Page 28 - How Cloud Computing Is Transforming Business and Why You Cant Afford to Be Left Behind

MANA GEMENT STRATEGIES F O R THE CL OUD R EV OL UTION

It’s an interesting convergence, but in fact it’s impossible
to talk about the cloud without citing how anyone can use it
at low hourly rates. Those big data centers produce economies
of scale that can be delivered to the end user, whether that
user is an individual or a business. Amazon charges 8.5 cents
per hour for the use of a server in its EC2 cloud infrastructure.

Rackspace, another provider of cloud infrastructure (servers
and storage, with automated self provisioning), has lowered
the cost further to 1.5 cents an hour, although at such rates it
may be bidding for market share, not making profits. These
rates are presumed to be lower than corporate data center costs
of operation because fewer staff members manage many more
servers through automated controls. Microsoft executives in

statements to the Chicago press said they will manage their
new data center there with 45 people, including the janitors
and security guards. It’s a data center designed for 300,000
servers, although it hadn’t reached that number as this was
being written. Many corporate data centers have one system
administrator focused on one application, or a handful of ap-
plications. In the cloud, one system administrator supervises
hardware running hundreds of applications.
Beyond businesses, many consumer end users have shown

an appetite for consuming new services on the Web. They enter
personal data in MySpace; post pictures at flickr.com and both
pictures and current commentaries in Facebook, and disclose
professional associations on LinkedIn. The cloud offers a busi-
ness model where many services, including massive amounts
of computer server power, storage, and network bandwidth,
can be made available at a low price, even a price that seems

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