Arthur Cole – Is the Cloud Cheaper than IT? Not Always

The cloud is cheaper than standard IT infrastructure. This has been a given for so long that hardly anyone questions its veracity. And after all, who would argue the cost advantages of leasing resources from an outside provider vs. building and maintaining complex internal infrastructure?

Well, some very bright minds in the IT industry are starting to do just that.

Rob Enderle, writing for CIO.com, for one, notes that speed and flexibility, while important, do not necessarily translate into lower costs. The hard truth, of course, is that spending on IT is dropping while spending on cloud services is increasing, but this has more to do with timing and availability rather than simple economics. Indeed, recent analyses show that once internal infrastructure begins deploying cloud services of its own, it can meet enterprise needs for about $100 per user while Amazon and other providers come in at around $200 per user when purchased individually or in small groups, as is the practice with many business units. And a proprietary platform like Oracle can run as much as $500 per user.

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