Cloud Computing Too Expensive?

I don't get it, where is everyone getting this idea that cloud computing will be too expensive? Ive read this in several locations now and just don't get it.

Cloud computing has many definitions as we are all starting to better understand. However, to me there is one guiding premise and that's "Efficiency". Efficiency is followed closely by scaleability and availability. The most interesting thing about those three words being together is that they can all be true if the cloud is architected correctly.

Why would we pursue the cloud option if it didn't buy us something? The question is "does it buy us something that is more than we currently have or just an alternative?"

To me the cloud represents an opportunity to make a small business' IT more like a large business. With the cloud the idea of geographic diversity and high availability should be a given. Neither high availability nor geographic diversity are a given for most small organizations. A traditional IT shop has to make pragmatic desicions about how much it can afford to do with a very limited set of IT and corporate resources. Generally that means delivering basic IT services, which most often doesn't include redunancy or easy disaster recovery or even better easy disaster avoidance. IT in small companies also has difficulty providing services to employees in far flung locations and even if they do, supporting them is a costly prospect.

So here's another question:
If you can build a replacement IT environment that does everything your old environment did for a similar or slightly higher cost all while enabling some of the additional benefits of high availability, redundancy, lower cost of ownership, and geographic diversity, wouldn't you want to do that?

To me high cost means I pay more for one thing than I do another but receive the same benefits. High value is when I can pay roughly the same cost for something new as I did for something old and reap many additional operational and strategic benefits. I've often heard people complain that VMware virtualization was expensive and I always ask "as compared to what?". How can something that drives down your cost of ownership and whose ROI is often times measured in months not years be considered expensive? The same should be true for the cloud!

If your cloud provider can't demonstrate how they can provide you a service with capabilities that exceed your current environment and do it for the same or less than you could, then they're probably doing something wrong!

More of the cost benefit of cloud next time.