Understanding how to value cloud computing

A core reason organizations adopt a cloud IT infrastructure is to save money. The traditional approach of analyzing Total Cost of Ownership no longer applies when you move to the cloud. Cloud services provide the opportunity for you to use only what you need and pay only for what you use. We refer to this new paradigm as the Total Cost of Operation.

Eliminate Upfront Sunk Costs Organizations considering a transition to the cloud are often driven by their need to become more agile and innovative. The traditional capital expenditure (CapEx) funding model makes it difficult to quickly test new ideas. The AWS Cloud model gives you the agility to quickly spin up new instances on AWS, and the ability to try out new services without investing in large upfront, sunk costs (costs that have already been incurred and can’t be recovered). If you are using the cloud you can return CapEx to the general fund and invest in activities that better serve your constituents.
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