Pay-As-You-Go Only Works If You Know Where You’re Going
The subscription model is the core, the very heart of cloud computing’s value proposition.
For non-IT Executives, that model is almost irresistibly seductive, especially contrasted with the traditional on-premise, capital intensive, perpetual-license IT model. Not to mention that the on-premise approach is often associated with long project-lead times, high up-front capital investments, and a dependence upon on a skilled, and therefore expensive, IT staff to implement and maintain applications and infrastructure. In the cloud, maintenance, and the skills and costs necessary to support that maintenance, are (theoretically) shifted to the vendor, with support from IT consulting firms as the case may be. Of course, the vendor does not provide that service altruistically. And there’s the rub.
In short, not every cloud has a silver lining.
When Clouds Scale Up
Although the barriers to entry to cloud computing are relatively negligible (especially when compared to writing an enormous check to some giant software provider, hiring a third party to move in to help implement the new system, and then spending months convincing everyone to change how they work), it’s important for organizations to know with some degree of certainty what their system’s boundaries and endpoints will be — in other words, what the enterprise’s future business will look like in terms of the way it will be using the cloud. The influence on the total cost of ownership (TCO) of differing subscription pricing models in some circumstances can render a full cloud scale-up prohibitively expensive
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