Should a firm build an internal computing cloud or use an external cloud services provider?
If the primary concerns of CEOs are considered, namely, reducing complexity, driving innovation, focusing on core competencies and cost control, the reasons touted for building an internal computing cloud cannot be supported in a rational analysis.
An internal computing cloud misses the whole point of cloud computing and delivers very few business benefits.
Cloud computing should be viewed in the same decision-making framework as other non-core services such as logistics.
It is the irrational, but perfectly predictable, elements of human nature which offer the greatest barrier to the adoption of an external computing cloud.
Although firms may proceed to build an internal computing cloud for non-rational reasons, this paper will help to determine the opportunity cost to the firm of doing so.