Cloud

The Economics of Cloud Computing Addressing the Benefits of Infrastructure in the Cloud

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Executive Summary

The federal government is embracing cloud computing as a means of reducing expenditures for Information Technology (IT) infrastructure and services - trading up-front investment for significant out year savings. Booz Allen Hamilton has conducted an economic analysis to investigate the potential savings of the federal plan, focusing on IT data centers and using a proprietary cost model and extensive experience in cost and economic analysis of government IT programs. The results generally confirm the government's expectations of significant cost savings; for a non-virtualized 1,000-server data center, the Benefit-to-Cost Ratios (BCR) in the study reflected in this paper range from 5.7 to 15.4 (with BCRs for larger data centers ranging potentially as high as 25).

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