Posts tagged ‘Cloudonomics’

February 14, 2012

Financial Disincentives for Cloud Computing

In general I think cloud computing is a great thing. Elsewhere I have talked about the benefits that it can bring to many organisations. Many of the positive financial benefits of cloud computing are well-known: pay only for what you need or use; cost certainty; being able to reduce the cost of ICT as the demand for ICT services reduces;  reducing the need for massive upfront investment in infrastructure and so on. One of the benefits that I have been more sceptical about, however, is the way that cloud computing moves the cost of ICT from capital expenditure to operational expenditure. From my point of view money is money. Merely moving it from one line on the budget (capital expenditure or capex) to another line on the budget (operational expenditure or opex) seems to me to be no benefit at all. On investigating the issue further it seems that there are some unusual circumstances where this is a bad thing.