Is cloud computing really cheaper?

"Is cloud computing really cheaper?" "In all the questions raised at the recent event, the question is the hardest to answer." A few days ago, I hosted the Cloudcamp seminar at the New Jersey Institute of Technology-an informal meeting designed to communicate and popularize information about cloud computing. Since the opening of this series of non-traditional conferences more than four years ago, it has been around the world in more than 300 cities. During the period of scientific and technological change. The topic of discussion has been defined from cloud computing to what can be done to cloud computing?

I began to seek the answer to the question. It's amazing how many people I've talked to portray the cost of the cloud as "dark magic". The most common answer is "look at the situation". This answer does not satisfy me, I continue to explore. I started asking as many people as possible, "is cloud computing really cheaper?" ”

In my search for answers, an analogy is often mentioned repeatedly, and that is the "car analogy". Alan Merrihew, senior director of Government technology strategy at Microsoft, explained: Allen Merry

If you have guests visiting the town where you live, will you buy a car for them to spend two weeks in the city? And keep that car idle until they come back again? No, of course not! The logical thing is that you will rent a car for them to use while sightseeing. In fact, cloud services are similar to car rental services, except that it rents out information computing services (ICT). Let's use the car rental analogy to revisit five features of cloud services:

On-demand self-service (renting a car is easy, you can make a phone call or book online)

A wide range of access networks (car rental agencies around the world, you can get car rental services anywhere)

Resource Gathering (car rental companies have a large number of cars in any city within their business coverage to meet leasing requirements.) You don't have to worry about that. If an organization has no car to offer, they will often recommend other agencies to help you rent a car. ）

The ability to adjust quickly (when a car rental company knows that there is a big event somewhere and the car needs to be big, it will be there.) They will adjust their size to meet changing needs. ）

Billing Service (you only pay for the time you use the car.) Once the car is returned, your obligation is over. No need to pay for maintenance, insurance, fuel and tyre costs. ）

I went on to Chow Weiman Joe Weinman, a very prestigious thought leader in cloud computing, whose book Cloud Economics: The business value of cloud computing (cloudonomics:the Business value of Cloud Computing) to be published soon. He thinks most people use simplistic models to measure the economic value of the cloud. "The general view of the cloud is that large suppliers can achieve economies of scale and thus have less cost to do it in a DIY way," he said. However, he argues that this view is neither necessary nor sufficient in terms of the value created by cloud computing for the company. Although renting cars is much more expensive than buying a car in terms of a one-day cost, people are still renting cars. Similarly, Weiman explains that the real value of building a cloud-computing infrastructure to lower costs is not to reduce unit costs, but to pay at a time, without paying. "In fact, it's not that important when you're using cloud services, it's important that you don't pay for anything when you don't use it, which is the key to driving down the cost." ”

Jason Evans, co-founder and CEO of Stackpop Company in New York, Jeson Evans that cloud is not a good cost-saving model. His company is a business-to-business E-commerce trading platform that links service providers and network infrastructure buyers. Although "cloud technology is rapidly evolving in most areas (e.g., proprietary ' cloud ' servers, guaranteed international computing systems, cheaper pricing, and so on), for larger applications, the cloud economy of any cloud service provider is now meaningless," Evans said. For any enterprise that reaches a certain size (1.5 to $20,000 per month from a stable base traffic load), transferring these basic loads to its hosting host can significantly reduce costs. Even in places like New York, where electricity prices are as high as $500/kilowatt, the associated capital expenditure can be recovered within six to 4-12 months, and the cost of 3 years will be several times higher than investment. Most hosting clients that manage their servers (without worrying about the problem of multiple tenants or administrators) can also see significant improvements in computational performance and stability. (Evans contrasts Amazon's cloud service and hosting ToolStrip software to better explain his views.) ）

On the other hand, Weiman points out that cloud computing means more than simply reducing costs, or even improving "business agility." He believes that "cloud is really interesting to use is corporate strategy, and even help companies build a sense of existence." In a recent article in Forbes, Weiman outlined how to support four key strategies with the cloud: superior operations, customer affinity, product leadership and accelerated innovation. For example, cloud and mobile platforms can be used to optimize field support and logistics, leveraging cloud to scale data aggregation and depth analysis to support customer intimacy strategies, just as Amazon and Netflix are looking to understand our preferences more than we do; cloud services enhance product differentiation, such as Nike The cloud-enabled data collection and social networks differentiate it from the average sporting brand, and a cloud-based competition like Netflix prize, through its support for open innovation strategies, breaks through the vision limitations of in-house research and development teams.

The real value of cloud computing seems to go far beyond concrete counting, but it is at the heart of innovation. The potential value of innovation to an enterprise or institution cannot be quantified. What can not be done before is the main driving force to build the cloud. When viewed in terms of value-giving, the value proposition is quickly transformed by how much cost to create value.

I have not been fully persuaded, so I continue to cross-examine Weiman, "There is a view that it is not important." But if so, please explain Google's case. Google did not have a brand at the start of the venture, no capital, no priority to access resources and capital channels, but Google to embed algorithmic advantage in it as a cloud services, the creation of 200 billion of dollars in market capitalisation, from 40 billion U.S. dollars in revenue from the 25 billion dollar profit. ”

Unfortunately, innovation and opportunity are very difficult to quantify. On the other hand, the money spent is much easier to explain. Recent budding start-ups have focused on helping companies better control the costs associated with cloud computing. These companies are trying to answer the question of costs from this perspective-not just how much they spent in the past one months or years, but how much the cloud will cost in the future. Companies such as Cloudability, Uptimecloud, Cloudcruiser and Cloudy are leading fees for the unknown cloud economy. The field will soon become one of the biggest hits in the cloud market.

I contacted the cloudability company in Oregon State Portland to find out what they thought about it. The start-up has just raised 8.7 million of billions of dollars in its first round of financing, with its all-star investor portfolio including VC's Foundry group and business incubator startups, investment agency Trinity Ventures and advertising company Wieden + Kennedy. It creates a platform that allows cloud customers to create simple daily reports and budget reminders that they will not be surprised by overrun rents and soaring costs. Cloudability now claims to be managing $140 million trillion of cloud services for more than 3,000 companies in more than 80 countries.

Cloudability's founder and chief executive, Matt Ellis Mat Ellis, said those who think cloud computing is more expensive will eventually lose their jobs, in part because they will be left behind. He told me that the company either adapts to the trend or is suicidal. He admits his clients are paying high prices for new things, and there are some additional costs to becoming early adopters. But he said "opportunity has overshadowed these deficiencies." ”

Schalen Wagner (Sharon Wagner) is the founder and CEO of Cloudyn, an Israeli start-up company. The company is committed to cost management, analyzing the use and cost of customer cloud services and recommending how to optimize them. For a smaller internet company, "cloud computing is not only cheaper, it's actually the only option," he says. "As the company grows, there is a cost explosion and the overall use becomes extremely unpredictable." He says there are basically two options, using your own data center, or using someone else's. Cloudyn tried to dynamically allocate cloud resources through what he called the "Best Cloud Configuration".

I asked him what kind of client was using the Cloudyn service, and Wagner told me that his customers now spend an average of more than 150,000 dollars a year on cloud services, with the largest customers spending more than 8 million dollars a year. Cloudyn, who completed seed financing last fall, received $1.5 million trillion and looks forward to announcing a new round of large-scale financing in the near future.

So is cloud computing really cheaper? The answer boils down to how closely you manage, track, and tune your infrastructure. If you're just blindly throwing your app to the cloud without any trace or responsibility, the answer is probably not cheap. If you take the time to analyze your IT goals and compare them, cloud computing will certainly be cheaper.

In short, Weiman said, "Clouds can help reduce costs, but more importantly, Cloud energy is a core element of strategy and can sometimes be a cornerstone of competitive advantage and market dominance." ”

(Responsible editor: The good of the Legacy)