Cloud Computing Macroeconomics
The emergence of cloud services is again fundamentally shifting the economics of IT. Cloud technology standardizes and pools IT resources and automates many of the maintenance tasks done manually today. Cloud architectures facilitate elastic consumption, self-service, and pay-as-you-go pricing.
Cloud also allows core IT infrastructure to be brought into large data centers that take advantage of significant economies of scale in three areas:
- Large-scale data centers (DCs) lower costs per server. Client/Server Only
- Aggregating demand for computing smooths overall variability, allowing server utilization rates to increase.
- When changing to a multitenant application model, increasing the number of tenants (i.e., customers or users) lowers the application management and server cost per tenant. Tenant spin-in and spin-out orientated framework scenarios also need to be carefully selected.
Cloud computing offers users economies of scale and efficiency that exceed those of traditional computing, coupled with modularity and agility beyond what client/server technology offers. Cloud computing emanates economies of scale through;
- Cost of Power – utilizing shared resources
- Infrastructure Labour Cost
- Security and reliability
- Buying power
DTS Strategic Consulting services can offer a comprehensive study on your transition to the cloud. The economies of scale model, ROI calculations based on service model (SaaS, PaaS or IaaS).