One of the most appreciable parts of the cloud economics discussion is the profiling of real money versus assumed risk. Supporters of cloud computing will have problems when it comes to making business case for the cloud if they are not aware of the amount of real money they will be able to save for their enterprise by taking their business to the cloud (in other words, need to know the real ROI before making a decision).
Best guess is that cloud computing is less expensive. Indeed, the guess is true as cloud computing is less expensive when you compare it with the other computing systems. However, the problem is always how one will be able to explain that cloud computing is cheaper. The cost of a data center is categorized into two, which are direct and indirect cost, as well as the issues associated with floor space, power, and IT operation, storage, scalability, network and other issues. Before deciding on the cost of cloud computing, you will need to determine the above mentioned data center issues in financial terms. Looking at the other side of the coin, it is obvious to know that cloud-computing services are priced per GB per month, using only bandwidth usage as the only associated cost, without considering (at least for the user) any of the data center mentioned above.
In order to build a case for saving of real money in the cloud, appropriate cloud based data storage usage should be defined. In addition, it is important to note that some data are suitable for storage in the cloud while others are not. In order to make effective business case for tiered cloud storage in monetary terms, the following questions must be answered:
What are the performances needed for storage of certain category of data?
In terms of platform construction, deployment, application, time required for completion and compute rates, what are the needed performance requirement?
In creating and deploying application in each platform, what are monetary cost and the specific resource requirements?
It is possible to use cloud computing platforms along side with local offsite systems so as to enhance effectiveness of cost?
The compliance for security is automatic in the cloud, and legal discovery is known to be made easy. Therefore, one should not look down the real money savings just by avoiding legal actions and improved compliance to legal mandates. With all these being said, it is vital to make clear that infrastructures and cloud services need to be monitored constantly. Though cloud services can be helpful in up-front cost of enterprises through dispersal of the expenditures over the period which may be months and even years, it is important for CIOs to be watchful so as to avoid creeping in pricing services known as “pay as you go”. The company will find it difficult to reduce the costs, as well as maintain their storage in the cloud at low and economical rate if they do not remove unwanted data to create space on their device.
