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Cloud Computing Costs and Benefits

An IT Management Point of View

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Cloud Computing and Services Science (CLOSER 2011)

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Abstract

Although cloud computing is in all mouth today it seems that there exist only little evidences in literature that it is more economical effective than classical data center approaches. Due to a performed qualitative analysis on COBIT, TOGAF and ITIL this paper postulates that cloud-based approaches are likely to provide more benefits than disprofits to IT management. Nevertheless one astonishing issue is the not often stressed ex ante cost intransparency of cloud based approaches which is a major implicit problem for IT investment decisions. This paper presents considerations how to estimate costs of cloud based systems before they enter their operational phase. This is necessary in order to make economical IT investment decisions for or against cloud computing more objective.

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Notes

  1. 1.

    System design and development is not covered by this paper.

  2. 2.

    This is mainly due to tasks which are necessary for cloud-based or classical business information systems governance, design, development or operation as well.

  3. 3.

    SaaS—Software as a Service, e.g. SAP BUSINESS BYDESIGN; PaaS—Platform as a Service, e.g. Google Apps.

  4. 4.

    See [12–14] for a definition of SaaS or PaaS.

  5. 5.

    IaaS—Infrastructure as a Service, e.g. Amazon EC2 (see [12–14] for a definition of IaaS).

  6. 6.

    Which are cloud vendor independent.

  7. 7.

    The billing of Amazon Web Services and Google App Engine was analysed intensively but the derived findings stay valid for other cloud service providers like Rackspace.com, Salesforce.com, Windows (Azure), etc. cross checking their public accessible billing customer informations.

  8. 8.

    Typically in these cases network costs are billed as non mentioned cost component of request costs in bills.

  9. 9.

    Which is not done in this paper due to page limitations. But the aggregation is analog.

  10. 10.

    This is what every cloud service provider stresses as THE key benefit of cloud computing.

  11. 11.

    http://www.google.com/intl/en/analytics/index.html.

  12. 12.

    http://awstats.sourceforge.net.

  13. 13.

    http://www.openwebanalytics.com.

  14. 14.

    Think about a situation like, setting up a social network and you plan to orient on a platform like facebook.com or linkedin. Facebook has something about five hundred million users, linked in has about seventy million users. But how many pageviews has Facebook or linkedin? Hard to estimate or to research.

  15. 15.

    For example answer yourself the question whether two high-performance instance systems are more cost efficient than ten low-performance but load balanced ones? It is likely that your answer is like: “It depends.”

  16. 16.

    This is due to validation—it might be possible to use a completely different similarity function. The presented function is only for exemplification purposes.

  17. 17.

    \(\mathit{TOTAL} = \mathit{IAA{S}_{COST}} + \mathit{PAA{S}_{COST}} + \mathit{SAA{S}_{COST}}\).

  18. 18.

    The cost estimation is performed for lectures “Web Technology” and “Databases”. In both lectures a varying amount of students over time have to pass practical exams in which they have to set up and implement an interactive web presence or database intensive application. The system usage characteristic includes a 24  × 7 phase of 4 weeks. All necessary infrastructure is provided by Amazon Web Services. By applying the mentioned cost estimation models we figured out to have 18.81 USD per student cloud costs per student. So if our next classes have 100 students we assume 1,881.00 USD for 100 students cloud costs for the next semester.

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Author information

Authors and Affiliations

  1. Computer Science and Business Information Systems, Lübeck University of Applied Sciences, Lübeck, Germany

    Nane Kratzke

Authors
  1. Nane Kratzke
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Correspondence to Nane Kratzke .

Editor information

Editors and Affiliations

  1. SUNY Empire State College, Hauppauge, 11788, New York, USA

    Ivan Ivanov

  2. , Centre for Telematics and Information Te, University of Twente, Enschede, 7500 AE, The Netherlands

    Marten van Sinderen

  3. Collaboration & Research on, Enterprise Systems &, Interdisciplinary Institute for, Sofia, Bulgaria

    Boris Shishkov

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Kratzke, N. (2012). Cloud Computing Costs and Benefits. In: Ivanov, I., van Sinderen, M., Shishkov, B. (eds) Cloud Computing and Services Science. CLOSER 2011. Service Science: Research and Innovations in the Service Economy. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-2326-3_10

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  • DOI: https://doi.org/10.1007/978-1-4614-2326-3_10

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  • Publisher Name: Springer, New York, NY

  • Print ISBN: 978-1-4614-2325-6

  • Online ISBN: 978-1-4614-2326-3

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