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Cloud Computing Too Costly in the Long Term?

Oct 20, 2009, 12:32 (2 Talkback[s])
(Other stories by Brian Proffitt)

"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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