Trevor Pott's guide to pricing up the cloud

Does scale equal less cost?

As a sysadmin for a small-ish business, I lack the resources to keep an in-house expert who is intimately familiar with the intricacies of each technology on my network. There are so many technologies from so many vendors: it is simply overwhelming for two sysadmins to try to know everything between them.

So why not outsource everything, engage an appropriate consulting firm and put all IT in the hosted cloud? After all, the marketing message of recent years is clear: the sheer scale of clouds ensures lower costs.

In reality it is more complicated to measure the suitability of hosted clouds.

For some, the cost savings are clear, the maths as simple as those of an internal cloud. For most, hosted versus private clouds are so close that the make or break points lie in the intangibles; items for which no ledger entry exists.

So, I invite you to consider two important questions before asking if clouds – hosted or private – cost less. Just exactly how much are the time and focus of in-house IT staff worth? How much would be freed up by embracing cloud services? When you can answer these, you can answer how much cloud computing is worth to you.

In-house knowledge

My case for the value of in-house IT staff is that they are indoctrinated into the corporate culture. In-house sysadmins know the ins and outs of a particular workplace’s corporate politics and they understand what it takes to get things done. This is vital for support and also informs which approaches to new services are the proper fits.

In-house staff have incentive to address the issues that matter to the people who actually work there. It is their job to understand what is important to an individual, a department and to the company as a whole. Being in tune with the company is priceless; it can take longer to explain to a consultant why X must be done in Y fashion than to simply do it yourself.

But in-house staff are not the best fit for everything. When you have more services than can reasonably be expertly maintained by your current level of staff you are faced with an age-old question: hire more people or explore outsourcing?

Smaller companies in particular lack the resources to retain an individual on payroll covering every aspect of every service their business requires. From Banking and legal through real estate and cleaning, running a lean business requires SMEs to outsource any services not related to core competencies.

For many SMEs this list of services includes IT.

Service mentality

In today’s terminology, we can group many outsourced IT services under the umbrella term of Cloud Computing.

Cloud computing can be defined, broadly speaking, as tech services and applications delivered - mostly - over the internet. Typically, in a public cloud, customers are charged on a utility basis - everything is wrapped into a monthly per user fee.

Today’s most commonly accepted interpretation is that cloud computing refers to pools of computing resources, to “serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand”. This has the virtue of simplicity for customers - there is no up-front capital expenditure, no heartache over software management and licenses, and no server rooms or data centres to maintain. The potential for cost savings here is obvious

Very briefly, we can characterise cloud providers under three “as-a-service” categories: Software as a Service (SaaS), Platform as a Service (PaaS), Infrastructure as a Service (IaaS) and so forth.

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