Wednesday, May 19, 2010

At $24k a year for server hosting, the cloud can't fail

The tech industry's current love affair is with cloud computing - that hard to describe set of technology and infrastructure that is the obsession of companies large and small. Much like the industry's previous 'squeeze', SOA, the joy of the cloud is that you can make almost any technology fit under the name. Put plainly though, I see the cloud as a flexible set of server and storage resources that can host applications, somewhere out there, though you don't have to know where. With this comes the ability to reduce costs of running enterprise and SaaS applications.

There are many discussions about whether the IT teams of real companies will allow the cloud to become the platform for running their enterprise applications. There are risks that seem to come from the cloud that are fairly easy to identify:

  • This is a new style of technology, so you have to trust your vendor
  • Security of data is harder to understand than with dedicated servers
  • Reliability and high levels of service shouldn't be an issue, but you have to wonder if capacity is 'elastic' and can expand, what chance is there that it can suddenly shrink without warning too
  • Server resources are completely outside the control of IT, so you can't even call up and say, "my Window's server is going slow again. Could you reboot it?"

I look at it this way. If a dedicated server hosting company (in a location that Rackspace does not serve locally) wants to charge me $24,000 a year to install and babysit a single, basic server, it doesn't take long for my company to work out how to deal with the risks I stated (both technically and emotionally), and come out better off.

Put easily, the cloud is the perfect example of 'economies of scale'. But is there any reason that a hosting company has to view hosting, sourcing hardware and and managing a running data center as a single server proposition? Rackspace and others (despite their push to the cloud) are successful because they can view dedicated server hosting with the same mindset they use for their cloud offerings: the server is already here in the server room, installed and ready to go, alongside the other hundreds of boxes we have already running. They just don't plumb it in to the rest of the cloud infrastructure. Hosting a dedicated server cost effectively is not the complex, hard to get your head around elasticity of the cloud, but it is a mindset that doesn't treat every server as completely different from the last one either.

Dear Rackspace - please open a data center in Canada. My sides are still hurting from laughing at the $24k a year quote I received from one of your across the border competitors yesterday!

A post from the Improving It blog

Let us help you improve your business today. Visit

1 comment:

Brett Cave said...

Ouch! Can you imagine how many startups fail without taking this into consideration.

Then again, if you make it and grow to a certain point, there's a definite breakpoint where dedicated infrastructure becomes more cost effective than cloud. We found this to be at about 1 million active users on a 5 year ROI.