Cloud Economics

Economic Geography of the Cloud

Grazed from PSMag. Author: Jim Russell.

If Seattle is the next golden era Detroit, then how is cloud computing the next Model T? As an automobile, the Model T didn't cater to the rich. Isochronic maps ignore class. The time to move from one part of the world to another depends on more than technological innovations in modes of travel. Even today, the ease of one's journey to work depends on household wealth. Henry Ford leveled that playing field. How does the cloud level the playing field?

In and of itself, the cloud doesn't level the playing field. In and of itself, the horseless carriage didn't level the playing field. Ford took a rich plaything, a novelty, and made it accessible to anyone. Rich or poor, no one was stuck on a railroad track. Harbors or river towns mattered less. Likewise, the cloud expands the geographic possibilities...

Hybridization Has the Potential to Change the Economics of Cloud Computing

Grazed from Tmcnet. Author: Laura Stotler.

I recently got the opportunity to interview Simon Withers, vice president of Global Cloud Product at Sungard Availability. His company, which has been in the managed IT services business for more than 30 years, has seen massive growth in the private cloud services space over the last couple of years, which isn’t surprising. What may be a game changer, however, is the rapid hybridization that is occurring in the cloud computing economy as organizations begin to understand the benefits of blending public and private infrastructure.

Withers said that hybridization is occurring across a number of infrastructure levels, and customers are rapidly realizing the importance of combining the security and customization of the private cloud with the cost savings and efficiencies of public cloud infrastructure. “What we are seeing at Sungard Availability Services is high growth in private services,” said Withers. “Ironically, at the same time, the majority of our managed cloud implementations are hybrid IT with increasing prevalence in the last twenty-four months.”...

Money Talks: The Economics of Cloud Computing and IT Support Functions (part 1 of 4)

Grazed from CloudCruiser. Author: Editorial Staff.

Over the past few years, the cloud has morphed from a relatively obscure entity into something that’s become pervasive as companies look to control costs and increase functionality. The technology’s popularity is evidenced by the fact that 75 percent of companies recently indicated that they’ve deployed at least one cloud computing platform. But before a business decides to move into the cloud, it’s important to perform thorough IT financial analytics to determine whether the move makes sense from a monetary perspective. With that in mind, one of the key areas that cannot be overlooked is support functions.

When IT functions are kept on-premises, businesses need to spend time hiring, training and certifying staff to manage and oversee the equipment that powers that infrastructure. That equipment also has to be purchased, maintained and stored, and staff members need to be compensated and offered benefits...

Cloud Mini-Series Part 2: The Economics Behind the Cloud and the Protectionist Threat

Grazed from Author: Matthias Langenegger.

This post is part of a series on the opportunities and challenges of cloud computing in the developing world. The previous post covered the transformative potential of the cloud and the different types of cloud services. Let us now turn to the economics behind the cloud. It’s a tough, fast-moving business involving substantial investments, and, most importantly, cloud services are effectively competing in a global marketplace.

The ‘borderless’, instantaneous nature of online communications means that cloud services can be provided from anywhere in the world, creating almost perfect markets in some areas. At least technically, competition is just a click away. That’s particularly relevant in an environment where many of the competing services are “free” to end-users (supported through ads, donations or other business models)...

Tech CEOs Warn of Threats to Cloud, Big Data Economy

Grazed from CIO. Author: Kenneth Corbin.

CEOs at some of the nation's leading tech companies see boundless potential for big data and smarter, integrated systems to address major social challenges in areas ranging from medicine to education to transportation — but at the same time, they worry that policymakers at home and abroad could stand in the way of that vision.

Top executives at firms such as Dell, IBM and Xerox gathered in the nation's capital this week under the auspices of the Technology CEO Council, bringing with them a message that the data economy is imperiled by concerns about security and privacy and protectionist policies that could limit the growth of cloud computing and balkanize the Internet...

Making the business case for public cloud trading

Grazed from ITNews.  Author: Stephan Reid.

We are entering the second wave of cloud computing: The Public Cloud Economics.  Most enterprises understand cloud topologies (virtualisation) and privacy levels (private, virtual-private, and public), or simply the different resource types (IaaS, PaaS, or SaaS).

Some have even embraced pretty sophisticated technologies like cloud bursting – the dynamic relocation of workloads. However, compared to this sophisticated understanding of technology, understanding of the current or even future economic models of cloud computing lags behind...

Cloud Economics Foggy to Many Businesses

Grazed from Channelnomics.  Author: Larry Walsh.

Vendors love cloud computing, at least in theory. The cloud computing model offers something many IT companies — vendors and solution providers alike — have never seen: recurring, predicable and accruing revenue. And, because cloud can be delivered at scale with fewer resources, such services are inherently more profitable.

Cloud economics aren’t lost on businesses. Rather than building and maintaining their own IT systems and applications, cloud computing promises to lower costs by making applications and resources more affordable through fractional recurring fees.  Here’s the problem: Businesses are worried about getting trapped in a service provider’s cloud...

Cloud and the Global Economy – Study by London School of Economics

Grazed from CloudTimes.  Author: Xath Cruz.

According to a study by the London School of Economics and Political Science, the development of cloud computing will result in economic growth, increased productivity, and promote change in the types of jobs and skills required by businesses.  The study focuses on two industries – smartphone and aerospace service – and dives into the impact of cloud computing on said industries using the UK, Germany, Italy, and USA and the years 2010 and 2014 as subjects. Microsoft helped underwrite the study.

The study claims that investments in cloud computing are contributing to job creation and growth in both the old and slow-growing aerospace sector and the relatively new, yet fast growing smartphone industry. Added to this, the cloud computing industry is also responsible for job creation via construction, staffing, and supply of the data centers that will host the cloud. Cloud computing also has the benefit of optimizing businesses as it frees up managerial staff and skilled employees, allowing them to focus on the areas of work that are more profitable...

Governing economic growth in the cloud

Grazed from Author: Editorial Staff.

Gross domestic product (GDP) can be boosted by cloud computing, the system in which remote computers on the Internet are used to store, manage and process data rather than the users' local machines. A report to be published in the International Journal of Technology, Policy and Management suggests that governments should collaborate to boost the adoption of cloud computing internationally. Marco Iansiti of Harvard Business School and Gregory Richards of Cambridge-based Keystone Strategy, LLC, have found that cloud computing is likely to extend economic growth by increasing the efficiency of information technology in developed economies and could foster growth in those economies where IT penetration is not yet fully mature.

"Cloud computing is a further evolution and integration of server, internet and personal computing technology. It is a paradigm that pushes the three driving forces of power, accessibility and economy of scale beyond present constraints," the researchers say. They point out that during the coming decade cloud computing will give individuals and enterprises access to a vast processing power at a low cost that has not been possible before. The team has now developed a model to link IT capital investment to economic growth and applied their model to 45 countries...

Appreciating the Fundamentals of Cloud Computing Economics

Grazed from IT Business Edge. Author: Michael Vizard.

Perhaps the biggest problem with cloud computing today is not the technologies involved, but rather the way IT organizations approach it.

In a new “Cloud Computing for Dummies” book, Judith Hurwitz, president of the IT consulting firm Hurwitz & Associates, and other well-known industry analysts make the case that IT organizations are not taking enough of a holistic approach to managing the cloud. The economics of cloud computing, says Hurwitz, are far from simple. IT organizations, she says, need to pay particularly close attention to the characteristics of the application workloads that are being put into the cloud and, given network bandwidth fees, how much and how often data is going to need to be moved.

Without a concerted plan, Hurwitz says IT organizations are going to wind up recreating the same mess that many of them have inside their data center in the cloud, which will be even harder to manage across multiple cloud service providers. The discipline needed to manage cloud computing, adds Hurwitz, begins with an emphasis on service-oriented architecture (SOA) fundamentals because at the end of the day, cloud computing is really all about the delivery of IT as a service...