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Jim Stogdill
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Thanks for the comments everyone. Simon, you are right that I didn't consider all of the reasons why public cloud will be important, I only looked at price. I meant this is as a simple analysis that says "no matter how cheap cloud computing gets, even if it's free, that won't on its own be a compelling argument for everyone in the face of real or perceived loss of control." The point of my back of the envelope calculation was just to show that the numbers aren't so ridiculously compelling that control will end up being a less important factor. I agree that elasticity is important - and in cases where the compute required isn't connected to customer records etc. it will be easier to take advantage of. I reached out to a friend of mine (who will remain anonymous) with the question "Are you guys considering moving anything to public cloud?" Here is his partial response: "Public cloud has our security people in a frenzy. We are so risk averse to putting client sensitive data in the cloud. It has been such a battle to even have the conversation. I think we are slowly warming up to the idea that we can do this and that the industry is moving this way. It really comes down to what kind of data. The moment it touches client account information, it becomes off limits. Segmentation data about our market, firm data, etc, those tend to be okay but is it worth it is the question. Worth isn't just the cost of moving it from the data center to the cloud but the dev to unwind it or build new services. In general, I think our data center costs after a zillion years of doing this are very low."
Thanks for you comment David. I agree with you. There is no doubt that Walmart and many others are building a lot of stuff (more expensively) than they could get from Amazon (or other places). My post tries to give one of the answers to your last question. I just don't think cost (or price) is the only dynamic at play. I think there is habit, the legal counsel's arguments, control, regulatory concerns and a whole lot of other things in a world where cost is very different, but small on a total-part-of-the-budget basis.
Perry, Thanks for your thoughtful comment. The irony of how we came to this (your first point) would be funny if it wasn't ridiculous. And I agree with you, I think without those 4 million comments we would be hearing a very different result and Congress would not have (so far) stayed out of it. Wrt comment #2, I'm not as concerned. I think there has always been plenty of demagoguery. I'm more concerned that Congress these days is so quick to contribute to the dumb rather than try to engage in substantive debate themselves.
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Mar 15, 2010