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http://dx.doi.org/10.9723/jksiis.2011.16.3.121

Economic Evaluation of Cloud Computing Investment Alternatives  

Kim, Tae-Ha (중앙대학교 경영대학)
Yang, Ji-Youn (한국고용정보원 데이터관리개발팀)
Yang, Hee-Dong (이화여자대학교 경영대학 경영학과)
Publication Information
Journal of Korea Society of Industrial Information Systems / v.16, no.3, 2011 , pp. 121-135 More about this Journal
Abstract
We provide an economic evaluation model to help managers make reasonable decision for the investment in the appropriate type of cloud computing. Cloud computing can be classified into public, private and hybrid architecture and we evaluate their attractiveness using traditional NPV and real option methods. We conduct economic analysis by comparing traditional software delivery model with various types of cloud computing. The work compares each mode of cloud computing against each other using passive NPV and dynamic real-option method. For more objective and conservative evaluation of investment alternatives, we eliminate conventional benefits that are often subjective or hard to measure, and count only the reduction of investment cost and maintenance cost as benefit. We argue that hybrid and public cloud computing can be undervalued without their intrinsic options such as abandonment, expansion and contraction.
Keywords
Cloud computing; NPV; Real option; Private cloud; Public cloud; Hybrid cloud;
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Times Cited By KSCI : 2  (Citation Analysis)
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