Cloud vendors are quick to tout the benefits offered by on demand IT compared to traditional on premise IT service models. Their marketing materials offer many examples of the benefits realized from moving to the cloud for increased service agility, efficiency, and cost savings. The lure of cost savings generated by moving from a capital expenditure to operating expense based, on-demand service is often cited by IT leaders as a key factor in their decision to move to cloud service support.
Indeed many federal agencies have committed significant dollars to the promise of cloud efficiencies and IT cost savings. As of 2014, it is estimated that cloud investments represent 5% of total IT spending, the equivalent of approximately $3B annually (IDC Press Release from 9/16/14).