One Cloud Cost Advantage That May Be Irresistible

06.04.2009

1. Power: 45%; this comes from the Denegri paper. 2. Property Taxes: 22%; this also comes from the Denegri paper. 3. Operations Staff Costs: 50%; I've just worked out this estimate by comparing the headcount numbers from the Denegri paper to research I performed on the Internet.

The next question is, what proportion of the total cost do each of these factors represent? Here is a swag:

Power: 40%; this comes from the Microsoft paper, please note that the Denegri paper quotes Microsoft (a different Microsoft source from the authors of the paper, presumably) as estimating power at 82% of total data center cost. By using the lower Microsoft paper estimate, we are reducing the total cloud center cost advantage vis a vis traditional data center.

Property Taxes: 20%. In the Denegri estimates, he calculates total costs, and property tax comes to around 20% of the total.

Operations Staff Costs: 40%. This is the remainder of total cost left to be assigned after removing Power and Property Taxes; however, it accords pretty well with the observation in the Microsoft paper that operations is a very large percentage of total data center cost.