According to Erik Brynjolfsson, Paul Hofmann, John Jordan
Meanwhile, companies of a certain size can get the best of both worlds by deploying private clouds. Intel, for example, is consolidating its data centers from more than 100 eventually down to about 10. In 2008 the total fell to 75, with cost savings of $95 million. According to Intel’s co-CIO Diane Bryant, 85% of Intel’s servers support engineering computation, and those servers run at 90% utilization—a combination of strategic importance and operational performance that would negate any arguments for shifting that load to a cloud vendor. Ironically, even as the utility model is being touted for computing, the highly centralized approach is becoming less effective for electricity itself: an emerging distributed power generation system features smaller nodes running micro-hydro, wind, micro-turbines and fuel cells. What’s more, many enterprises do in fact generate their own electricity or steam, for the same reasons they will continue to keep certain classes of IT in house: reliability, strategic advantage, or cost visibility.
Source: “Economic and business dimensions: Cloud computing and electricity: beyond the utility model”, Comm. of the ACM, Volume 53, Number 5 (2010), Pages 32-34.