There is no one answer that fits all. Where cloud will always be cheaper is data storage.
If you were to host everything on-prem, that would be a lot of capex. It would cost to maintain that as well. For on-prem, you have to think more about electricity, redundancy, backups, security, and so on. Anything you would need to do to build out a data center. Once you have it set up though, yes it would be cheaper.
For tech companies, this is already a non starter as they want to scale and scale fast. They also can’t just spend all their investors money, so they convert capex into opex instead.
Also, historically, IT is slow. Very slow. This is why there is a world of DevOps because developers became increasingly frustrated with how slow it is to provision infrastructure for them. To fix this, you could probably hire more people, but again, that’s an extra expensive that you can just now offset to cloud.
With cloud you can set up something in multiple data centers within minutes. If on-prem, you would need to have multiple physical locations of your own.
Another option is to rent out space in a data center, then you just buy your own hardware and do not have to worry about 80% of what would go into a data center. You would still need to set up these systems in a way that can scale for future use, which means more capex up front.
At the end of the day, there is no one size fits all. As you mentioned, most businesses could benefit in the long run by hosting their own stuff. I will say though, managing things like your own email server has become a nightmare. This is just a lot easier to let someone else manage. Then again, you have the concern of data storage, this is just easier and cheaper to host in cloud. Something like Google workspace or m365.
To put it another way, go to your boss and tell him you need to pay $2,000,000 up front for IT hardware. Now tell him you’ll need to pay $250,000 a year for the same services in cloud. What do you think they will go with?
I do hate that it’s come to this though, because I feel like people are losing knowledge. Only the people that build data centers these days will have that IT knowledge and you have people that can no longer tinker like we used to.
Yes, thank you, I think this is exactly what I’ve been feeling but unable to articulate properly.
I do feel there’s a great loss of knowledge in IT, but I’m also aware that I’m motivated by my own opinions and fear of job stability here. There are absolutely times when the cloud makes sense, and those arguments about capex v. opex nail it. I’d love to blame it entirely on greedy execs, but that upfront cost is hard to swallow for a new business, whether you’re planning on super/hyper scaling or not. Cohosting in a datacenter is a great option, but even then, most people simply won’t be willing to invest the time, as you put it.
I’ve had the luck of working for stable institutions like banks and biotech in the past where they built out their infrastructure for security and reliability properly and it was wonderful. I’ve also had the misfortune of working for hyperscaling startups with zero trust architecture built in Azure. It was a nightmare and I hated every day of it.
Like most things, the path forward is going to require a delicate balance, but there’s absolutely no fucking trusting Microsoft. When Europe says, “Hey, we’re getting nervous about your influence here” the response isn’t:
“In a time of geopolitical volatility, we are committed to providing digital stability. That is why today Microsoft is announcing five digital commitments to Europe. These start with an expansion of our cloud and AI infrastructure in Europe, aimed at enabling every country to fully use these technologies to strengthen their economic competitiveness. And they include a promise to uphold Europe’s digital resilience regardless of geopolitical and trade volatility.”
I mean, of course that’s what they’d say, but still. Fuck 'em.
There is no one answer that fits all. Where cloud will always be cheaper is data storage.
If you were to host everything on-prem, that would be a lot of capex. It would cost to maintain that as well. For on-prem, you have to think more about electricity, redundancy, backups, security, and so on. Anything you would need to do to build out a data center. Once you have it set up though, yes it would be cheaper.
For tech companies, this is already a non starter as they want to scale and scale fast. They also can’t just spend all their investors money, so they convert capex into opex instead.
Also, historically, IT is slow. Very slow. This is why there is a world of DevOps because developers became increasingly frustrated with how slow it is to provision infrastructure for them. To fix this, you could probably hire more people, but again, that’s an extra expensive that you can just now offset to cloud.
With cloud you can set up something in multiple data centers within minutes. If on-prem, you would need to have multiple physical locations of your own.
Another option is to rent out space in a data center, then you just buy your own hardware and do not have to worry about 80% of what would go into a data center. You would still need to set up these systems in a way that can scale for future use, which means more capex up front.
At the end of the day, there is no one size fits all. As you mentioned, most businesses could benefit in the long run by hosting their own stuff. I will say though, managing things like your own email server has become a nightmare. This is just a lot easier to let someone else manage. Then again, you have the concern of data storage, this is just easier and cheaper to host in cloud. Something like Google workspace or m365.
To put it another way, go to your boss and tell him you need to pay $2,000,000 up front for IT hardware. Now tell him you’ll need to pay $250,000 a year for the same services in cloud. What do you think they will go with?
I do hate that it’s come to this though, because I feel like people are losing knowledge. Only the people that build data centers these days will have that IT knowledge and you have people that can no longer tinker like we used to.
Yes, thank you, I think this is exactly what I’ve been feeling but unable to articulate properly.
I do feel there’s a great loss of knowledge in IT, but I’m also aware that I’m motivated by my own opinions and fear of job stability here. There are absolutely times when the cloud makes sense, and those arguments about capex v. opex nail it. I’d love to blame it entirely on greedy execs, but that upfront cost is hard to swallow for a new business, whether you’re planning on super/hyper scaling or not. Cohosting in a datacenter is a great option, but even then, most people simply won’t be willing to invest the time, as you put it.
I’ve had the luck of working for stable institutions like banks and biotech in the past where they built out their infrastructure for security and reliability properly and it was wonderful. I’ve also had the misfortune of working for hyperscaling startups with zero trust architecture built in Azure. It was a nightmare and I hated every day of it.
Like most things, the path forward is going to require a delicate balance, but there’s absolutely no fucking trusting Microsoft. When Europe says, “Hey, we’re getting nervous about your influence here” the response isn’t:
I mean, of course that’s what they’d say, but still. Fuck 'em.