Public Cloud, Fast but not Cheap
When I mean fast I don’t mean network, storage or processor speeds, I am talking about a comparison of internal infrastructure time-to-availability. Analysis clearly identifies that the Cloud is not cheaper for large scale, day-to-day operational life cycle applications. In fact is is generally agreed that when compared to hardware procurement, cloud costs would allow the user to buy the same hardware four times over a five-year period. Furthermore, for scaled production applications, it is questionable whether personnel costs are reduced significantly as the applications and “virtual infrastructure” require a development and operational team just as the physical infrastructure.
A typical IT deployment process has a significant duration where little or no application development is undertaken while approval, procurement, staffing and installation are completed. These delays can be avoided when using a Public Cloud. Its low initial costs allow small scale work to begin with funding approval within the scope of line managers. This allows project development work to be begin 6-9 months before the internal IT infrastructure. However it would be incorrect to assume that the only difference is that Cloud providers have hardware “ready to go.”
Lets contrast Cloud builders and Enterprise IT by breaking it down to three ingredients.
Both Enterprise IT and Cloud builders have access to capital. They both have access to skilled resources. In fact my current project for a large scale European company has given me the opportunity to meet some very talented people. The difference is that “Cloud Builder” processes and management practices are different to those used in Enterprise IT. Cloud Providers have more in common with the processes used by Product Vendors, while many Enterprise IT organizations employ consultancy orientated management processes.
These Enterprise IT management practice, or put more simply “consumers or IT practices” are further supported by the traditional vendors of goods and services. Simply adding up the amount of time taken to procure a new technology component compared to simply activating a component in a Cloud Provider account is more than enough evidence.
Cloud Providers can offer great value, but like so many other business components, it is an arbitrage opportunity. If it is cheaper to run a large scale, long lived application on a cloud provider, ask yourself “what am I doing wrong?”