The Numerator

Cloud computing could generate big-time savings

• By Joab Jackson
• Nov 06, 2009

Many analysts have said agencies could save big on cloud computing because pooling computing jobs costs less in hardware and support. Consultants at Booz Allen Hamilton crunched the numbers to determine how much an agency could save by going with cloud computing. After some initialization costs spent on moving applications to the cloud, agencies could save as much as 70 percent per year in operational costs.

Booz Allen Senior Associate Gwen Morton and Associate Ted Alford compared the life cycle cost to run 1,000 servers in a managed environment in-house, through a cloud offering from a commercial provider, from a centralized in-house cloud, and a hybrid of a public and private cloud.

Life cycle costs of running 1,000 servers

In-house:         $77.3 million
Private cloud: $31.1 million
Hybrid cloud: $28.8 million
Public cloud: $22.5 million

Source: Booz Allen Hamilton