What the Cloud Really Costs: Do You Know?

14 ways CIOs under estimate the costs of cloud computing

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Joe Weinman, a Hewlett-Packard executive who is one of HP’s chief spokesmen on cloud computing, predicts a more gradual transition. “I do believe most IT will move into the cloud for consumers and SMBs,” he says. On the other hand, large enterprises have enough systems-management discipline “that the idea that a cloud provider would achieve better, meaningful economies of scale is difficult for me to believe.”

For large enterprises, using a public cloud infrastructure will make sense in special cases, such as when they could profit from renting a large number of computers for a short period to run an intensive calculation quickly, Weinman suggests.

A big company also might use cloud services as a hedge against uncertainty in case a fast-growing new product or business unit stalls, Weinman says. “While you’re growing, it’s easy to say you should just buy servers and keep deploying them. But if you do enter into a period of decline, those assets are like concrete shoes.”

Costs That Lurk in the Cloud

Dirst and Bolick agree that cloud computing also can have hidden or unanticipated costs. Bolick says he underestimated the cloud server capacity he would need to achieve an acceptable level of performance because he made the mistake of treating cloud servers as the equivalent of physical servers.

Because a cloud server actually represents a virtualized slice of memory and processor resources from a pool of servers, its performance may not match what you would expect from a dedicated server in your data center or a co­location facility.

“If I was doing it again, I would essentially overengineer the environment in the cloud. Then, once I had the system stabilized, I would downsize it from there,” Bolick says. “Of course, one of the beauties of the cloud is we were able to ramp up quickly,” correcting the performance problem in a few days.

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