Transformation of IT and Economics 101 of the Cloud

Cloud computing in the enterprise has been available in niches the last couple of years, but the large scale move that companies are now considering for areas of their businesses is relatively new to many.  Companies are looking at and analyzing the perceived benefits such as cost reduction, improved flexibility and scalability.  We’re all getting familiar with the topic of cloud computing and many businesses are starting to at least consider moving some of their commodity IT tasks and applications, such as email or basic IT services, to the cloud.  In the process many are asking, “what are the business and cost benefits, as well as the tradeoffs of doing so?  There are a couple whitepapers from Microsoft that touch on these topics that I thought would be interesting to visitors of this blog as they’re familiarizing themselves with the alphabet soup of terminology and considering the economics behind cloud computing.

The first whitepaper, “IT as a Service – Transforming IT with the Windows Azure Platform, talks about the triple play categories of IaaS (Infrastructure as a Service), PaaS (Platform as a Service), and SaaS (Software as a Service). It gets at the heart of who and where these services run including via Global providers, Regional providers and within Enterprises.  Some companies provide bits and pieces of the story here, but we at Microsoft believe we’re the company uniquely positioned to deliver on the full ‘three by three’ grid that encompasses these categories and deliver the software enabling businesses and partners to run them in the various scenarios.  This provides customers with the maximum flexibility and choice, as well as the common application, identity and management software and architecture needed to do so with the Windows Server and Windows Azure platforms at the core.  Check out the whitepaper to get the drill down on these topics.

The other whitepaper, “The Economics of the Cloud” and related blog entry, are from Microsoft’s Corporate Strategy Group and gets to the heart of the topic of cost savings.  The group looked at underlying economics of cloud computing including Private and Public cloud scenarios and offerings such as Windows Azure and Office 365.  Their conclusion is that due to the combined effects of three economic factors: supply-side, demand-side and multi-tenancy, large clouds could one day deliver computing power at up to 80% lower cost than small clouds.  Take a look at the whitepaper for yourself to dig into the data and explore the background on Rolf and Michael’s research.

Thanks and I hope you find these pieces educational, informative and beneficial.  As always if you’re looking for more information on Microsoft’s enterprise cloud offerings, be sure to check the Cloud Power site as well.


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