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Cloudonomics: The Economics of Cloud Computing

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Executive Summary

There are many reasons for organizations to move from traditional IT infrastructure to Cloud Computing. One of the most cited benefits is the economics of the Cloud. Yet while many people point out the cost savings that Cloud Computing brings to an organization, we believe attention should be drawn to four distinct mechanisms through which these cost savings are generated:

  • By lowering the opportunity cost of running technology
  • By allowing for a shift from capital expenditure to operating expenditure
  • By lowering the total cost of ownership (TCO) of technology
  • By giving organizations the ability to add business value by renewed focus on core activities
In this paper we detail these four mechanisms and introduce several case studies and examples to show the increased economic value that Cloud Computing brings to an organization.

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