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Cloud Brings Foreign IT Spending to U.S.

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U.S.-based corporations and government agencies have been shipping application development work to offshore IT services providers for years.

Now, thanks to cloud computing, foreign companies are starting to bring their business to providers of data center services located in this country, according to an article at ComputerWorld.com.

Case in point: Grupo Posadas, a hotel company in Mexico that relies on five data centers to support more than 17,000 guest rooms in over 100 hotels. Grupo Posadas IT personnel run three of those data centers. The other two are run by outsourcing partners.

By moving some operations to the cloud, the Posadas IT group will have more time to focus on developing mobile and social networking tools that could help the business grow, he added.

"Our IT strategy is aligned to our growth, and our growth means that we need to be flexible and agile," he said. Cloud computing makes it possible to deploy new services in a matter of weeks. "That is the type of capability that we were lacking - that agility," said Toro Bala.

Keeping Cloud Computing Costs Under Control
So your company has enthusiastically embraced cloud computing. All its website data, customer records, and payroll information sit in the cloud. Life is easier, right? Probably. But cloud services aren't free, and it's a good practice to keep an eye on costs before you're hit with a surprise, according to Businessweek.

Cloudability is one of several startups that helps customers track spending across multiple cloud services and identifies waste and potential cost savings. With so many business departments using so many cloud services, it's common for a company's accountants to confront unpleasant surprises at the end of the month.

Jason Fuller, head of cloud service delivery for Pegasystems, a business software company based in Cambridge, Mass., says it took two employees two or three days each month to find and organize dozens of cloud service bills. Since becoming a Cloudability customer earlier this year, managers now receive automatic e-mails with updates on spending, along with alerts regarding individual accounts deemed likely to exceed budget.

"When you see it every day in your e-mail - today you spent $800, tomorrow $1,800 - you say to yourself: ‘I didn't know I was spending that much,'" Fuller says. "You tell yourself that you really need to cut spending."

He likens it to inspecting water or electricity bills. If you take the time to read them, you're more likely to conserve, he says.

How Green Is Cloud Computing? It's Time for CIOs to Ask
Just how green is cloud computing? Is cloud computing more, less or the same energy-consuming compared with the typical local data center a company owns and operates for its own use? How about compared with a co-location facility, sited for maximum energy efficiency?

What's the green differential in buying services from a bevy of cloud computing providers versus consolidating the enterprise's servers and applications in a private cloud maintained behind the corporate firewall?

SearchCIO.com takes on these questions and more in a recent article.

Most CIOs, however, can't answer these questions because the energy efficiency of cloud is not their problem but the cloud owner's. That kind of punting may be a lost opportunity for CIOs wishing to make the case that cloud computing is in the plus column for green.

Until now, the majority of CIOs have turned to cloud computing providers to save time-to-market, to avoid costly upfront capital investments in infrastructure, for cloud computing's flexibility and to drive efficiencies through automation. Their chief concerns about cloud computing providers are security, service reliability, vendor lock-in and lack of a clear business case

The green aspect is not always on the table, but it should be. According to SearchCIO.com, the results of a recent survey show that by 2020, by spending 69 percent of their infrastructure, platform and software budgets on cloud services, U.S. companies with revenue of $1 billion or more would reap energy savings of $12.3 billion and carbon reductions equivalent to 200 million barrels of oil.

More Stories By Patrick Burke

Patrick Burke is a writer and editor based in the greater New York area and occasionally blogs for Rackspace Hosting.

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