Vendors, not enterprises, should run the cloud, Microsoft says

In a recent report, Microsoft argued that cloud computing is best run by public vendors, not private enterprises. According to the Microsoft paper “The Economics of the Cloud” by Rolf Harms and Michael Yamartino, public clouds appeal to companies in three ways - they offer larger data centers, promote utilization of resources and have low maintenance labor costs.

Private clouds, the paper argues, are at a disadvantage compared to public clouds. Public clouds offer 80 percent lower costs for data center owners and a 10-fold cost reduction for large enterprises, write Harms and Yamartino.

“As more and more work is done on public clouds, the economies of scale… will kick in, and the cost premium on private clouds will increase over time,” they wrote.

While private clouds allow for greater pooling of resources and higher security, Harms and Yamartino argue that they are more susceptible to incompatibility. “Public clouds have all the same architectural elements as private clouds, but bring massively higher scale to bear on all sources of variability,” they wrote.

While public clouds might be more efficient, proponents of private clouds argue that they lack the compliance and security issues of public clouds.