The Register has a decent article about the capital cost of big IT in the cloud and on local or hosted servers.“despite all the marketing and the chest beating, unless you have fully modern designed-for-the-public-cloud burstable workloads, the public cloud is rarely cheaper than local gear. Even with the most obviously cloud-friendly workload – disaster recovery – it’s only a clear win in circumstances where the most expensive possible local equipment was chosen.” The bottom line is that most big organizations will not save capital using the public cloud because the public cloud usually uses top-end equipment. This does not consider cost of operation which The Reg claims is a wash. You still have to take care of things like content so they see little benefit to the cloud except that it cuts out a lot of friction.
Public clouds are flexible. You don’t have to worry about running out of space or power. Someone else is doing that and it’s included in the price. I still think that the public cloud makes a lot of sense for SMB and smaller organizations which don’t have a large IT-staff. Schools, for instance, often have just the computer-teacher and he has a day job… Paying someone a little to do a top notch job of managing the physical IT makes a lot of sense compared to a less than perfect local operation regardless of price. There’s still the matter of outages. You can get them locally or in the cloud though. I’ve seen lots of local servers have conniptions (mostly that other OS…) and you can have network problems locally or remotely. Bad things happen. It’s just better if some experts are instantly able to deal with them and those experts are on some other payroll.