Is there a point where a private cloud is cheaper than the public cloud?

Grazed from NetworkWorld. Author: Brandon Bulter.

A group of companies that sell products to build private clouds has determined a price at which it claims it is less expensive to operate a private cloud compared to using Amazon Web Service’s IaaS public cloud. A report from the vendors – which include a collocation provider, a cloud management vendor and a network operator – attempts to address a question many organizations may be considering: When is it better to use a public cloud versus a managed hosting or collocation environment? The case study finds that if an organization is spending more than $7,644 in Amazon’s cloud each month, then it can be cheaper to operate a private cloud.

But analysts say it’s difficult to put an exact dollar figure on when a private cloud will be more cost effective than a public cloud; there are just too many factors to consider, says IDC analyst Melanie Posey. “It’s very hard to make sweeping statements,” she says in an email…

Issues such as the type of workload that is being run, how much the infrastructure is being used, how highly available it has to be, if regulatory or compliance issues need to be addressed and if there are any performance or latency issues are all factors that could influence the costs. “These issues all come together in figuring out whether cloud is more cost-efficient than traditional collocation or hosting.”…

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