5. Cloud computing — a SWOT analysis
5.1. Strengths
We covered much of the key benefits earlier in Section 2, and we will therefore keep the discussion in this section restricted to ideas that were not explored there. The ability to scale up services at a very short notice obviates the need for underutilized servers in anticipation of peak demand. When an organization has unanticipated usage spikes in computing above its internally installed capacity, it has the ability to request more computing resources on the fly. Cloud computing offers organizations the ability to effectively use timedistributed computing resources. One example is that of an internet photo website Smugmug. The company has relatively stable computing workloads throughout the year; however during the months of December and January the required resources spike to five times the usual workload. Cloud computing allows the company to meet the 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].