Cost Evaluation on Building and Operating Cloud Platform

Abstract

Cost issue always is one of most important issue for enterprise in building their IT platform. With the advance of various cloud environments, enterprise’s IT executive may have different consideration in constructing their IT platform. For example, constructing an own cloud environment or renting a computing platform from cloud providers. This paper the authors, based on the Net Present Value in Finance field, propose a cost model for evaluating the tradeoff between building a self-own computing platform and renting one from public provider. The cost evaluation formulas are derived based on some cost factor, such as human salary, platform purchasing cost, energy consuming, maintenance fee, and cooling cost, for evaluating required cost on building and operating of both public and private clouds. Based on the cost model, the authors applied a well-known public cloud instance, e.g. Chunghwa Telecom’s HiCloud platform in Taiwan, to compute renting cost, and make a comparison with the derived cost of private cloud for a variety of enterprises’ settings. According to the experiments, different size of enterprises could have different options in building private cloud or renting from public cloud to make optimum cost saving.