|By Maureen O'Gara||
|April 18, 2009 07:00 PM EDT||
McKinsey & Company says that outsourcing your typical big corporate or government data center to a cloud service would cost double what it costs to keep the thing in-house.
The mighty consultant has run up what it figures is a "hype-free" study called "Clearing the Air on Cloud Computing" that recalls the dot.com bubble and warns of the dangers of investing in hype.
Its conclusion is that "cloud computing has shown great promise for start-ups and pet projects for large corporations. However, cloud computing can divert IT department's attention from technologies that actually deliver sizeable benefits."
McKinsey used Amazon's pricing as its point of comparison and determined that the total cost of the data center's functions would be $366 a month per unit of computing output while keeping the work at home only costs $150 a month.
And as for the CAPEX-saving come-on of the cloud, well, owning hardware is more cost-effective than renting it if you throw in the tax deductions for depreciation.
Labor costs are pretty much the same no matter what you do. McKinsey finds 10%-15% of your headcount can be cut by migrating capacity to the cloud, most of it coming out of facilities and touch labor roles like administrators, but the savings is offset by the difference in hardware pricing.
Then there are the abiding security and reliability issues of cloud, the fact that applications may have to be re-architected and that business perceptions of increased IT flexibility and effectiveness will have to be managed. McKinsey also notes that enterprises tend to set their SLA uptimes at 99.99%, a figure cloud providers aren't ready to match.
It says the cost of the cloud has to come down about 144% to make outsourcing a complete data center economically sensible.
It allows that the cloud may make sense for some small and medium-sized companies with revenues of no more than $500 million - if they limit themselves to pre-paid Linux servers.
It advises big enterprises to use virtualization, the more aggressive the better. It reckons they can get server utilization rates similar to cloud providers.
It figures going in that a typical big-time data center has 10% capacity utilization. That number, it claims, can be increased to 18% or even 35%.
And best practices, it says, can drive down server TCO by more than 50%.
The study includes a definition of cloud computing and says the publicly announced private clouds aren't clouds at all because the enterprise can't avoid capital expenditures. It says they're essentially aggressive virtualization on top of traditional enterprise IT stacks.
McKinsey defines a cloud as hardware-based services offering compute, network and storage capacity where hardware management is highly abstracted from the buyer, buyers incur infrastructure costs as variable OPEX, and infrastructure cost is highly elastic (up and down).
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
May. 28, 2016 09:15 AM EDT Reads: 1,168
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
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In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
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As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
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SYS-CON Events announced today Object Management Group® has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
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The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
May. 28, 2016 01:00 AM EDT Reads: 1,929
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May. 28, 2016 12:15 AM EDT Reads: 2,431
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