Cloud Computing and SOA Convergence in Your Enterprise: A Step ...

70 Chapter 4 Making the Business Case for Clouds
Perhaps it is better to use an example. Let’s say you are supporting an inventory
management system and you leverage cloud computing resources
for database-as-a-service and platform-as-a-service. In this example, you
avoid the cost of data center–bound resources, and more importantly, the
cost of the risk. By leveraging cloud computing resources, you avoid the investment
in a set of on-premise computing resources that have two major attributes:
First, they require a specific amount of capital investment for
hardware and software; second, they have an upper limit in scalability from
the point where you need to purchase additional resources to scale up processing
to meet the needs of the business.
In Figure 4.3, you can see that the investment of $500,000 in hardware
gets you to a specific number of transactions per day, and then you have to
invest again to support the increasing load as transaction volumes increase.
You have excess capacity you are paying for, and you are taking on the risk.
Indeed, you always have to keep additional capacity on hand in order to handle
the peak transaction processing loads. This does not consider the disruptive
nature of purchasing, configuring, installing, and testing new hardware
and software.
In this scenario, there is the risk that, for the amount of capital committed,
it will provide either more capacity than is required for a specific period
of time or not enough capacity for a particular period of time. Either way,
you are running a risk.
$1,000,000
$500,000
Hardware/Software
Transaction/Day
Year
1
Year
2
Year
3
Year
4
Year
5
Figure 4.3 When using an on-premise approach, you have to purchase hardware
and software to support the current processing load, and then reinvest in the
future in order to scale. The risk is on you.