Alarmist? Perhaps. Accurate? In one sense, but not in the most important sense. The Cloud is coming. Are you ready?
“Figures Don’t Lie” – Foghorn Leghorn
Consider the following true story: Company A and Company B are in the same business. Company A was formed in the 1990’s and has built a successful business and loyal customer base. Company B is a startup formed last year. It’s 2011. Customers everywhere are interested in saving money wherever they can. At the same time, no one is interested in losing value. One solution is to find companies that provide the same services for less money.
Company A maintains a computing center to manage email and financial data. They require three servers and networking equipment to accomplish this. There are licensing costs and backups must be performed, maintained, and tested. The servers require occasional maintenance and constant monitoring, so Company A has one full-time staff member to watch over things. In the end, Company A incurs an annual cost of $200,000USD for email and financial services.
Company B utilizes cloud services for the same functionality. They pay $25USD per month for email and $50USD per month for financial services maintained in the cloud. Licensing is included. Maintenance is included. Monitoring is included. Backups are included. The staff members work for the cloud services providers and Company B pays a fraction of their salaries each month. For equivalent email and financial business services, Company B pays $900USD per year. That saves Company B $199,100USD per year. Consider fifty 40-hour weeks comprise a work-year, essentially adding up to 2,000 hours per work-year. Company B can earn just as much as Company A while charging $99.55USD less per hour.
That is compelling.
The Cloud is a Game-Changer
When companies begin doing the math, pieces on the competitive game board move. New strategies evolve; some by initiative, others in defense. The new economics trickle through the marketplace and the game changes.
“What Do I Do Now?”
Many peers are asking this same question. Some out of fear, others out of concern, many are motivated by interest. In response, I borrow the title of the actual Hitchhiker’s Guide to the Galaxy, “Don’t Panic”. The game is changing, so learn the new game. There are two important truths to keep in mind about learning cloud-tech now:
- If you start right now, you are still early. This will not always be true but in September 2011, it is.
- If you start right now, it will be a struggle to get started. It’s easier now than it was in 2009, but it’s still not what one would call “easy”. This is a good thing. If it was easy, anyone could do it and everyone would be doing it. You will be ahead of the curve if you learn it now.
The cloud has a silver lining. But you have to be willing to climb the slope of the learning curve – even just a little – stretch, and learn something new. You can do it. And…
I Am Here To Help™
Over the next bit (that’s an intentionally vague Farmville term to describe an indefinite time period starting now), I will be posting a series of articles about using cloud-tech.
Conclusion
Change is inevitable. Change in technology, even more so. If I can learn this, you can. Let’s roll.
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To a certain degree many of us have been here already in the "outsourced" data centre. With a managed service centre there is also no need to have as many staff – I don’t have the ability to do the math for a company with several hundred servers so can’t draw a conclusion on cost.
My current client has an outsourced data centre; we are in over 80 countries worldwide so in a manner of senses we already work in the cloud as our users access our datacentre by internet.
For small companies the cloud may well be beneficial but do I see the demise of the company data centre? Not really as part of having your own servers is control and if you’re a large financial institution you’d probably want to keep your data very secure and close to hand. If you’re a financial trader would you want to rely on a cloud service? I think not.
The technology is evolving for sure, and you’re absolutely right that you/we/I need to keep it within sight. However if I remember correctly didn’t mainframe data centres sort of work much the same way as the "cloud" ? Good post!
Agree with the Grumpy Old DBA – I see this as a ghost from the past, not the newest thing on the planet.
Also, I wouldn’t trust my data and backups (just yet) to any kind of cloud. It’s too cloudy, frankly – just remember Amazon, a couple of months ago.
Andy, I love you, man, but I think you are neglecting key components in your analysis. The cloud is compelling, but one should still take a look at and remediate the potential risks if that’s the direction you’re going to go. It’s not all rainbows and unicorns and bacon and SQL karaoke. A few things that hit me, off the top of my head:
– Backups: if you’re doing them in house you can verify your backup/restore strategy. Depending on the cloud? Remember Sidekick. Remember Brent’s "discussion" with Carbonite.
– Security: You are depending on the folks at the cloud to get it right. A SAS70 attestation and other docs may please your legal folks and your auditors, but it won’t please your customers in a breach. Can you say "Sony PSN?" I thought so.
– Availability: If you own the data center and you control the equipment, you have options if things go down. In the cloud, you are just another number. And you may not get a straight answer on why you were down. Amazon and Google both have suffered outages recently.
– Sensitive Data/Intellectual Property: The data exists on someone else’s systems. You are trusting that they will be on the up and up. But this is business and business is about competition. Are you really so sure they won’t do something with your data? Outsourced companies have had a mixed result on this one. Most have been trustworthy. But there are enough bad apples out there that India has a new data privacy law. That should cause everyone to pause right there.
I’ve started learning Azure 3 times now, and I keep getting distracted by actual "do it now" work. I keep saying I’m going to pick the books back up, its just finding the time.
for all the hype about the cloud every time i read figures, only a small minority of companies actually use it. it’s mostly a game changer for small companies, once you grow a lot of the costs are the same or higher than running your own infrastructure.
once a year or so i price out an amazon instance and compare to the cost of the top end server we just bought. Amazon is always more expensive.