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simple answer is: Yes, it is highly likely over time. There is however always
an adoption curve to new technology. Some customers are fast movers and
some intentionally move slowly. As a means to understand how fast
technology adoption is occurring we can look at a historical example
showing how fast the technology shift from the mainframe and dumb
terminal model to the client/server model happened during the years from
1989
to 1995. This technology shift could be considered as an equally big
shift, from an architectural perspective, as Cloud computing is today.
We see that over a 6 year period ‐ companies with a “mainframe only”
approach changed from 75% to less than 25% over that period. This is a
major technology shift, but it did not happen overnight, neither did it take
15
years. It was a steady transition to a more modern platform. The same
level of transition is currently happening with virtualization across servers,
and a similar level of change is likely to happen with Cloud computing.
Adoption of a major new technology typically happens over a period of five
years.
Figure 2: How convention shapes our market (Shana Greenstein, 1997)
2.4.3
Why is it cheaper for the supplier?
In the beginning of this chapter we looked into how economy of scale works
in favour for Cloud computing. However, we did not look into specific cost
factors. Some of the important factors involved in a typical TCO calculation
for a provider include energy, labour and hardware costs.
