Cloud Computing vs. Data Center Computing

Although it may seem that running VMs in the cloud is not much different from running them in your data center, there are significant differences between operating IT environments in the cloud and an on-premise or colocated data center.

Rent Instead of Own Resources

Corporate data centers are filled with servers, disk arrays, and networking equipment. This equipment is often owned or leased for extended periods by the company, a model that requires companies to either spend a significant amount of money up front to purchase equipment or commit to a long-term lease for the equipment. This approach works well when an organization can accurately predict the number of servers and other equipment it will need for an extended period and it can utilize that equipment consistently.

The model does not work as well when companies have to plan for peak capacity that is significantly higher than the average workload. For example, a retailer may have an...