Budgeting and Cloud Economics

Abstract

How much value does the CIO’s IT shop deliver? This is the most common debate on whether an organization can or should move to the cloud. Cloud economics is the evaluation of cloud costs compared to on-premises costs. Certain aspects of both are hard to determine but are usually quantifiable. For example, what does an administrator’s time cost? We can determine that from their pay. What’s the cost of the datacenter’s square footage? Is the insurance or rent factored in? Can you recoup those costs if the datacenter is eliminated? Are your electric and water bills going to decrease because the workloads in the datacenter moved to the cloud? Is the virtual infrastructure you have provisioned utilized 24/7? Can you spin down the physical infrastructure when the virtual infrastructure is not using it? These are just a few of the questions that go into cloud economics.