excess requirements during the two months without incurring the
costs of hosting a traditional infrastructure for the rest of the year.
In 2000, over 45% of capital equipment budget was spent on IT,
however on average only 6% of the server capacity is utilized.
Assuming a 3-year lifespan of a server, the infrastructure and energy
costs alone exceed the purchase price of a server. Cloud computing
leads to reduced infrastructure costs and energy savings as well
reduced upgrades and maintenance costs. Economies of scale for
datacenters cost savings can lead to a 5- to 7-time reduction in the
total cost of computing [3].
One of the components of maintenance costs is the management of
technology, which is potentially made much simpler by using a cloud
computing service. Preset configuration of servers and virtual
machines can be put in place with appropriate applications, security,
and data. (With so much of personal computing moving to virtual
servers or to the cloud, it is perhaps no wonder that the market for
enterprise servers is expected to double by 2013 [8].) This allows for a
more secure environment with the company having better control of
the resources on their network. Cloud computing services allow an
organization to control when, where, and how employees have access
to the organization's computer systems, all managed over a simple
web-based interface (for example, Amazon Web Services (AWS) can
be managed easily through the AWS Management Console). Employees
like the arrangement too, since they are able to make full use of
the company's computer systems using less powerful devices such as
a smartphone or a netbook.