Cloud computing: a rather expensive alternative

I was al­ways con­vinced that buy­ing own servers is the most stu­pid thing a com­pa­ny can do at the era of cloud com­put­ing. If I deal with servers, it is ex­clu­sive­ly be­cause:

1. I love deal­ing with servers. This alone is enough.

2. There are a lot of things to learn in this do­main, and I'm lov­ing it.

So de­spite the amount of mon­ey one have to pay for serv­er hard­ware and the risk of fire haz­ard, loss of in­ter­net con­nec­tiv­i­ty, etc., I still pre­fer hav­ing my own servers in­stead of us­ing cloud ser­vices.

But then, I was read­ing the Server­Fault blog and it ap­peared to me that Stack Ex­change is an ac­tu­al com­pa­ny which should be mo­ti­vat­ed by prof­it, rather than a deep love to­wards the host­ing of servers. So what are they think­ing about, I asked my­self? And then, I start­ed to com­pare the prices.

Com­par­ing prices

The pri­ma­ry serv­er I have has 12 cores and 96 GB of RAM, a 240 GB SSD per­form­ing at 500 MB/s and 2 TB RAID 1 per­form­ing at 100 MB/s. It cost­ed ap­prox­i­mate­ly $2 600, giv­en that each part was bought sep­a­rate­ly. This means that when the serv­er will start to age, I'll sim­ply re­place the com­po­nents, and some, such as the chas­sis, will serve for decades.

Now let's search for a sim­i­lar ma­chine on Mi­crosoft Azure. At the mo­ment of writ­ing, their cal­cu­la­tor lists D-Se­ries, A-Se­ries and G-Se­ries ma­chines. The A-Se­ries look close enough to what I have, giv­en that I'm some­where be­tween A-10 and A-11.

Let's make things eas­i­er and con­sid­er only the A-10 one (and we'll also for­get about the SSD). At the mo­ment of writ­ing, the ma­chine costs $863.04 per month ($1.16/hour). Wait, whaaat?! That's a third of what I paid for my serv­er!

Agreed, I ma­li­cious­ly avoid­ed talk­ing about my elec­tric­i­ty bills (al­though it's dif­fi­cult to mea­sure, I imag­ine that the serv­er costs less than $10/month), my in­ter­net bills ($40/month for an asym­met­ric 90 Mbps/70 Mbps con­nec­tion), about the mon­ey I paid for the UPS units, the switch and the rack cab­i­net, and about the ad­di­tion­al costs Mi­crosoft has to pay, such as the cost of the data cen­ter it­self, the cool­ing, the se­cu­ri­ty, the main­te­nance, etc.

But still, one third of the cost of the serv­er?

I can also pur­chase sep­a­rate in­stances for all the vir­tu­al ma­chines I host. At the mo­ment of writ­ing, the least ex­pen­sive ma­chine on Mi­crosoft Azure costs $13.40/month. I cur­rent­ly host 40 ma­chines, and the serv­er may eas­i­ly host twice as much, which means $1 072/month. I don't freak­ing be­lieve it!

Ama­zon EC2 looks slight­ly cheap­er, but not that much. Their m4.4xlarge is at $1.008/hour, which is still a lot.

Ac­tu­al­ly, i'm not sure what to think. I al­ways thought that cloud com­put­ing is the so­lu­tion, and one would be smarter to pur­chase his own servers only in a few rare cas­es. Look­ing at the prices, it ap­pears that cloud com­put­ing is more for very spe­cif­ic cas­es where scal­a­bil­i­ty is a re­quire­ment, and one would be crazy to use it for any­thing else. That's very dif­fer­ent from what the ads tell us about the cloud!

I imag­ine that it may be in­ter­est­ing for some star­tups which ex­pect to grow very fast, but what about the medi­um or large size com­pa­nies? Are they re­al­ly ready to pay such high price only to get the ex­cel­lent re­li­a­bil­i­ty of Ama­zon's and Mi­crosoft's cloud so­lu­tions?

In all cas­es, I can hard­ly see my­self pur­chas­ing vir­tu­al ma­chines at Mi­crosoft Azure or get­ting one at Ama­zon AWS.

Of course, stor­age is a dif­fer­ent sub­ject. Ama­zon S3 has its ob­vi­ous val­ue, es­pe­cial­ly for any data which re­quires to be stored re­li­ably.