A recent post on Wired.com titled, "Why Some Startups Say the Cloud Is a Waste of Money" caught my attention. Eric Frenkiel of MemSQL was featured in the article and expressed the following, "I’m not a big believer in the public cloud. It’s just not effective in the long run." Interesting that a tech firm would have this view. Simply put, it got too expensive for his firm to continue to use Amazon Web Services. I have experience with AWS and can tell you they offer great services and exceptional support, but they are expensive and that bill keeps coming every month.
I'm a big believer in the Cloud, especially since I'm an IT Manager for a small company. I'm responsible for a production environment that spans three separate corporate entities spread across four different locations. In that kind of environment, the Cloud has proven itself to be a useful platform, especially when it comes to Business Continuity & Disaster Recovery. But the one fly in the ointment is cost. I know the argument made is that costs go from a Capital expense to an Operational (aka day-to-day) expense but there does come a tipping point. I utilize Google for email for the smallest entity and Rackspace hosted Exchange service for another entity that has grown exponentially over the past two years. Every time I get that monthly bill from Rackspace management asks why its more than it was the month before - I tell them its because they hired two more people so we had to add two more mailboxes. What management wants is cost certainty - they get that with a capital expenditure because its a one time cost. Its the purchase versus lease argument for a car. How long do you plan on owning the car? How many miles each year will you drive? What kind of driving will you do. These same kinds of questions should be asked when considering the Cloud.
The largest of the corporate entities that I run the technology for has its own dedicated email system that sit in a rack at a collocation facility. No matter how many employees are hired, the cost each month is still the same. This is the right solution for this situation. Support & warranty costs must be included in any calculation. Purchase versus lease should be the first question you ask yourself about the Cloud.