At this point, youve laid out very little capital to get started, your development costs were kept relatively low and youre service is being managed by your Cloud provider. This sounds resoundingly like the story many startups delivering Cloud-based services are prescribing as success. However, because you highly leveraged with a significant number of dependencies on external agencies, your cost of risk is significantly higher than if you has hosted it in a co-located facility with less compute capacity and used your own employees, which maintains knowledge internally to your company, which causes you to set a higher price point for your unit of billing, which results in slower uptake in sales.
This example is not designed to deter Cloud adoption, but merely to illustrate that common CapEx/OpEx, TCO, or ROI calculations that have been expressed to date, at best, illustrate the immaturity of understanding of the costs associated with Cloud computing from the perspective of being a Cloud tenant.
JP Morgenthal works as a senior principal architect with QinetiQ North America's Mission Systems Group providing enterprise and SOA architecture guidance for federal civilian agencies and an independent analyst for jpmorgenthal.com. Prior to joining QinetiQ NA, JP founded Avorcor where he developed a SOA-based Enterprise retail/manufacturing Platform as a service PaaS that has been the foundation of three award-winning industry solutions for customers. Morgenthal is also author of Enterprise Information Integration: A Pragmatic Approach, which defines a methodology for using SOA and semantics to simplify integration.