Execs offer insight on 'cloud economics'

Carol Ko
Asia Cloud Forum
Is cloud computing necessarily a cheaper way to run business workloads than traditional compute?
 
At the CIO Executive Summit 2012 held in Hong Kong last month, a Fujitsu executive suggested that "The unit of cloud is no less expensive than a unit of traditional compute power."
 
This can be a puzzling statement. Don't cloud vendors, and occasionally, some CIOs, speak about the dramatic cost savings that the cloud brings due to the economies of scale?
 
In separate interviews with Asia Cloud Forum, four senior executives at Fujitsu, Savvis,Rackspace Hosting and IBM shared their thoughts on the topic of cloud economics. The vendor representatives are: Cameron McNaught (bottom right), senior vice president, cloud and strategic solutions, global business group, Fujitsu; Mark Smith (top right), managing director, Asia, Savvis; Mark Randall (bottom left), interim managing director for Rackspace Hosting Asia Pacific; and Matt Wang (top left), vice president, China development Laboratories, IBM China. Interview excerpts below:
 
Asia Cloud Forum: How can a unit of cloud be no less expensive than a unit of traditional compute?
Cameron McNaught: A lot of people say it's cheaper to go to cloud, but it's not. Over the total cost of ownership, it is. But for the point of a unit of cloud compared to a unit of traditional consumption, cloud is more expensive.

Let me explain with a hire car analogy. You can hire a car that is going to cost you more per hour to have a hire car, but you have the ability to return the hire car, or change the hire car for a different make or model. What's more, you can use the hire car for an hour, for a week, or for a month.

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