I wrote about the Business Value of Cloud Computing back in June, 2009. I highlighted in that post, why enterprises were interested in cloud computing from a business value perspective and discuss why this style of computing has been, and will continue to be huge platform shift. As I discussed then, the transformation to cloud computing will come with significant improvements in efficiency, agility and innovation.
Recently, the Corporate Strategy Group at Microsoft did an extensive analysis of the economics associated with cloud computing, leveraging Microsoft’s experience with cloud services like Windows Azure, Office 365, Windows Live, and Bing. The outcome resulted in a blog post and a whitepaper, “The Economics of the Cloud.”
In the paper, it highlights how the economics impact public clouds and private clouds to different degrees and describe how to weigh the trade-off that this creates. Private clouds address many of the concerns IT leaders have about cloud computing, and so they may be perfectly suited for certain situations. But because of their limited ability to take advantage of demand-side economies of scale and multi-tenancy, the paper concludes that private clouds may someday carry a cost that is as much more costly then that of public clouds.