Comment by cal85
3 years ago
> In comparison, buying servers takes about 8 months to break even compared to using cloud servers, and 30 months to break even compared to renting.
Can anyone help me understand why the cloud/renting is still this expensive? I'm not familiar with this area, but it seems to me that big data centers must have some pretty big cost-saving advantages (maintenance? heat management?). And there are several major providers all competing in a thriving marketplace, so I would expect that to drive the cost down. How can it still be so much cheaper to run your own on-prem server?
Several points:
- The price for on-prem conveniently omits costs for power, cooling, networking, insurance and building space, it's only the purchase price.
- The price for the cloud server includes (your share of) the costs of replacing a broken power supply or hard drive, which is not included in the list price for on-prem. You will have to make sure enough of your devs know how to do that or else hire a few sysadmin types.
- As the article already mentions, the cloud has to provision for peak usage instead of average usage. If you buy an on-prem server you always have the same amount of computing power available and can't scale up quickly if you need 5x the capacity because of a big event. That kind of flexibility costs money.
Thank you, that explains it.
Not included in the break even calculation was the cost of colocation, or the cost of hiring someone to make sure the computer is in working order, or the less hassle upon hardware failures.
Also, as the author even mention in an article, a modern server basically obsoletes a 10 year old server. So you're going to have to replace your server at least every 10 years. So the break even in the case of renting makes sense when you consider that the server depreciates really quickly.
The huge capital required to get a data center with those cost savings serves as a nice moat to let people price things high.
Renting is not very expensive. 30 months is a large share of a computer's lifetime, and you are paying for space, electricity, and internet access too.
You're paying a premium for flexibility. If you don't need that then there are far cheaper options like some managed hosting from your local datacenter.