When Cloud Computing is too expensive

Cloud computing may look cheap, but it isn’t the cheapest option for everyone. Forbes published an article with lots of hard market data on actual cloud and non cloud alternatives, written by Gene Marks, who advises clients on their IT purchases. He helped 30 small businesses evaluate cloud computing solutions. All of these turned down cloud computing on the basis of cost.

So how come cloud computing is taking off anyway? Looking at the specific examples that Mr. Marks cites, what distinguishes these businesses from cloud adopters is that they are pretty stable over the coming 3 years, and can afford the upfront investment. This is very much in contrast with typical cloud adopters who are facing serious uncertainty about their future sizes. Buying too much might kill them financially, buying too little will lead to bad service for their clients. Additionally, they are not likely to have the capital available.

Business people rightly make procurement decisions on valid business reasons. Go here to learn more about these business reasons and how cloud computing influences them.

Cloud computing is not for the ‘business as usual types’. If you are running a server in your closet, and you are happy with it, go for it.

You might wonder why prices of cloud computing are so high. Like any profitable company, the strategy of a cloud computing company is to grow as fast as possible while keeping prices as high as possible. When they are at their maximum growth trajectory, this invariably means that the prices will be too high for some potential customers.

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