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Cloud Computing, Cost, and Workload

One of the features of cloud computing is that it’s supposed to be an economy of scale

One of the features of cloud computing is that it’s supposed to be an economy of scale. Cloud solutions ought to be able to handle large workloads as well as small workloads, and adjust on the fly. While this is true from the actual technology side of things, when it comes down to cost, things aren’t as crystal clear. Those cloud computing customers who are running smaller workloads may be seeing significantly higher cost savings, when compared to those with larger computing jobs.

A recent study from Pennsylvania State University makes just that case. The study suggests, what, while most companies expect to save on costs by moving applications to cloud computing, it’s not always clear whether or not those cost savings really show up all of the time.

Cost benefits of cloud computing
Certainly, those who provide cloud services will tell you that it always saves money. To be sure, going with a cloud solution will, at the very least, eliminate certain capital expenditures (particularly those needed for new hardware and software).

In addition, one of the compelling ideas behind cloud computing is that cloud providers can do what needs to be done more efficiently than it can be done in-house. They have the level of expertise that is often lacking in an organization. This results in higher productivity and additional long-term savings.

Many factors in cloud savings
As it turns out, however, it’s not always cut and dried. Sometimes, it’s actually more economical and more efficient for an organization to provide a solution in-house rather than moving it to the cloud. Factors like the workload intensity, how the particular application will be used in the future, and ancillary costs like storage or software licensing all factor in.

Small workloads reap the biggest benefits
The study discovered that small workloads – those with 20 transitions per second that grow around 20 percent each year – save significant costs in the cloud. The study actually suggests that it costs about one tenth to operate such workloads in the cloud compared to doing it in-house.

Larger workloads – those with 900 or more transactions per second – start out at a similar cost to an in-house solution. Over a 10-year period, however, the overall cost of the cloud solution is nearly twice what an in-house solution would be. The key when choosing whether or not to move an application to the cloud would seem to be, in many ways, being able to look at the workload and being able to project usage out over the next several years.

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Unitiv, Inc., is a professional provider of enterprise IT solutions. Unitiv delivers its services from its headquarters in Alpharetta, Georgia, USA, and its regional office in Iselin, New Jersey, USA. Unitiv provides a strategic approach to its service delivery, focusing on three core components: People, Products, and Processes. The People to advise and support customers. The Products to design and build solutions. The Processes to govern and manage post-implementation operations.