The Economics of Cloud Computing: An Overview For Decision Makers

Foreword

Depending on whom you talk to, cloud computing is either very old or very new. Many cloud computing technologies date back to the 1960s. In fact, it’s very hard to point to any single technology and say, “That new thing there is cloud computing.” However, cloud adoption—public, private, or otherwise—is a new phenomenon, and the roots of that adoption lie in the economics of cloud computing.

Companies have historically consumed technology as capital expenditure “bursts” combined with fixed operational costs. When you needed a new system, you would finance it separately from your operational budget. The 2000s brought us a one/two punch that challenged that traditional consumption model.

First, the recession in 2001/2002 resulted in a huge ...