Automation isn’t some special brand of soup and there’s no “automation nazi” who can deny access to its benefits.

The recent McKinsey report on cloud computing has pundits everywhere choking on their donuts and scrambling to dispute the report’s findings, which essentially end up saying “cloud ain’t cheaper.”

I’m not going to rehash the arguments. I’m not going to analyze the report. But I am going to dig into a few comments on the report by Thorsten at RightScale who started off by saying:

“Its claim that cloud computing (in the guise of EC2) ends up being more expensive per server month for large enterprises than doing it in-house seems fatally flawed. In particular, it doesn’t seem to be accounting for the costs correctly and it completely fails overlook the benefits of automation in the cloud which ultimately leads to a revolution in the way compute resources are consumed.” [emphasis added]

On the one hand, he’s probably right. Most cost-based analysis of software, hardware, outsourcing, etc… tend to fail to recognize soft-costs associated with implementation. So the reality is that the McKinsey report may indeed be flawed in that the cost-reductions associated with automation and thus the streamlining of processes were not be considered.

And yet the statement appears to imply that automation is peculiar to “the cloud”, at least as it is perceived by purists who believe such constructs can only exist “out there” and cannot exist “in a localized, on-premise cloud” environment. That’s not necessarily what Thorsten was trying to say, but there is a feeling of exclusivity often exuded by some – usually providers - that attributes all the benefits of automation and virtualization to “public” cloud environments alone.  But there is not just one provider of automation, and its existence in the cloud does not preclude its use in other environments, including the data center. Automation isn’t some special brand of soup, and there’s no “automation nazi” who can deny access to its tasty benefits.

This ultimately means that some of the arguments against the McKinsey report are equally flawed.

Thorsten later argues a bit more on costs associated with automation:

What the report seems to completely overlook is the possible reduction in sysadmin costs. One of the huge benefits of the cloud is that the entire computing infrastructure can be automated. Top to bottom. That saves a lot of sysadmin labor and in the end it means that requisitioning more compute capacity can be done by the end user somewhere in a business unit instead of being an IT chore.

If it can be automated “out there” it can be automated “in here”. Surprise! That will save a lot of sysadmin labor inside the data center, too.

Granted, the administrative costs (operating expenses) should be reduced even further by using the “public cloud” simply because those costs, like resources, are shared. Which is probably the point Thorsten is trying to make, but that fails to really come through. Maintaining a data center presence necessitates management and maintenance which will continue to incur operating expenses in a local implementation that obviously cannot be shared with other organizations. The cost reduction from automation of processes, however, should be the same regardless of where “the cloud” physically resides.

The benefits of automation in general are not peculiar to cloud computing providers, it’s simply that the cloud computing providers arrived on the scene first. In fact, the need for automation in the organizational data center as a means of reducing costs is certain to drive innovation in existing network and systems’ management vendors as well as spur the creation of startups providing “cloud computing automation” software designed to minimize human intervention and automate all those mundane tasks that are driving the costs of IT through the roof.

It isn’t like administrators haven’t spent years automating tedious processes in the first place whether via custom scripts or command-line tools or full-blown automation systems. They “get” it, and they understand that automation results in a huge savings in terms of time and money. They certainly, therefore, are capable of applying that same logic – and expertise - to on-premise cloud computing and virtualized environments.

Interestingly enough, automation of an on-premise internal cloud would free up IT resources, such that another of Thorsten’s arguments might also become moot.

The report also doesn’t take into account the cost of the red tape that surrounds corporate IT. Things the business can’t do because IT can’t support them.

If IT isn’t spending its time worrying about all the little mundane administrative tasks then it just might have time to support the business in the manner the business would like to become accustomed.

There are so many other factors that go into the decision to use or not use the cloud that basing a decision “to cloud or not to cloud” solely on financial factors is just not reasonable.

A recent ZDNet story cited a silicon.com study in which CIOs overwhelming decided that cloud was not a viable solution for complete outsourcing at this time for several reasons, among them security, reliability, and maturity. There are also issues regarding control and the ability of the business and IT to influence and manage their applications in the way they have become accustomed when moving them to a public cloud.

So while cost is certainly one of the most influential factors in the decision-making equation “to cloud” or “not to cloud”, it isn’t the only one. And while the McKinsey report may be ignoring some of the cost issues that are certainly important to consider, some of the outrage directed at the McKinsey report is equally guilty of ignoring all the other factors that go into such decisions.

Related blogs & articles:

• Control, choice, and cost: The Conflict in the Cloud

• McKinsey doesn’t ‘get’ the cloud…

• Roundup: The McKinsey Cloud Report

• Dark cloud surrounds cloud computing

• Will cloud computing be more expensive?

• The McKinsey report on cloud computing is wrong. And Right.

• McKinsey & Co – Clearing the Air on Cloud Computing

• The days of IP-based management are numbered