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Tech Your Facts: Is Cloud More Expensive Than On-Prem?

Published: February 8, 2023

Back in the 19th century, a fellow by the name of James Watt invented the Watt steam engine. It was a big improvement on the steam engine of the time, which used much more coal to get the same amount of energy. 

So, did coal usage in England decrease with Watt’s new invention? No, it soared dramatically!

Why? The reason was that because Watt’s invention made coal more cost-effective, people could use the engine in a wider range of industries, to solve all sorts of problems. So people used it more — in fact, it helped “fuel” the industrial revolution. 

Now, I’m not explaining this to just give you some interesting historical tidbits. This rebound is known as the Jevons Paradox — and it doesn’t apply only to coal, but any resource, including the cloud!

When an organization adopts cloud services, staff are empowered with a tool that is cheap and can solve a wide range of problems. Once they realize how valuable it is, they start using it everywhere — which in turn means they may well spend more money on cloud than they were on-prem. To paraphrase the old Pringles slogan, “Once they pop, they can’t stop.” 

At this point, you might conclude that the cost of cloud is both cheaper and more expensive: cheaper with the actual cost of the service, but more expensive because of how often a business winds up using it. Again, this doesn’t quite take everything into account either.