Cloud computing has been around for a while now, but it remains a bit mysterious to many in the business world. I was thrilled to have the chance to help well-known tech journalist John Edwards break down some common misconceptions and assumptions in an article for CIO.com.
The article highlights seven common myths including those about security of cloud, how it integrates with traditional IT infrastructure, and how it affects IT jobs. I was quoted in the first section addressing the myth that switching to the cloud is guaranteed to save money. The reality is a bit more complicated.
Does the Cloud Increase or Decrease IT Costs?
When talking about cost of the cloud, I’m wary of sweeping generalizations. Ironically, this can go either way--if someone says: go to cloud, because it’s less expensive than on-prem, or don’t go to cloud because it’s more expensive than on-prem, it should immediately be thought of as suspect. There are scenarios that can make either one of these play out as true.
The truth is that the cloud is quite different than on-prem storage in terms of what it can offer a business. Cost is just one of the dimensions to consider when thinking about cloud. It's also important to look at the context of the overall business strategy. For instance, it may be worth an increase in cost to run workload in the cloud if it enables the realization of business goal. If the main objective is business growth, and business growth depends on the ability to scale up very rapidly, then even if cloud is more expensive than on-prem, it could be a business growth enabler and could be justified as an investment. In addition, there is such a wide variety of cloud providers and services, many different price points--and quality levels--are always available.
This myth is so pervasive because there are scenarios where cloud--even the same cloud--can be either more or less expensive than on-prem. The cost comparison depends on the specifics of the workload and the exact use-case. Here are a few hypothetical examples.
Example 1: Cloud is more expensive
If you implement cloud without governance around approval of spinning up new workloads in the cloud, all of a sudden there will be a ton of new workload running in the cloud that you never had on-prem and your costs will have exploded.
Example 2: Cloud appears to be more expensive, but who really knows?
If the way costs are compared isn’t logically sound, then cloud can easily look more expensive. Did you include the cost of power, real-estate, network, staffing and cost of capital in your on-prem costs? If not, you're not getting an accurate comparison and cloud can appear to be the more costly option when in fact it is not.
Example 3: Cloud is less expensive
Your company is especially weak in contract negotiations and has expensive hardware prices, expensive bandwidth, and your data center is in Connecticut, a state with some of the highest electricity rates. Cloud will likely save you money.
How Can I Know if Cloud is Right for my Business?
Start with business strategy and then evaluate the fit of the technology.
If a cloud decision is made one-dimensionally based on cost, without factoring in the business benefits (or business inhibitors), then you're really just taking a shot in the dark. If cloud is less expensive but gets in the way of business, this is of course a bad outcome. If cloud is more expensive and enables business goals, it could lead to very good outcomes. If the cost of cloud is same or less expensive than on-prem and fundamentally enables business or fits with the business strategy, then you have a real winner.
