Research finding – Complete migration to cloud is NOT appealing for large business


This is what I had suspected for a long time. I had suspected that Cloud losing its Value Proposition and Cloud is for Flexibility and NOT for cost saving. However, I did not have research data to support my claim.

Now I have supporting evidence from Byung Chul Tak, Bhuvan Urgaonkar, and Anand Sivasubramainam of the Pennsylvania State University who have published a paper titled “To Move or Not to Move: The Economics of Cloud Computing”. The paper attempts to calculate the economics of moving to the cloud over a horizon of ten years. The tests assumed that hardware and software would be refreshed every four years. The conclusion is interesting:

  1. Complete migration to today’s cloud is appealing only for small/stagnant businesses/organizations,
  2. Vertical partitioning options are expensive due to high costs of data transfer, and
  3. Horizontal partitioning options can offer the best of in-house and cloud deployment for certain applications

“Vertically partitioning” = systems in which some of the software (such as application servers) is run in-house, while other programs (such as databases) are run in the cloud.

“Horizontally partitioning” = systems in which all the software is run in-house, though additional copies could be run in the cloud to meet peak demand.

What is interesting to note is that the study does not take all costs of a cloud migration into account. Many costs can’t be quantified, such as the cost of rewriting applications for the cloud, or the cost of retraining IT help to manage the cloud. As a result, the researchers did not factor these costs into their analysis.

So, if those costs are added, migration to cloud becomes further uneconomical.

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  1. […] In practice, assuming that you have already implemented virtualization, the cloud is likely to be cost effective only for some types of usage. This is especially true if you are looking at IaaS (you can have a look at this research finding). […]

  2. […] In practice, assuming that you have already implemented virtualization, the cloud is likely to be cost effective only for some types of usage. This is especially true if you are looking at IaaS (you can have a look at this research finding). […]

  3. […] studies have questioned the cost saving potential of cloud. Costs saving possibilities exist when the load is unpredictable […]



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