Is Cloud Computing really Cost-Effective?

With the booming of cloud, a increasing number of enterprises are considering transferring the business to cloud because the move seems to help the enterprises not only to enhance working efficiency but also to decrease operating cost. However, findings indicate that under current circumstance, the portability of enterprises based on cloud is limited (Armbrust et al., 2010). Comparing to the potential expenditure one enterprise may face, the benefits it gains from may appears less attractive. Evidences in aspect of costing, efficiency and security are showed and discussed to get a conclusion.

One of the most crucial reasons one enterprise choses cloud computing is costing. Some research claimed that the cloud computing is cost-effective because it is charged on pay-as-you-go basis (Brumec and Vrcek, 2013). That means a user will pay the amount which are equal to the user’s usage. Vanmechelen et al. (2013) believes such a model will provide flexibility that ensures the user to avoid investing to excess. However, this statement fails to explain some phenomenon in reality. Set MemSQL, which is a San Francisco outfit, as an instance. When MemSQL first started up, it was based on cloud computing Amazon.com, just like what most tech enterprises in Silicon Valley did. But it gave up using Amazon cloud only two years after its foundation and returned most of its operation back to traditional computers. Eric Frenkiel, the CEO of MemSQL, announced the reason why it off the cloud was the bills from Amazon was getting bigger and bigger. “I’m not a big believer in the public cloud. It’s just not effective in the long run”, he said (Metz, 2013). The Frenkiel’s word is only able to present his own opinion. Based on what MemSQL has experienced, ...

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...ds are still provided by certain kinds of cloud providers. Only a few have financial ability to build one’s own cloud. Even so, a cloud could hardly prevent being attacked by cyber criminals.

To sum up, cloud computing may not be cost-effective, especially under some circumstances. For those enterprises which already have certain scales, upfront investment of moving up to cloud could be substantial due to the magnificent data foundation. Once an organization involved in cloud, that means it is going to rely on cloud to some degree. The efficiency of the organization might suffer from delayed technical support. Even some practical cases (MemSQL, Zynga and Uber) show cloud is not suitable for long-term business operation. Besides, a company may suffer a great loss due to cloud’s security issue. Thus cautious consideration should be taken by before the final decision.