This is what I had suspected for a long time. I had suspected that Cloud losing its Value Proposition and Cloud is for Flexibility and NOT for cost saving. However, I did not have research data to support my claim.
Now I have supporting evidence from Byung Chul Tak, Bhuvan Urgaonkar, and Anand Sivasubramainam from Pennsylvania State University who have published a paper titled “To Move or Not to Move: The Economics of Cloud Computing”. The paper attempts to calculate the economics of moving to the cloud over a period of ten years. The tests assumed that hardware and software would be refreshed every four years. The conclusion is interesting:
“Vertically partitioning” = systems in which some of the software (such as application servers) is run in-house, while other programs (such as databases) are run in the cloud.
“Horizontally partitioning” = systems in which all the software is run in-house, though additional copies could be run in the cloud to meet peak demand.
What is interesting to note is that the study does not take all costs of a cloud migration into account. Many costs can’t be quantified, such as the cost of rewriting applications for the cloud, or the cost of retraining IT help to manage the cloud. As a result, the researchers did not factor these costs into their analysis.
So, if those costs are added, migration to cloud becomes further uneconomical.