Thursday, March 12, 2009

What Costs Get Saved When Going to the Cloud?

Really, do you or your clients know?
Would you be able to provide a valid and true number, or at least a reasonable estimate?
Is Google/Microsoft/IBM or "Fred's Cloud" really a cheaper more efficient solution?
On what do you base this?

Ed Brill's post
had some comments which I was going to reply, but instead wanted to expand my answer.

What is really being saved is the question of course.
No company stops needing their telecom, wiring, firewall, routers etc just because they go to the Cloud. In fact one could argue some of these INCREASE.
Nor do they stop needing their administrators or help desk or support staff. Although you may be able to drop a few people or move them to a different project, they can't all be user/password admins.

Possibly the costs of some hardware(the onsite servers), SAN/Drive space and some related items, plus NOS cost and licenses, and their support/maintenance contracts are what is saved by going to the cloud.

What other costs are there you ask that could get saved? Backup solutions and costs, archiving, spam filters, antivirus which all have fees or maintenance.

Need more? Electricity, Real Estate/Data Center Space, A/C requirements.

Still need more reasons? Leave some in the comments.
What am I missing or not thinking of right now?

I will put together an ROI for it all once I have inputs from everyone.

There is no price for headaches, they are priceless. Going to the cloud may limit the ones you feel today, but will create other ones potentially even greater or worse. (Worse would be when Fred's Cloud goes under)


  1. Keith,

    I have loads of cloud experience from an application perspective. Feel free to ping me offline. You may be surprised about a couple of things.

  2. We're looking at the cloud for dev and test environments. Why pay a data center for 24/7/365 hardware and services for dev and test environments that are only actively used 10% of the year?

  3. Dave, Excellent point! We currently host a few dev environments for clients.
    Wasn't thinking about that, this was more about production. But when you include this it also looks good too.

  4. Server costs, storage costs, backup costs, staff costs -- for universities who are being asked to provide lifetime email accounts for their alumni and more storage space for their current students. When the cloud (namely Google and Microsoft) show up and say we'll give this to you for free (to universities, colleges that is), it is very tempting. Many, many, many universities and colleges are making this choice.

  5. I'm blown away by Dave's comment. Brilliant idea that we have completely overlooked so far.

    I think there are some savings on the human resource side as well - e.g. maintaining education leves for admins, not to mention the admins themselves.

    But one thing I have found challenges the cloud concept a bit: Records Management! How can you handle archiving, retention and cassation rules in a hosted environment?

  6. Lars, you and me both! I wonder about this as well. If you get sued, who handles the finding of files or ensures nothing gets wiped away?

    Marie, You are correct and I did point these out in my posting. Universities however also are trying to save their hides as tuition enrollment is down, costs are higher yet more and more people do not see the benefit of standard education any more.

    So yes in theory it may be cheaper for the short term, but it will not stay that way. Once larger files kick in and extra costs get associated with disk space usage maybe it will not be so cheap anymore. unknown today.

  7. I'm intrigued by Dave's point too...a wonderful idea, especially for startups!
    I've been working with email long enough to know that what goes around comes around so..maybe what goes into the cloud comes out of the cloud? So maybe email migration - a job for life? ;)