Cloud Computing : What Really Matters

Cloud Computing and migration of IT into the cloud replace capital costs (capex) by operating costs (Opex). But, does Cloud Computing makes IT operations cheap ? The debate about the economic benefits of cloud computing is being pursued intensively and often escalates to the Capex Opex comparison. But this conflict is merely a pretext to conceal the real contradiction in the enterprise IT.


Cloud Computing : Beyond Capex and Opex comparison


Beyond the Capex and Opex comparison, the strategic and difficult question to answer for the future of IT is, what if companies want to be owners and operators of IT, including the necessary facilities or do want to operate IT systems and installations. Still, facilities promise that worth several hundred million dollars and a lot required for the operation and development of the employees.This is at least more important, the installation together with a powerful expert team operates the IT for the company. In a seriously powered cloud environment , it would even logical when you dissolve the infrastructure and operational teams and the complete control and monitoring of external IT suppliers would pass the application support. The IT operations team would remain with a gradually reducing responsibility and a dwindling base on the track.

In the estimation of a market researcher, there are five following application scenarios :

  • Virtualization of their own data centers
  • Use of software as a service (SaaS)
  • Storage in the Cloud
  • Conversion to Web Applications
  • Operation of mobile applications


Cloud Computing : The Specific Points

Cloud Computing

Virtualization of data center resources for a variety of companies is one of the key strategic issue. On the other hand, they hope to extract a higher cost efficiency and also more flexibility in the deployment of computing and storage capacity. Companies with their own data centers is an opportunity, a new generation of cloud technologies to accelerate the implementation of their virtualization strategies. By integrating of modern cloud technologies with its own virtualized environment, a variety of new computing opportunities relate the external computer power as flexible and project-specific way.


The use of applications in the context of software as a service model is widespread. Already today, companies uses standard applications such as CRM, security, project management and collaboration over the Internet.

The crucial task is – How do you find the right method that ensures that the best applications are available? Ultimately include only those applications which can really add value to the company. But Capex Opex debate currently focuses on the economics of the two models, so first some thoughts : One advantage of the opex model is the lack of long-term commitment. Terminating a user who work with the cloud resources, have to re-hire the provider again ready. It is the responsibility of the external operator, to ensure efficient utilization of the facilities. The lack of commitment has the financial advantage that it is not a long-term investment. But it is also true that the users of a shared resource based on a unit of measurement (such as per gigabyte of memory or CPU per minute) are charged in a rental model more than in-premise operation. A deep look at other industries shows that this is a common practice. Particularly vivid example is car rental service : The user holds only a temporary business relationship with the car rental service. The vehicle is used for a short time as required, this model runs better in some cases, because the user saves the expense of purchase and maintenance.

The most important finding is therefore : It is not the cost per unit which decide which model is better, but the financial burden on the whole and actual useful life. In IT, therefore the only the relevant costs are incurred for the use of all the necessary resources, as long as the applications. Such a survey, however, is much more helpful than complicated and complex comparison.

Secondly, the price units are relative. In an environment that provides ten gigabytes memory, a gigabyte storage is more expensive than in an installation with ten terabytes.

Third, the different consumption patterns are crucial because in quiet periods, the demand is low in business.

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