Cloud Computing Too Costly in the Long Term?

“The story came out today from Computerworld UK, which I invite
you to read. It gives good coverage of the presentation made at the
Summit by Matthew McCormack, Consultant, European Systems Group,
IDC. Lots of good quotes. I wanted to see the numbers, though, and
while looking to contact McCormack, I found just the information I
was looking for.

“IDC ran a model that analyzed what the costs would be to run
100 percent of a large company’s IT infrastructure entirely within
the cloud versus on their own data center. It turns out that
according to IDC’s estimates, after the first three years of a
cloud IT operation, costs would exceed those of an optimally run
datacenter, and that includes the added three-year refresh cycles
costs of 30 percent for the datacenter (see slide 6). By the end of
10 years, costs for the cloud operation would hit £26M
(US$41M), while the datacenter would only rack up £15M
(US$24.6M).

“Of course, if your datacenter is being run very poorly, cloud
computing can save you short- and long-term money (slide 7).
Datacenters could reach as much as twice the cost of a cloud over
ten years.”

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