CIO Talk Radio Blog

Cloud computing is HOT! First, get IT plugged into the right cloud service providers who do IT cheaper but better than in-house. Then IT can sit down in its rightful seat at the management table and get down to business with the other big guys. Sounds sort of like the ultimate corporate plug ‘n play. If only things were that easy.

Cloud Computing Benefits are obvious.  Cloud computing companies can provide flexible, scalable infrastructure resources on demand, without the need for additional investment. This levels the playing field for mid and smaller companies, so they can be as dynamic as a Fortune 500 company.  A recent Info-Tech survey suggests that three quarters of IT leaders are first considering a private cloud, with one third already set on a private cloud.  Cloud computing leaders are currently debating whether public or private cloud will dominate the future.

One of the most difficult items to forecast for new IT investment is the Total Cost of Ownership (TCO) model.  Calculating TCO was never easy for purchased on-premise software or hardware packages, but it is more complicated for cloud computing solutions. You'll hear various vendors talk about turning capital expense into operating expense, where on-premise software is a capital expense purchase, and cloud computing is an operating expense.  However, this is overly simplistic. To truly evaluate the TCO of a cloud computing investment you need to look at the following categories of spending.