Chapter 10

Breaking Down the Economics of the Hybrid Cloud

In This Chapter

Achieving the right balance of environments in a hybrid cloud

Economic benefit of the cloud

Discovering the economics of the data center

Evaluating costs in the hybrid environment

When company management begins thinking about implementing or utilizing a cloud, one of the first things they think about is the economic impact. Executives who don’t fully understand what the cloud is — and certainly don’t grasp the concept of hybrid cloud — are saying “we want cloud,” because the economics of the cloud can be compelling, and stories often appear in papers and magazines or arise in conversations. Before jumping feet first into the cloud, or implementing a hybrid cloud, it’s important to think about what mixture of environments will yield not only the best performance, but also the most savings.

When you begin your thought process around the economic impact of the cloud, you realize that there are no simple answers. You have to consider many different issues. The costs of running an application, such as e-mail or customer relationship management (CRM) is more complicated to calculate than looking at just how much you pay for the software and the expense of employing the required staff to run the application. You must also consider things like cooling, floor space, and capital expenses versus operating expenses — the list goes on. The reality is that organizations — from small and mid-size to the largest global enterprises — are moving toward hybrid cloud environments to increase flexibility and cost efficiencies. Correctly balancing the use of different cloud environments can be challenging for these companies, but correctly achieving the right mixture will optimize their rewards.

In this chapter, you look at the considerations that go into finding the correct balance of cloud, and you also look at a company that shifted their balance with economics in mind. Then, although the economic benefits are discussed throughout this book, we specifically point some of them out. You also look at the economics of traditional on-premises server-based environments compared to cloud-based computing models so you can understand some of the costs involved with each.