There was a recent post on GigaOm (a daily must read for me) by Geva Perry titled “On Clouds, the Sun and the Moon”. As you might expect, the main topic of the post is cloud computing.
However, rather get into the technology behind Cloud Computing, Geva gets all Adam Smith on us. The primary point of the post is about the economics for the companies that actually supply the cloud (Amazon, Google, etc.)…. not the thousands of businesses that rely on the cloud for their computing needs.
Some of the reasons why it is much more feasible for a single company to own and operate a large data center are as follows:
- Specialization (aka Division of Labor)
- Increased Purchasing Power when you buy in bulk
- Increased Utilization across the entire farm (especially when clients are geographicly diverse)
All of these points are common sense to any one who has taken Economics 101. Nothing groundbreaking here.
However, the final point is something that is a bit more interesting. It is a strategy that is coined “Follow the Moon“. At a time when energy costs are increasing on an almost daily basis, it is more efficient to run a data center during the night when temperatures are lower and less colling equipment is needed. Therefore, if a large cloud provider has data centers throughout the world, they can shift the load from one center to another in order to reduce overall energy costs.
I’ll be the first to admit that I have no idea if this can save tangible dollars in the real world. But, it is an interesting theory and may just be another reason to let the big guys worry about keeping the cloud up and running so you can tap into it as needed for your business needs.
Read the full post On Clouds, the Sun and the Moon
Tags: blogs, cost savings
