Cloud Computing does not cut down duplication of resources. Virutalisation does!

Someone wrote an article saying that cloud computing cuts down total cost of ownership because of savings in duplication of resources needed for each application (e.g. servers). That to me is not the true advantage of cloud computing.

Reason is very simple. You can achieve the same savings just by going for the virtualisation route. Once you have virtualised your servers, it's quite simple to manage your resources on demand. Virtualisation may be quite painful to implement at the start but once implemented, you will be able to make better use of your server resources, especially for those instances where you buy 1 server just to run that special batch job from midnight to 4am in the morning. Allocation of resources can also be dynamic, moving resources from one application to another when the application needs it most.

So you want to cut down your TCO? Virtualisation is your answer.