How much cloud do Telstra’s $842 million buy?

Fierce Telecon reports that:

Telstra … [is] going to spend over AUD 800 million (USD842 million) to expand its cloud capabilities through 2016.

This is presumably to compete with Amazon, Rackspace and the like. Let me see:

  • call it five years, so it’s $168m per year
  • if only invested in storage at Amazon, at 1.5 GB per dollar per year ($0.055 per GB per month) that would make a quarter million terabytes
  • if only invested in CPUs that would give them anywhere between 63,000 (quadruple extra-large at $8000 over 3 years) and over 6 million (micro at $82 over three years) virtual machines.

Not counting any price decreases over those five years.

Put in these terms, it’s really not clear to me whether as a telco, one shouldn’t simply start reselling somebody else’s cloud. It sure would be a lot simpler; perhaps even a lot more profitable?