Microsoft: Economics of the Cloud

· Microsoft Cloud Solutions
Authors

Microsoft provides an executive briefing on Cloud Economics in this 22 page white paper.

Key highlights include:

“The industry is at the early stages of building data centers at a scale we‘ve never seen before” – Analysis of the impact of power savings through new super data-centers.

“The model indicates that a 100,000-server datacenter has an 80% lower total cost of ownership (TCO) compared to a 1,000-server datacenter.”

Conclusion:

“Based on our analysis, we see a long-term shift to cloud driven by three important economies of scale: (1) larger datacenters can deploy computational resources at significantly lower cost than smaller ones; (2) demand pooling improves the utilization of these resources, especially in public clouds; and (3) multi-tenancy lowers application maintenance labor costs for large public clouds. Finally, the cloud offers unparalleled levels of elasticity and agility that will enable exciting new solutions and applications.”

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