Wired Magazine tells how some businesses are switching away from cloud computing due to increased costs or security concerns.
This makes sense, cloud computing is just a way of doing business and different methods work for different organisations.
One of the driving factors is cost, outsourcing your IT requirements to a public cloud company can make sense for a fast growing or cash strapped small business but for a larger organisation it can quickly become expensive.
Those costs though have to be examined carefully. The Wired article itself shows how major expenses can be overlooked in breaking down MemSQL’s expenses.
This past April, MemSQL spent more than $27,000 on Amazon virtual servers. That’s $324,000 a year. But for just $120,000, the company could buy all the physical servers it needed for the job — and those servers would last for a good three years. The company will add more machines over that time, as testing needs continue to grow, but its server costs won’t come anywhere close to the fees it was paying Amazon.
Missing from that calculation is the cost of employing sysadmins to maintain the servers. It’s quite easy to see how the staff expenses could easily eat up the 200,000 dollars a year in hosting costs.
Added to the staff costs are the security and continuity risks — backups, disaster recovery and fallover systems are not cheap and a handful of system administrators won’t have the resources to deal with all the complexities of modern information security.
There are many good reasons not to move a businesses’ IT systems onto the cloud, but it’s best to be careful when evaluating the costs and risks.
Yes I also read that post – someone posted it to the Cloud-Powered Businesses LinkedIn Group. One of the commenters in the group mentioned that the article seemed to be comparing private cloud vs on-premise and that it was a misleading headline for failing to point that out.
Obviously with private cloud you miss out on the efficiencies of public cloud. The article doesn’t reveal enough to know for sure. I’d be wary of believing that headline and those figures without knowing exactly what they were buying.
Cloud too expensive? Ask yourself (you’ve mentioned a few of these)… do you plan on putting these servers in a rack room or just a broom cupboard? Did you price in operating systems & software licenses? Redundancy? Geographic redundancy? UPS power? Cooling? Sysadmins? Spare servers for instant expansion? Spare *empty* racks for expansion? The process of choosing, purchasing, installing, wiring, commissioning, maintaining the hardware? Disposal & same again in 3 years?
Note that MemSQL still outsource much of what I just mentioned (to Peak Hosting).
The lesson here is to continually re-evaluate and re-assess your position. In the early, unpredictable, capital-starved growth phase the Cloud makes perfect sense. When you’ve got customers and cash you’ve got decisions to make – a nice problem to have.
Got Sekrits? Hell, the NSA can see into any computer anywhere anytime anyway. Well, you have to assume that nowadays. See also: Groklaw.
Absolutely. I work at a fast growing medium sized company which outsources most of its technology services, and it’s most likely the way of the future. With hosting and security and maintenance requirements ever changing and getting more complex, specialized providers are becoming best placed to handle everything tech.