For applications that were born on the Enterprise, this daily or weekly dynamic often does not exists. Or the argument is that the maximum capacity has to be available all the time to meet the expected SLA. The conclusion is that a shared Cloud has no benefit over dedicated resources for such workload. But that overlooks several important points, two of which are shown in this diagram.
The blue line shows the cost for a dedicated infrastructure over 4 years, imagine for a double digit number of servers, with the capacity fixed for the time period. The green line represents the resources provided in a shared Cloud, with per-device pay-as-you-go pricing.
Consider two dynamics
For a contract period of 4 years, the initial setup of a dedicated infrastructure usually takes 6 to 9 months, for the ordering of the hardware, setup, configuration and creation of the workflows and runbooks to manage the systems. This yellow area represents about 6% to 10% of the total cost of the infrastructure for the 4 year period! In a the IBM shared Cloud the onboarding and setup takes on average less than 3 weeks because the Cloud is already set up an operational.
During the 4 years inevitably there is some fluctuation of capacity actually required. For example, during some version or release upgrade, additional systems are needed for several weeks or months. Or due to consolidation, a number of systems are no longer needed. A dedicated infrastructure will need a capacity management process and additional investment before more resources can be added. And unused resources incur cost for the provider; by definition, dedicated resources cannot be shared with other customers. Very different in a shared Cloud, where the provider can quickly reassign resources from one client to another. IBM Cloud Managed Services reduces the provisioning times for new systems from months to days.
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