Not just a Cloud

While browsing the rather content heavy site of Oracle, I came across this interesting white paper on cloud computing.

Platform-as-a-Service Private Cloud with Oracle Fusion Middleware

at http://www.oracle.com/us/technologies/036500.pdf

It basically says that Oracle has the following offerings for PaaS-

Application grid

Oracle SOA Suite and Oracle Business Process Management Suite

Oracle WebCenter Suite

Oracle Identity Management

Here is why traditional software licensing model can be threatened by Cloud Computing. These are very basic and conservative costs. If you have a software budget you can run the numbers yourself.

Suppose you pay $10,000 for an annual license and say an extra $5,000 for hardware costs for it.Assume you are using in house resources (employees) which cost you another $50,000/year.

The per hour cost of this very basic resource is Total Cost/ Number of hours utilized.

Assuming a 100 % utilization at work hours ( which is not possible) but still .

That’s a 40 hour week * 48 weeks ( including holidays).

or 33.85 $ per hour.

That’s the cut off point for you deciding to offshore work to contractors or outsourcing.

Assuming say a more realistic 80% utilization the per hour cost is= $42.31/hour.

Now assume we cant outsource because of data hygiene or some reason- so we take the same people costs/ exclude them and calculate only the total cost of ownership ( software and hardware).

thats $15,000 per 0.8 per 40*48 hours.

That’s still an astonishing 9.76 $ per hour.

Compare this cost with the cost of running a virtual instance of R on an Amazon Ec2.

Eg. http://biocep-distrib.r-forge.r-project.org/

or using http://www.zementis.com (which is now introducing an Excel add in as well at http://www.zementis.com/Excel-Ai.htm)

The per hour costs are not going to be more than 3.5 $ per hour. Thats much much better than ANY stats software licensed today on ANY desktop /Server configuration.

See the math. Thats why cloud is much more than time sharing, Dr G 😉

First of all, I don’t see anything greatly new and wonderful and different about cloud computing. It was timesharing way back in ’60. It’s not a whole lot different. I certainly have issues asking a bank to send us all their data and we’re going to put it up on a cloud. They’re going to say, ‘What about security? How will I know who else is up there in that cloud?’ I don’t know, it’s just a cloud.-

Dr Jim Goodnight, SAS Institute.