Listening to multiple presentations from a variety of vendors with cloud-based solutions, you would get the impression that the greatest benefit of the cloud is cost savings. That’s certainly the way most marketing pitches for the cloud seem to lean.
While it is true that entry costs for a subscription-based service will almost always be lower than the entry costs for a service or product that is purchased outright, the math begins to favor the capital expenditure after the 5 or 6 year mark. This situation is quite similar to the cost differential between purchasing a home or automobile outright vs the long-term costs of financing these same items over a longer period of time. Ultimately, you pay for convenience, and the cloud offers a special brand of convenience.
The key is for an organization to determine if the benefits which are derived from this convenience, outweigh the raw costs that might be greater over the long haul.
It is no wonder that very few vendors will ever suggest that the long-term costs of any particular cloud computing service are automatically lower than the alternatives. No, what the cloud provides is low entry costs plus increased business and technology flexibility.
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