Posted by: CarlBrooks
cloud calculator, cloud costs, cloud ROI, spreadsheets look funny in Google Docs
Googler Vijay Gill posted a quick and dirty cloud calculator a few weeks ago that has caused some head scratching. The calculator seems to show an eye popping 168% premium on using AWS versus co-locating your own servers–$118,248/year for AWS XL instances and $70,079.88 for operating a co-lo with equivalent horsepower.
Can that really be the case? AWS isn’t cheap web hosting, it’s mid-tier VPS hosting, price-wise, if you’re talking about using it consistently year over year, and those are definitely cheaper than co-lo. Gill says $743,000 to buy and install your servers, so he’s got the investment figures in there.
Editor Matt Stansberry asked an expert on data center practices and markets that questions and was told:
“There is a point at where this is a very good exercise, but the way it was undertaken was grossly inaccurate,”
That’s Tier1 analyst Antonio Piraino, who points out that not only did Gill not spell out neccessary assumptions, he took Amazon’s retail price as the base cost, and Amazon will cut that in half if a user makes a year or multi-year commitment.
But is it fair to make the comparison in the first place?
Some people will choose Amazon for large-scale, long term commitments, but they will be in the diminous minority. There are far better options for almost anyone in hosting right now. The hosting market has been mature for the better part of a decade, and cloud has many years to go on that front.
AWS isn’t hosting or co-lo, obviously; it’s cloud. First, lots of people pick off the bits they want, like using S3 for storage. That is surely less expensive that co-locating your own personal SAN for data archive or second tier storage (first tier if you’re a web app). That’s the absolutely astounding innovation that AWS has shown the world; they sell any part of the compute environment by the hour, independent of all the other parts.
Second the whole point of AWS is that you can get the entire equivalent of that $743,000 co-lo hardware, running full bore, no cable crimpers or screwdrivers needed, in a few hours (if you’re tardy) without having to buy a thing. Building out a co-lo takes months and months.
So it’s a little off base and what’s the point? To prove that Amazon can be expensive? Not a shock. Renting an apartment can seem like a waste of money if you own a home, not so much if you need a place to live.