Cloud Computing Won’t Save You From Up-Front Spending

Cloud Computing Won’t Save You From Up-Front Spending

One of the oft-discussed advantages of cloud computing is that it eliminates the need to spend large amounts of money at the commencement of an IT project. But as cloud workloads become more complex, that’s becoming somewhat less true.

Picture: Kyle Taylor

Because cloud computing relies on a pay-as-you-go model, it's often presented as a direct shift from capital expenditure to operational expenditure. That's true for simple rollouts of virtual servers, but if you are setting up a cloud environment that is replacing complex on-premises software such as ERP, you can end up spending a lot on hiring experts to make the system work. That still doesn't qualify as capex, but it can require a lot of money.

According to Chris Morris from research firm IDC, 40 per cent of the total expenditure on cloud projects now comes up front through services and setup. That's a big shift from the conventional way of thinking about cloud.

"We now have much more complex workloads coming into the cloud," Morris said at VMware's vCloud launch earlier this week. Because the "low-hanging fruit" of simpler cloud projects is now largely complete, that increased up-front expenditure is likely to remain the dominant pattern, he said.

The lesson? When you're planning for a cloud project, don't assume that the initial explorations will be cheap.