ANTenna Blog -- Services

McKinsey & Co.'s new report, "Clearing The Air On Cloud Computing," says cloud computing can cost twice as much as in-house data centers. That sucks for enterprises, but actually works to the advantage of small and midsize companies. Here's why...

Basically, the McKinsey report says "There are significant hurdles to the adoption of cloud services by large enterprises."

Financial
Current cloud computing offerings are not cost effective
compared to large enterprise data centers.

Organizational
The IT supply and demand organizations will have to adapt to function in a cloud-centric world.

As John Foley points out in Plug Into The Cloud, McKinsey calculates that Amazon Web Services charges "$366 per CPU per month, while on-premises systems can do the same job for $150/CPU." That's a much needed reality check for the enterprise. But it's an opportunity for SMBs!

McKinsey says "Cloud offerings currently are most attractive for small and medium-sized enterprises. Clouds are very cost effective for SMEs… and most customers of clouds are small businesses."

That's because smaller companies don't have the option of building themselves giant data centers and keeping them running at peak efficiency.

And, as Foley notes, "Few if any major corporations are looking to replace their data centers with a cloud... the 'server-less company' is one that's only feasible for startups and SMBs."

That dichotomy creates a window of time where small and midsize companies can leverage the advantages of cloud computing more quickly and more thoroughly than enterprises can. That opportunity won't last forever, so it makes sense to grab it now if at all possible.

Finally, the report makes one comparison that holds true for small companies as well as large ones. If you are operating your own servers, don't let cloud computing distract you from the advantages of virtualization, which can deliver big savings for companies of all sizes.