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Monday, June 29, 2009

Cloud Computing = Accounting Exercise?

Dude. Seriously.

With all of the talk about Cloud Computing, and where it is headed and what it is evolving into, let's not get too far ahead of ourselves.

When companies wanted to get out of paying the capital expense of their computing hardware, software, and storage arrays, etc. they outsourced it to companies like Savvis, Terremark, and Navisite where they pay one monthly nut for new hardware, software, and 24x7x365 support by people who know what they're doing.

When I look at cloud, it's the same thing on a micro level...

'I need disk, memory, and CPU cycles and I need to rent them. I need them to be elastic, on demand, and automatically provisioned.' Isn't it managed services with an hour by hour/day by day/week by week contract? All the components are cash bar vs. open bar?

Is this just an accounting exercise?


  1. OK, I'll bite. ;-) If cloud computing was just an accounting exercise, we wouldn't even need to go so far as to "outsource the hardware" as you say to hosting companies. We could simply lease the equipment instead of purchasing it. Suddenly you wouldn't have an upfront capex outlay. But of course there are other benefits beyond those related to accounting. And hosting providers themselves are getting into the cloud computing game by offering compute services on ever finer levels of granularity. This means (if you apply it to the right scenario ;-) ) greater efficiency, improved scalability, lower cost, and others.

    Paul Burns

  2. You are absolutely right. There has to be much more to Cloud computing than shifting of expenses from one side of the income statement to other. Without fundamental improvements in efficiency, Cloud Computing will not enter the Enterprise datacenter mainstream. Current cloud offerings are interesting, but they do not set to capture more than a small fraction of the Enterprise datacenter.


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