Joe's Blog

I was recently asked to do a guest blog regarding a  study commisioned by Microsoft on IT spending attitudes.  The complete article  and links to the study can be found at http://tinyurl.com/mkqfqp, please check it out.

 

I discussed the need for a hybrid approach to infrasturcture and education expenditures.  Two areas that need to be addressed if innovation is to be attained, even in a restricted budgetary time.  Here is my discussion of the Azure Cloud Value Proposition.

 

Cloud Computing is quickly becoming a reality with major investments by Microsoft, Google and Amazon.  Cloud Computing allows you to efficiently extend and scale your IT infrastructure into a shared internet environment and overcome two major investment concerns when an enterprise invests in new technology.  The first of these concerns is the Cash Flow Curve of Costs to Utilization for new technology investments.  The typical curve for private cloud cash expenditures is as follows:

Typically there are large cash expenditures for infrastructure well before there is utilization related to revenue/efficiencies to be realized on the private cloud investments.  As utilization of the infrastructure takes place there is typically a period that occurs where over utilization of the resources occurs, which results in another capital expenditure to give greater capacity than is needed until once again utilization out strips capacity and the whole process of underutilization/overutilization takes place again.  The Cloud Computing approach smoothes this Cost/Utilization by allowing the enterprise to only purchase the amount of computing power that they need to meet utilization requirements.  Another issue that Cloud Computing addresses is daily Periodicity of Demand.  The typical demand curve in a fully utilized system looks like the following:

The Y axis shows a measure of infrastructure capacity based upon simultaneous users while the X axis shows time within a day.  As can be seen, the system is underutilized (yellow) through the majority of the day with a couple of spikes of overutilization (red).  Of course, the overutilization spikes carry the added inefficiency of a not optimal computing environment.  The Cloud Computing platform with its on demand scalability and pay as you go pricing model address both the cost curve and periodicity of demand concerns related to IT infrastructure expenditure.