Economics of Cloud Computing

Like food & logging, computing has also become the daily need, especially for economic forces, business drivers and firms, enterprises & companies. In the olden days, it is said that - economy is directly related to energy. Similarly, a person's growth or the development of an organization depends on what its owner feeds and in what way. The world of technology nowadays thinks about the increase in computing power with lower energy or resource or financial consumption.

Economic Planning for Organizations

For IT firms and their management department, energy consumption is not a small issue. Along with energy, maintenance of data-centers based on enterprise budget is also a prime factor that needs planning. So IT managers are looking for ways to increase the capacity and flexibility of computing and hardware thereby lowering costs and increasing their return on assets (ROA). Within the last few years, the trend of technology shifted from traditional enterprise data centers to management via server virtualization which allows faster & efficient deployment of processing without increasing the data center's size, staff overhead or energy consumption. With the maturity of cloud, the cost and economic factors relevant to cloud technology including architecture trades, the technique of implementation, life-cycle cost, service cost, etc. have striking implications for government as well as in firms. Cloud Computing has emerged as a new computing paradigm, and it's bringing a change in the same manner as cost and economic evaluations for IT. IT environments have evolved a high degree of sophistication for cost estimating methodologies in recent years.

Dependencies & Questionnaires of Cloud Economy

Cloud computing economics depends on four customer population metrics:

  1. Number of Unique Customer Sets
  2. Customer Set Duty Cycles
  3. Relative Duty Cycle Displacement
  4. Customer Set Load

These above metrics allow the cloud-providers to use less IT resources and obtain maximum IT resource. Proper balancing & handling of these above resources can save up to 30% of the IT resources. For economic planning, Booz Allen Hamilton, a leading strategy, and technology consulting firm, has a clear understanding of and models for effective Cloud Computing-based life-cycle cost and economic modeling.

This firm addresses every aspect of cost related efforts & questions such as:

  • If you are migrating current systems to a cloud, how will you handle (and cost) the migration?
  • Will you migrate all IT related tasks into the cloud, or it will be partially migrated?
  • What IT chores should remain in the current environment?
  • Will you use a public cloud, or you will need a private cloud?
  • If you are migrating IT requirements into a cloud, how will you handle and budget for the short-term operations of distributed and cloud infrastructures?
  • What can special-purpose computing tasks be enabled in the cloud technology that wasn't possible in the current environment?
  • Can the cloud provide levels of service commensurate with existing service-level agreements?

Economical Decisions

Cloud technology provides users with strong facilities & economic incentives. The selection for implementing the private, public, community or hybrid cloud solely depends on the customer's specification for applications they want to use, the performance they need, the security they want to take & compliance requirement. Proper deployment model can save monetary value as well as time in a significant manner, provide better IT services & provide a higher level of reliability.

Achieve Cloud Economics for Operation & Services

Users get frustrated when they need to secure their resources to business requirements. Even if they're willing to pay the attributed cost, they may find that technology cannot deliver resources to address their needs. Frustrated by the unavailability of resources required to fulfill their needs, and for that, they opt for the options to obtain resources are as follows:

  • To obtain sufficient resources for enabling the business opportunities
  • Hire a senior IT manager or an IT management team to put their request. This may help in letting the business proceed forward with the full initiative. But doing this fosters disrespect for the existing cloud process.
  • Request to the senior corporate manager for raising the technology and resources (in case of cloud-security, or cloud-infrastructure).

Economic Characteristics of Cloud

The unique characteristics of an ideal cloud technology model is mentioned below:

  • Scalability: Access to unlimited computer resources without thinking about the economic aspects. This feature needs planning & provisioning.
  • Low Entry barrier: Users can gain access to systems for small investments also; which allows the offer to access global resources to small ventures.
  • Flexibility: Cloud provides high economic elasticity. Users can re-size their resources based on their need. This feature allows optimizing the system & captures all possible requirements.
  • Utility: As cloud providers 'pay-as-you-go' model, users can match their needs & resources on an ongoing basis. This eliminates waste and added benefits of shifting risks from the client.

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