Why Cloud Computing Will Never Be Free

The last time the IT industry delivered outsourced shared-resource computing to the enterprise was with timesharing in the 1980s when it evolved to a high art, delivering the reliability, performance, and service the enterprise demanded.

Today, cloud computing is poised to address the needs of the same market, based on a revolution of new technologies, significant unused computing capacity in corporate data centers, and the development of a highly capable Internet data communications infrastructure. The economies of scale of delivering computing from a centralized, shared infrastructure have set the expectation among customers that cloud computing costs will be significantly lower than those incurred from providing their own computing. Together with the reduced deployment costs of open source software and the perfect competition characteristics of remote computing, these expectations set the stage for fierce pressure on cloud providers to continuously lower prices.

This pricing pressure results in a commoditization of cloud services that deemphasizes enterprise requirements such as guaranteed levels of performance, uptime, and vendor responsiveness, much as has been the case with the Web hosting industry. Notwithstanding, it is the expectation of enterprise management that operating expenses be reduced through the use of cloud computing to replace new and existing IT infrastructure. This difference between expectation and what the industry can deliver at today’s nearzero price points represents a challenge, both technical and organizational, which will have to be overcome to ensure large-scale adoption of cloud computing by the enterprise.
The Essential Characteristics of Cloud Computing

This is where we come full circle and timesharing is reborn. The same forces are at work that made timesharing a viable option 30 years ago: the high cost of computing (far exceeding the cost of the physical systems), and the highly specialized labor needed to keep it running well. The essential characteristics of cloud computing that address these needs are:4

* On-demand access. Rapid fulfillment of demand for computing and continuing ability to fulfill that demand as required.

* Elasticity. Computing is provided in the amount required and disposed of when no longer needed.

* Pay-per-use. Much like a utility, cloud resource charges are based on the quantity used.

* Connectivity. All of the servers are connected to a high-speed network that allows data to flow to the Internet as well as between computing and storage elements.

* Resource pooling. The cloud provider’s infrastructure is shared across some number of end customers, providing economies of scale at the computing and services layers

* Abstracted infrastructure. The cloud end customer does not know the exact location or the type of computer(s) their applications are running on. Instead, the cloud provider provides performance metrics to guarantee a minimum performance level.

* Little or no commitment. This is an important aspect of today’s cloud computing offerings, but as we will see here, interferes with delivery of the services the enterprise demands.

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