the Awesome Highlighter

One unintentionally funny thing about the report is that, early on, it notes that cloud computing is an ambiguous term, with no set definition. In fact, the report notes, McKinsey found 22 separate definitions of cloud computing. So McKinsey immediately recommends a new definition of cloud computing, seeming to assume that everyone will now adopt it, and the whole indefiniteness about the topic will immediately be settled. McKinsey's definition isn't obviously wrong, but it doesn't necessarily have anything special to recommend it.   remove

three of McKinsey's conclusions   remove

1. Cloud is more expensive:   remove

2. Companies shouldn't focus on internal clouds:   remove

3. Companies can be nearly as efficient as cloud providers:   remove

the report   remove

glosses over a number of issues   remove

1. A Single Example Does Not Reflect All Possible Scenarios   remove

2. The Headcount Numbers Don't Add Up:   remove

3. Don't Forget Capital Expense for Facilities and Associated Assets:   remove

Rather surprisingly, for a sophisticated strategy consulting firm staffed with experienced financial personnel, the analysis contains no capital expenses assigned to the self-host model beyond those of the server itself.   remove

McKinsey repeats a very common mistake made by people skeptical about cloud computing: confusing the marginal cost of a single server in a company's own data center with the total cost of a server hosted by a cloud provider.   remove

4. The Issue isn't Utilization Rate, It's Cost per Unit of Computing Capacity   remove

1. Review your portfolio of applications to understand what cloud computing means to you.   remove

2. Create a viable financial model for assessing the true costs of internal hosting.   remove

3. Evaluate the potential for an internal cloud even if the numbers don't work with an external cloud provider   remove

However, the raw utilization rate is not the point. The main question should be, what does a unit of compute capacity cost me? Google and its cloud brethren run their data centers at around 50 percent of the cost of a typical IT data center, so gaining the same utilization rate as Google still leaves you at twice the cost per compute capacity unit.   remove