What are the economics of cloud computing?
Cloud computing brings immense economies of scale to computing and delivers computing resources on-demand in much the same way utilities deliver gas and electricity. In the past, companies had to make ever-growing capital expenditures (CAPEX) in comEnterprise Cloud Computing 21 puting resources to implement new information systems. Furthermore, to accommodate potential peak loads, they installed huge amounts of capacity so that today only 10-15% of data center capacity is typical utilized. The shift to the on-demand model of cloud computing isn’t just about cost savings. Far more important, it’s about giving organizations the agility they need to act quickly on new opportunities without IT being on the critical path. “Fast to market” is a central economic variable and speed is essential in the world of total global competition. What’s the difference between “cloud computing” and “cloud services?” In short, everything. “Cloud computing” implies a framework and vocabulary aimed at techno
