Traditional IT expenditure has been very capital intensive. Hardware had to be bought outright and software licenses were generally an expenditue that appeared on the balance sheet. For this reason, the decision making process for the purchase of technology became very drawn out.
One of the core tenents of Cloud Computing is that it is a recurring expenditue model, simular to telephone or electricy expenditures in that it is accounted for as a standard operating expense.
Financial Considerations
OpEx is benificial for the organization, as it gives it the flexibility to terminate cost at will. With a capital purchase, the server or software being acqired is fully committed to.
Regardless of whether it is being utilized, the ongoing costs (by way of depreciation or financing cost) still need to be borne.
Contrast this with OpEx where, in the event that the item is no longer required, payments can cease rapidly.
Private Cloud Services
Datran’s Private Cloud involves a distinct and secure cloud based environment in which only your business can operate. As with other cloud models, private clouds provide computing power as a service within a virtualized environment using an underlying pool of physical computing resources. However, under the private cloud model, the cloud (the pool of resource) is only accessible by your business providing your organization with greater control and privacy.
Public Cloud - you get What you pay for
A quick search of the Internet will yield a list of hundreds of companies such as Google, Amazon, and Microsoft that offer Public Cloud Computing service and do so for a very low cost, or even free.
Advantages: Customers benifit from economies of scale because infrastructure cost are spread across all users, thus allowing all customers to operate on a "pay-as-you-go" model. Applications typicalling include advance email services, storage, and file sharing.
Disadvantages: Public clouds share the same infrastructure pool with a limited number of applications that are selected by the service povider, not the customer. In addition, given that many users share the same infrastructure, security in the public cloud is a much debated issue.