There’s an interesting post by Advanced Systems Group that provides the top-level costs they were able to derive from an internal study they did to compare public and private cloud implementations. It’s the start of a good discussion (questions/comments I posted are still in moderation).
Their post compares three different cloud options from a cost perspective: 1) Public Cloud from Amazon EC2; 2) Purchased Private Cloud infrastructure; and 3) Leased private cloud infrastructure.
All three systems were based around the equivalent of (using AWS parlance) 10 Extra Large CPU instances, 60 Large CPU instances, and 30 Small CPU instances.
The cost calculations were run by ASG over 3 years assuming an increase of 15% in compute demand, and not accounting for depreciation.
When ASG noted in an answer to a comment that all instances are assumed to be running 24/7 my curiosity was piqued to drill in a little bit. The problem is, solely comparing private and public based upon 100% utilization removes one of the most compelling reason for the cloud - a pay-as-you-use model. It skews the conclusion from the start. (How many data centers run at 100% utilization anyway?)
Also, from a rough calculation, we can see that their Amazon numbers appeared to be based upon the cost of On-Demand Instances. 24/7 utilization over a three year period is not a cost effective use model for the On-Demand pricing model.
Performing a straight hardware costs calculation, (I’m assuming that ASG were adding in some additional costs for storage and data transfers to get to their top line numbers, as I couldn’t get there from a simple calculation. Their 3Yr cumulative cost for the Public Cloud scenario was slightly over $1M, where as mine below came in slightly under), I got the following top line numbers for an On-Demand instance scenario (the least economical). For completeness, I also added in the two more sensible scenarios of either a rolling 1 Year Reserved Instance model or a one-time 3 Year Instance model.
And so, taking these basic calculations in isolation of all other considerations, we can see that from a purely hardware resource expenditure perspective, a Public Cloud implementation is roughly the same or even less than a private cloud implementation.
However, this is still only part of the story. As mentioned, a key draw to public cloud computing is the elasticity of the model - Pay-as-you-Use. And so, considering a selection of rough percentage utilizations, we get the following breakdown of the different hardware costs of a public cloud implementation.
The comparison relative to utilization becomes even more stark when charted.
Not only is AWS more economical over utilization rates over extended periods, but it provides flexibility. For example, if the software used on the servers is upgraded (as is likely) and hardware requirements increase (equally likely, given history), moving an image (AMI) from a Small to a Large instance is straight forward (for an “IT guy”). No hardware needs to be thrown out or shipped in.
Additionally, there is some flexibility around migrating across business models. Of course, it is easier to upgrade than downgrade
Posted under cloud
This post was written by James Colgan on March 21, 2011