When Cloud Computing Doesn’t Make Sense - Bits Blog - NYTimes.com

On a related note, see this week’s InformationWeek cover story, Why 'Private Cloud' Computing Is Real -- And Worth Considering 

The McKinsey study, “Clearing the Air on Cloud Computing,” concludes that outsourcing a typical corporate data center to a cloud service would more than double the cost. Its study uses Amazon.com’s Web service offering as the price of outsourced cloud computing, since its service is the best-known and it publishes its costs. On that basis, according to McKinsey, the total cost of the data center functions would be $366 a month per unit of computing output, compared with $150 a month for the conventional data center.

“The industry has assumed the financial benefits of cloud computing and, in our view, that’s a faulty assumption,” said Will Forrest, a principal at McKinsey, who led the study.

When Cloud Computing Doesn’t Make Sense - Bits Blog - NYTimes.com