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Financial Risks of Public Cloud

Financial Risks of Public Cloud

“Traditional cloud sales models market opex as a key driver for adoption, but this is not necessarily desirable for organisations”  –  Deloitte. Capitalizing Your Cloud (Jan 2017)

Purchasing commercial IT hardware traditionally requires a large, upfront investment. Customers configure these big, expensive IT platforms to cope with peak demands that may only last for a few days of the year. They reasonably ask for a better way to buy computing power…could they not just pay for what they use when they need it?

Is public cloud the answer? After all, it scales elastic workloads up or down as needed – and all on a pay-as-you-go basis. Public cloud providers advertise low upfront cost and OpEx-based commercial models as financially advantageous. But the truth is much more complex.

Some Public Cloud Financial Gotchas
Organizations may march to a “public cloud first” drum beat without fully understanding the financial implications. IDC, for example says that predictable workloads (which typically account for around 75% of all applications) often result in significantly higher costs (download the IDC study here). And prepaid on-demand capacity may require a cash investment on the same level as on-premises options.

Migrating to public cloud requires expertise for security, redundancy, backup, specific tool sets and so on. Organizations must either hire specialized staff or contract with consultants. And they must pay for overlapping expertise for both the on-premises and public cloud architectures during the lengthy migration process – assuming they ever even accomplish full migration.

Read the entire article here, Financial risks of public cloud |

Via Steve Kaplan at ByTheBell.com

Steve Kaplan Steve Kaplan (@ROIdude on Twitter) is Vice President of Client Strategy for Nutanix. Kaplan formerly co-founded, ran and sold two IT professional services businesses. Along with writing hundreds of articles and white papers, he has co-authored 7 books on Citrix technologies (all Official Citrix Guides) and 3 books on VMware technologies. Kaplan frequently presents on virtualization and cloud at venues across the globe. He helped pioneer the ROI methodologies used in the virtualization and has held positions on the advisory boards of several industry manufactures including Microsoft and EMC. Kaplan was both a Microsoft MVP (4 years) and VMware vExpert (7 years). Kaplan has an MBA from Northwestern and a BS in Business Administration from UC Berkeley.

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