One potential problem with cloud computing for us is the payment model

August 9, 2015

I spend a certain amount of my spare time trying to think about how we might use cloud computing, and also about reasons we might not be able to. Because of the special nature of universities, one of the potential problems for us is how it changes the payment model. As many people have observed, cloud computing replaces a large one time up front cost (to buy and deploy hardware on premises) with a steady ongoing cost (the monthly cloud bill).

In many environments, this is an attractive change all by itself; it lowers your initial costs, it lets you scale things down if you turn out not to need as much as you expected, it leads to smoother budgets, and so on. Unfortunately, universities are not anything like normal environments. In particular, in universities it is much easier to get 'one time only' money than it is to get an ongoing budget (cf), and even once you've got an ongoing budget the extra challenge is holding on to it for years to come.

The flipside of cloud computing having a steady ongoing cost is that once you buy into cloud computing, you are committed to that cost. Your (cloud-based) infrastructure requires you to keep paying for it every month. Fail to pay at all and you get turned off; be unable to pay for all of it and you have to reduce your infrastructure, shrinking or losing services. By contrast physical hardware bought with one time money is yours now until it falls apart beyond your ability to fix, no matter what happens to budgets in the future. And if does start to fall apart (and it's important), the odds are pretty good that you can scrounge up some more one time money to keep things going.

Perhaps I have just existed in an unusual university environment, but my experience is that ongoing budgets are far from secure no matter what you might have been promised. Sooner or later a big enough budget cut will come up and, well, there you are. This is of course not an issue that's unique to universities, but the lack of a ROI does make it harder to mount certain 'this is worth spending the money' arguments in defense of your ongoing budget.

(As was pointed out to me recently, it's also not enough to just hold on to a fixed-dollars ongoing budget. Your ongoing budget really needs to be adjusted to account for 'inflation', in this case any increases in cloud computing prices or changes in your provider's charging models that mean you pay more.)

On the other side, having a monthly cloud computing bill might make it easier to defend its ongoing budget item precisely because any cuts directly require immediate reductions in services. A budget reduction wouldn't be an abstract thing or living with older hardware for longer, it'd be 'we will have to stop doing X and Y'.

Written on 09 August 2015.
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Last modified: Sun Aug 9 02:40:55 2015
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