Cloud Computing a Money Waster?


Lately I've been hearing CIOs talking up the potential of cloud computing, even though so many of them have talked it down since the buzz around the cloud emerged.

Many IT leaders say they're seeing the cost benefits of using cloud services. But does it really save money? Steve Lohr has the goods on a new report that says, emphatically, no.

Lohr reports that a study conducted by McKinsey and unveiled April 15 presents cloud computing as a money-waster for business. For example, the report states, running a data center via the cloud actually costs more each month (per unit of computing output) than doing it internally. (Note: That's based on the pricing of Amazon's Web service.)

And it wouldn't be tax day unless the dreaded IRS came into play. According to the study, owning data center hardware pays off, once you figure in the depreciation write-offs.

I'll admit, I haven't seen the full report, but the findings in Lohr's blog post are intriguing. I bet that there are others out there that would dispute them, and I'd love to hear the other side of the argument.

Regardless of the cost concerns, cloud computing has other problems. For one, our resident CIO columnist, John Parkinson, isn't convinced about the security standards. IT consultant, academic and benchmarking guru Howard Rubin says the current vision of the cloud is actually just a small piece of a bigger, more impacting puzzle.

What are your biggest concerns about venturing into the cloud?


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