Cloud economics: It’s not just rent-versus-buy
October 3, 2013
Grazed from FierceCIO. Author: Derek C. Slater.
From a cost perspective, cloud computing decisions are often cast as OpEx versus CapEx–simplified even further to "rent versus buy". But if that’s the discussion in your organization, you’re missing some crucial points, says Bernard Golden. "Cloud is serving as a forcing function in IT," he writes, making companies arrive at a much more fine-grained understanding of their costs.
The fact that Amazon Web Services pricing is posted openly on the web creates discomfort for its competitors, who are traditionally more accustomed to the leverage that comes with closed-door negotiations. However, it also puts the onus on IT shops to provide the same level of transparency for internal IT service costs…
And once you provide transparency, the next step is continual improvement. The goal will be a high level of utilization, for cost efficiency purposes–and that means "capacity planning" (making sure you have enough) must be replaced by real-time utilization analysis and demand management…
Read more from the source @ http://www.fiercecio.com/story/cloud-economics-its-not-just-rent-versus-buy/2013-10-03