Saturday, February 11, 2012

Amazon or self-hosted?

From Charlie Oppenheimer, Matrix Partners article published by Gigaom. He assumes this traffic distribution



and produces this cost comparison table:



However it is not recommended to conclude that Self-Hosting is cheaper than Amazon. The author writes:
Notice in the above example, that a bit more than half of the total cost for each alternative is for bandwidth/data transfer charges ($35,144 for self-hosted at $8/Mbps and $36,900 for AWS).
Aha! The cost of the network is more than half the total cost of operating a cloud, and this proves the point of the  M2Mi article I commented below:  Why Include Network Virtualization into the Cloud .

Here the final Mr. Oppenheimer final recommendation:


It is very simple:  if your usage is flat, go Hosting. If your usage is spiky, go Amazon. But in between these two extremes, where actually every institutional user sits, we have a wide space where the cost of the networking (aka bandwidth cost) can tilt the balance either way. The cost of the network is the decisive factor, everything else is just small change.



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