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Our company recently investigate the cost/benefit of AWS. We went with our own colocation facility. Some salient points: 1. While AWS is more expensive compared to rolling your own physical servers, the talent required to DIY is expensive. This makes AWS very attractive to startups without someone in-house who can perform the operations-related stuff. 2. The only way to make your environment cost-competitive with AWS reserved instance costs over a 3yr basis is to virtualize your own datacenter. You can virtualize using Amazon and have them be the beneficiary of your spare CPU/RAM/Disk cycles or you can virtualize yourself and save over the long haul. 3. For AWS costs to be even marginally competitive over a 3-year basis you must sign up for reserved instances to lower costs. This means paying a large sum of money up-front. If you have 50-100 servers in AWS, good luck going to the bank and telling them you want a loan for something that is a "soft cost". The bank wants evidence of hard assets that can be recoverable in the event you can't pay that money back. This makes taking out a loan for reserved instances difficult but makes it much easier to get a loan for your own hardware. 4. We spend 35K a month currently in AWS. We calculated that even taking into account the fastest possible hardware, an insane amount of RAM and SSD san, hosted in one of the best datacenters in the country, paying for bandwidth, rackspace and salaries, hosting on our own had an ROI of ~14 months if we doubled in size every 6-8 months. AWS becomes very expensive as you host more machines there. 5. Good luck getting the kind of IOPs necessary for big data from AWS. Their SSD tier does not provide the kind of IO you need for scale and it is very expensive. 6. AWS is perfect if you need to scale up and down all the time or if you are a startup and have more money than operational technical talent. 7. We will continue to leverage AWS for some of their ancillary services. AWS is a good tool and there is always room in the toolbox for exotic instruments that can be used at the right time. 8. The more services AWS hosts, the more complex it becomes. That complexity has a serious operational cost. Have you taken a look at the descriptions for their downtime events? It sounds like a giant Rube Goldberg contraption.
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Oct 17, 2012