Roundup: The McKinsey Cloud Report

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It’s no surprise that McKinsey’s findings on cloud economics as a barrier to enterprise adoption have generated some reaction. Here’s a roundup of some noteworthy commentary and follow-up:

  • Nicholas Carr calls the McKinsey report “a useful, if flawed, counterweight to some of the more excited hype about cloud computing.”  Nick writes that it “underscores how early we are in the development of the utility-computing grid – and why we shouldn’t expect large companies to begin shutting down their data centers any time soon.”
  • Some cloud technologists are critiquing McKinsey’s pricing data and math, including Reuven Cohen. ”The report assumes a fairly static & constant data center environment running 24/7,” he writes. “They also completely neglect to mention the new reserved instance option for EC2 which greatly reduces the cost for more predictable usage patterns.”

  • Thorsten at RightScale has deeper issues with the McKinsey effort. “Its claim that cloud computing (in the guise of EC2) ends up being more expensive per server month for large enterprises than doing it in-house seems fatally flawed,” he writes. “In particular, it doesn’t seem to be accounting for the costs correctly and it  completely fails overlook the benefits of automation in the cloud which ultimately leads to a revolution in the way compute resources are consumed.”
  • Andrew Nusca at ZDNet has reaction from Big Blue: “IBM believes this view neglects to consider that large enterprises are not going to outsource their entire data center operations to a public cloud like Amazon’s,” the company said in an email. “Different workloads demand different support, and as such, there are certain applications that shouldn’t be moved to a cloud model.”  But IBM sees big things for the public-private hybrid cloud model.

About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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  1. You missed James Hamilton's excellent analysis: http://perspectives.mvdirona.com/2009/04/21/McKinseySpeculatesThatCloudComputingMayBeMoreExpensiveThanInternalIT.aspx