Friday, April 17, 2009

Big Business Disconnect

A newly released report from McKinsey & Co. claims that trying to adapt to the Cloud Paradigm would be a money-losing mistake for most large corporations. The McKinsey study, “Clearing the Air on Cloud Computing,” concludes that outsourcing a corporate data center to the Cloud doubles the cost. The study figures are based on Amazon’s Web Services prices. According to McKinsey, the total cost would be $366 a month per unit of computing output compared with $150 a month for conventional data centers.

However, they then go on to say the Cloud can be beneficial for small and medium-sized companies with revenues of $500 million or less.

Personally, I don't spend alot of time feeling sorry for companies with revenues over $500 million. If these giants don't benefit from the Cloud Paradigm, then all the better. Micro and small businesses make up the largest majority of companies in the world. It's high time we got the benefits of big business IT at prices we can afford.

What McKinsey doesn't grasp is that the Cloud is all about leveling the playing field. Before big business had all the advantages when it came to technology. More money let them buy better hardware and software. The tools they had at their disposal gave them a substantial edge.

Not any more. Now the Cloud gives even the smallest business access to Fortune 500 tools.

Within 5 years you'll see McKinsey changing their tune. Like all paradigm shifts there are those who will do everything to deny the change. McKinsey just can't imagine the new paradigm.

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