Cloud computing for startups: no infrastructure people necessary
The simplest way of cloud computing: renting virtual machines to avoid hiring infrastructure people. It is very tempting for "developers startups" that simply want to develop and let a software service. Buying hardware and getting support of a third party integrator is a costly and time consuming endeavour: you do not know how succesful your application will be so you might over or undersize the hardware.  If you have no infrastructure knowledge in house and you have to call in the help of a third party integrators for every little problem or upgrade, consulting costs will explode quickly. After a few years,  your integrator is the only one with intimate knowledge of your server, networking and OS configuration. So even if the integrator is too expensive or gives you a lousy service, you can not switch quickly to another one.

Developers just want an OS to run their software on, and that is what the public clouds deliver. In Amazon EC2 you simply chose an instance. An instance is a combination of virtual hardware and an OS template. So in a few minutes you have a fully installed windows or linux VM in front of you and you can start uploading your software. Getting your application available on the internet could not be simpler. The number of instances on EC2 grows with an incredible pace, so they must be doing something right. According to Rightscale, 10.000 instances were launched per day at the end of 2007. At the end of 2009, this number was multiplied by 5!

In theory, using a public cloud should be very cheap. Despite the fact that the public cloud letter has to make a healthy profit, the cloud vendor can leverage the economies of scale. Examples are bulk buying servers and being able to invest in expensive technologies (cooling, high efficient UPS) that only make sense in large deployments. 

The reality is however that renting instances at Amazon EC2 is far from cheap. A quick calculation showed us that for example reserving 10 (5 large  + 5 small) Amazon EC2 Windows based instances cost about $19000 per year (Tip: Linux instances cost a lot less!). The one time fee ($8750) alone costs more than a fast dual socket server and the yearly electricity bill. As you can easily run 10 VMs on one server, it is clear that adopting an Amazon based infrastructure is far from a nobrainer if you have the expertise in house.

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The cost savings must come from the reducing the number of  infrastructure professionals or third party consultants that you hire. 

Public Vs Private Cloud


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  • chusteczka - Wednesday, October 20, 2010 - link

    This author needs to submit his work to a proofreading editor before it gets published. Reply
  • akocsis - Wednesday, October 20, 2010 - link

    There are absolutely no words about Microsoft's offering - Azure - in the article. Why do you think they are not in the game? Azure is a totally different approach, as you buy computing "blocks" (which are VMs in the background), not the VM's itself. You don't want to maintain VMs, you want computing capacity without the need of OS maintenance... Reply
  • Exelius - Wednesday, October 20, 2010 - link

    Azure is not flexible enough for general purpose loads. Great if you're developing a .NET web app; not so much if you're trying to run an ActiveDirectory backup DC. It's nice to be able to ship a .vmdk across the internet to clone a server. Reply
  • JohanAnandtech - Friday, October 22, 2010 - link

    Remember, we told you in the first lines that we would focus on Infrastructure as a Service. Azure is PaaS and is only natural that it does appear in an article about IaaS. Reply
  • billt9 - Thursday, October 21, 2010 - link

    speaking solely from a personal computing viewpoint - unnecessary; expensive; insecure. The whole PC revolution was AWAY from central computers with dumb terminals. Reply
  • landerf - Wednesday, October 27, 2010 - link

    A note on the negativity towards cloud computing. A lot of it ignores the situational benefits in favor of fear, fear of losing freedoms and being vulnerable to centralized security targets. I can understand that, as it may be a valid concern. Companies using clouds will inevitably force the tech on the general consumer in a more and more invasive way in the decades to come. Cloud computing certainly has it's uses, but I'd never want it to take over. Even in a future where we have absurd bandwidth and nil latencies the idea of centralization is always a bad one. With "clouds", power plants, or the forever proposed wireless electricity grid, you're always setting yourself up for failure. Decentralization and redundancy are by far the best solutions. Every neighborhood in the future should have it's own power plant, every person should have all of their personal data embedded in their body, only sharing what they want when they want. On mass identity theft would be obscure, fear over catastrophic accidents or attacks would be averted. At the end of the day, decentralization is always better, including with the backbones used to share data. Reply

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