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Will Cost Savings Continue to Be a Significant Driver for Cloud Computing?

You have to consider the cost holistically with other factors

Yes, but it's not the only driver. There can be substantial cost benefits when leveraging cloud computing but, as we pointed out, your mileage may vary. You have to consider the cost holistically with other factors, including strategic benefits that are typically harder to define but are there nonetheless.

It's easy to determine that cloud computing is less expensive than traditional on-premise computing by simply considering the operating expenses. The real benefit of cloud computing (or more specifically, SOA using cloud computing) is the less-than-obvious value it brings to an enterprise, including:

  • The benefit of scaling.
  • The benefit of agility.

The benefit of scaling means that cloud computing provides computing resources on-demand. As you need those resources, you simply contact your cloud computing provider and add more capacity by paying more money. You can do this in a very short period of time, typically less than a day, and thus avoid the latency, expense, and risk of going out to purchase hardware and software that takes up data center space, and the traditional time required to scale up an application in support of the business.

The use of cloud computing resources allows you to go the other direction as well. You can remove capacity, and thus expense, as needed to support the business. If the business contracts and the number of transactions are not what they used to be, you can reduce your costs by simply reducing the computing resources within the cloud computing providers. No need to turn off expensive servers and have them idle.

The benefit of agility means that our SOA using cloud computing architecture can be easily changed to accommodate the needs of the business since it uses services that are configured via a configuration or process layer. For instance, if you add a new product line that needs specific processes altered to accommodate the manufacturing of that product, the sale of that product, and the transportation of that product, those processes are typically changeable by making a configuration change, and not by driving redevelopment from the back-end systems.

While this is a core benefit of SOA, in general, the use of cloud computing resources enhances agility since cloud resources are commissioned and decommissioned as needed to support the architecture, and changes to the architecture. You can bind in logistics processes from an application-as-a-service provider that supports the movement of the new product from the factory to the customer.  Since you leverage a pre-built service, out of the clouds, you don't have to suffer through the expense and cost of building that service from scratch.

Moreover, cloud computing does not provide a cost benefit in all cases. You have to closely look at each problem domain and business, and do an objective cost analysis to determine the true benefit. The tendency is to go with what seems trendy in the world of enterprise computing. While cloud computing may be of huge benefit to your enterprise IT, you have to consider all of the angles.

More Stories By David Linthicum

Dave Linthicum is Sr. VP at Cloud Technology Partners, and an internationally known cloud computing and SOA expert. He is a sought-after consultant, speaker, and blogger. In his career, Dave has formed or enhanced many of the ideas behind modern distributed computing including EAI, B2B Application Integration, and SOA, approaches and technologies in wide use today. In addition, he is the Editor-in-Chief of SYS-CON's Virtualization Journal.

For the last 10 years, he has focused on the technology and strategies around cloud computing, including working with several cloud computing startups. His industry experience includes tenure as CTO and CEO of several successful software and cloud computing companies, and upper-level management positions in Fortune 500 companies. In addition, he was an associate professor of computer science for eight years, and continues to lecture at major technical colleges and universities, including University of Virginia and Arizona State University. He keynotes at many leading technology conferences, and has several well-read columns and blogs. Linthicum has authored 10 books, including the ground-breaking "Enterprise Application Integration" and "B2B Application Integration." You can reach him at [email protected] Or follow him on Twitter. Or view his profile on LinkedIn.

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