Cloud Computing Economics

Abstract

Cloud services and technologies are currently receiving increased attention from the industry mostly due to business-driven promises and expectations. Significant innovations in virtualization and distributed computing, as well as improved access to high-speed Internet and a weak economy, have accelerated interest in cloud computing. However, is the migration to the Cloud the most profitable option for every business? Enterprise adoption of cloud computing often requires a significant transformation of existing Information Technology (IT) systems and processes. To justify such a change, a viable business case must be made based on the economics of transformation. This chapter presents a study of the basic parameters for estimating the potential infrastructure and software costs deriving from building and deploying applications on cloud and on-premise assets. Estimated user demand and desired quality attributes related to an application are also addressed in this chapter as they are aspects of the decision problem that also influence the choice between cloud and in-house solutions.