloud environment.

Second, the notion that operational expenses will fall may also be easy to say but tough to achieve. High end data centers touch the machines and software. The customers don’t. When a system has been customized, the costs of troubleshooting and remediating can be high. In my experience, it only takes a weekend of overtime to blow the operational budget out of the water. Not all cloud apps will work this way, but when one does, the costs can be high indeed.

Finally, any financial assertion about cloud computing has to present assumptions and example costs. Telling me that the tree will cost about $500 to remove can become a $5,000 repair bill if the arborist manages to get the tree to fall on the neighbor’s bass boat.

More detail, please!

Stephen Arnold, January 10, 2009


One Response to “Why Cloud Computing Is Right for 2009”

  1. Taking advantage of a Crisis | Eric D. Brown on January 15th, 2009 12:41 pm

    […] Why Cloud Computing Is Right for 2009 […]

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