On-Prem is cheaper than cloud…

I came across this tweet that got a few people talking:

For a long time the rhetoric I heard at my previous employer was “The cloud is just someone else’s computer”… which is true of course but intrinsic to that comment is that if you have computers of your own why would you need to use someone elses.

That changed at some stage, as fashion does, and where once it was clearly far more sensible to continue to use our own, ‘on-prem’ DCs these suddenly became hugely expensive and the TCO of cloud looked a lot better.

So is on-prem cheaper than cloud? Well… yes and no… like so many things, it depends.

Most often you can spin the figures to suit the case you want to make. For example the cloud spend is all coming from the IT budget whereas the responsibility for something like aircon maintenance for the DC building might sit with the estates department. Costs can be moved around, included or excluded depending on the outcome you want – or maybe how honest you are…

Personally I think the true TCO of on-prem DC stuff ought to accurately reflect how much it costs the organisation rather than how much of it sits in one budget, but that’s just me and my simplistic view of how accounting ought to work.

Also, what’s the space worth and has its cost been written off? A dedicated, fully owned DC building as part of a university campus has a very different value, and therefore potential cost, to DC space within a building in a city. Basically what else could that space resource be used for and is it potentially worth much more filled with people rather than computers.

The size of an organisation makes a huge difference. One developer with a good idea can use AWS or Azure and throw together a level of infrastructure that would need at least 10s of thousands to achieve with tin.

However just as the organisations with ‘legacy’ on-prem DCs are looking at their maintenance & replacement budgets with a heavy heart, those startups that grew as cloud native might well be looking at their monthly cloud fees and sighing just as heavily.

I’m personally a big fan of the hybrid approach. Some workloads work brilliantly in the cloud, others less so…

What that tweet pushes back against is the idea cloud is cheaper because it just is. That patently isn’t true and many have been burned by just how high their CSP bills are.

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