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forced to overprovision their IT resources 3‐10 times. For these types of
organisations the Cloud gives tremendous possibilities to save costs.
There are some other typical patterns where different Cloud benefits works
especially well. Startup businesses like the low‐cost scale up model, which
removes the need to invest in IT infrastructure. Internet service companies
like the possibility to scale up extremely quickly if their services get popular.
Small companies like the advanced features and security, which previously
were only available to large companies, and large companies like the
possibility for rapid provision of new services and to be able to easily test
new service innovations.
2.4.5
The costs of Private Clouds
Private Clouds, or highly automated virtualised self‐serviced internal
datacentres, may be the best solution for some companies. They bring some
of the economy of scale possibilities that the Public Cloud has to offer, down
to the internal datacentre. At the same time it makes it possible to comply
with specific security, performance or compliance requirements which may
not always be fulfilled in the Public Cloud. It is however difficult to make a
Private Cloud more cost effective compared to a Public Cloud.
2.4.6
The economy of the future Cloud
The combination of cost for hardware, energy, labour, bandwidth etc.,
makes Cloud computing “right” at this point in time. The doubts regarding
privacy, security, legal obstacles etc., will be addressed when the Cloud
providers, over time, learn how to adopt their Clouds t suit their specific
needs. At the same time, customers will learn how to better adapt to the
needs of Cloud architecture. At some point in the future the Cloud will be
ubiquitous and the default solution for many IT applications. Looking even
further into the future, we see new technology trends coming, even cheaper
computing devices, many core processors and almost unlimited local
storage. Will this change the cost equation again?
2.4.7
Further reading
In section three of this book we go into more detail regarding the economics
of the Cloud from different perspectives. We will look at changes in
mentality and process when buying/selling Cloud services vs. traditional
software, discuss the impact for providers, go into detail regarding the The
Foundation of a Cloud Business Model and, we also look at examples of new
