Microsoft Exec Says Cloud Cost Savings Are 'Too Big To Be Ignored'

While many businesses are developing private clouds as a tentative first step into cloud computing, a Microsoft executive at a cloud industry conference in Silicon Valley said that, eventually, the company will plug into public cloud utilities because cost and efficiency benefits will be impossible to ignore.

Rolf Harms, director of corporate strategy at Microsoft, laid out the "Economics of the Cloud" in a presentation at Cloud Connect, a conference held March 7 to 10 in Santa Clara, Calif. Although some enterprises prefer to operate a private cloud behind their own firewalls to maintain control of their IT resources and secure their data, the current objections to public cloud adoption will become irrelevant over time, and some of the current objections to public clouds will turn out to be advantages.

For instance, public clouds can spread computing costs over multiple tenants, but businesses are reluctant to have their data on the same server as a competitors' data. They also worry that a cyberattack on a neighbor's cloud in a multitenant environment could cause collateral damage to theirs.

However, Harms says, one advantage to multitenancy is that the cost of upgrading or patching apps is amortized over those multiple tenants, to the benefit of all. Furthermore, large public cloud operators typically have more resources and know-how to secure cloud environments than a typical corporate IT staff. Microsoft laid out its strategy to compete in cloud computing a little over a year ago and has been promoting a platform as a service (PaaS) offering based on its Windows Azure, the cloud version of Windows Server.

Private clouds may deliver better cost savings compared with a traditional data center, but public clouds reduce total cost of ownership (TCO) even further. A November 2010 Microsoft study calculates that public cloud operations can deliver an 80 percent reduction in TCO compared with a non-cloud environment, a number "that's too big to be ignored," Harms said.But while Harms predicts an eventual transition to public cloud computing, he says it may not be 100 percent and it won't happen quickly. He described cloud as the next big leap in computing technology, preceded by mainframe computing and the client-server architecture, with mainframe computers still in use today.

"There are many reasons today to do things on-premise, and there will be reasons for doing that for a number of years. What we're saying is that there is going to be a shift over time when you can do more stuff off-premises," Harms said.

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