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September 16, 2010

Weighing the Private Cloud Investment

Nicole Hemsoth

Making sense of private cloud ROI is tricky business; for some, private clouds are a no-brainer following even a cursory cost analysis, for others this is never quite clear—just how much will be saved with an investment now (despite constrained budgets) over the course of say, five years—and will it be worth it?

For those evaluating enterprise-level private cloud solutions, the best analogy seems to be making the decision to buy an electric or hybrid vehicle, just on a much, much smaller scale, of course.  When you strip out the environmental impacts part of that decision (although that too could be pulled into this conversation, just not now) you’re left with a simple choice: do I spend quite a bit more now and wait for it to pay itself off down the road or do I just stick with what’s more reasonable on an up-front cost basis, even though there’s a decent chance I’ll end up paying more over the long term…perhaps a lot more?

Rick Parker, IT Director at Fetch Technologies, weighed in about the true cost of private clouds, arguing that the only reason companies have not adopted the model is because it’s hard to rationalize the initial cost in the face of benefits that might seem far off

He notes that while private clouds may not always be the cheapest option for enterprises, it is “definitely the most cost-effective way to build a truly reliable and scalable IT infrastructure” since that scalability itself is what makes the concept of clouds attractive from a cost-benefit standpoint.

One of the key areas Parker notes as being of particular value in the private cloud decision is the notion that hardware and software costs can be dramatically reduced, especially since most firms already have the hardware required to begin building and deploying private clouds. He does, however, state that on a hardware level there are some uniquely tailored hardware options, including “enterprise-class, chassis-based systems that are more cost effective and probably necessary for a production cloud for scalability reasons.”

Along the costs associated with physical infrastructure (power and cooling come to mind first) and IT staff needed to monitor their monsters, the issue of scalablity and redundancy are seen as critical elements (that might be overlooked to often) when performing cost evaluations of a private cloud.

Parker reminds readers that organizational “mileage will vary, of course, in terms of what a cloud computing solution costs you to build and operate. Cloud computing isn’t necessarily cheap, but it is more cost-effective in the long run than a traditional infrastructure. And if you’re focused on the big picture, that’s what really matters.”

Full story at Enterprise Efficiency