The Cost of the Cloud

Basecamp (formerly 37 Signals) is quitting the cloud. One of the founders gives some reasons, and he had some detail in a tweet on what they’ve spent in the cloud the last few years. Over USD$3mm on various services, though their costs in search seem very high. I don’t, and haven’t, run as busy a business as they do, so I don’t know if they’ve truly done a good job architecting things and setting up services. They say they have, though I’d expect everyone to say and think that.

However, I’ll assume they are correct and they can’t optimize things any more than they are currently. Their decision makes some sense, and I agree with it. I’ve been surprised at the growth of the cloud, both in size and how quickly people are moving to the cloud. I’ve also been saying for years that if you have a steady or known workload, the cloud is likely very expensive.

Maybe that’s worth it for your organization. Not dealing with physical resources, maybe having slightly less staff, maybe less CapEx vs. OpEx. Those are decisions for management and finance people. For most of us, the cloud both simplifies some tasks and makes others more complex. Provisioning, testing out Proof-of-concepts, and scaling are easy. Identity protocols, gaining (and keeping) knowledge of how various options work (networking, storage, etc.) , and keeping track of resources become more complex. Not to mention the world constantly shifting under your feet as cloud providers change how their platforms work.

There are costs in both hard dollars (or your currency of choice) and in the time your staff spends dealing with a new way of doing business. The calculation of whether this is a cost that makes sense is very dependent on your situation. I have customers that love the cloud and others that hate it. The value they get varies dramatically and some would never go back to data centers while others are ready to work long hours to leave the cloud. Overall the sentiment is the cloud is great, but like many decisions made by management there are particulars that baffle the technical staff.

The one thing I have learned about the cloud is that it takes a different sort of mentality from staff than on-premises resources. We have to learn to spin things up and down, scaling as needed. We need to better understand budgets and not look at costs as though they were personal expenses. We also need to be flexible with resources, understanding that machines that are idle are not sunk costs; they are ongoing costs.

The cloud is amazing, and I think it is very useful in lots of situations, but a blanket move to the cloud can be expensive. Make sure that everyone involved in moving to the cloud understands that.

Steve Jones

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About way0utwest

Editor, SQLServerCentral
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5 Responses to The Cost of the Cloud

  1. My issue with the cloud and I’ve held it from the earliest days, is that its been promoted as the end-all, be-all solution for every need and that’s sales an talk, aka lies. The cloud should be treated like everything else, as a tool ideal for “some” scenarios but not all. I liken it to how MS promoted .Net at the start, like as if .Net was going to be the savior of computer programming.

    The cloud as we know it today was not the industry’s first attempt to convince business and induvial users to move away from regular workstations & servers to effectively a dummy terminal that runs everything from somewhere else they just didn’t call it “The Cloud”. When that failed I can only assume they brought in some marketing pro’s who came up with teh name “the Cloud” which was a much better sounding pitch.

    The Cloud is also a lot like Offshoring/Outsourcings where too often those who make the decision as to whether or not to move to the cloud can only see the promises of reduced upfront operation costs w/o examining the potential negatives or unforeseen costs to handing control of your business over to a company that will never make your business as much of a priority as you would no matter what the sales people promise. I guarantee every contract for Cloud Services includes some kind of wording that protects the Cloud Provider %100. If you have an actual IT dept with your own on premise network/servers and you’re thinking about moving to teh cloud you have to understand that while that means you can reduce your onsite costs in terms of hardware and staff you also give up control over those taking care of your setup. If something goes wrong you are the mercy of teh Cloud Provider whereas when on prem if it doesn’t get dealt with in an acceptable time fame you can fire the applicable persons.

    My other big issue with teh Cloud is that it’s effectively a “Putting all your eggs in one basket” approach. While the Cloud Providers have serious backup and redundancy in place we know because we’ve already seen it happen more than once that it’s not failure proof and when the provider goes down everyone who uses them goes down whereas before the entire internet would need to go down before you are unable to reach outside your own network and even in that scenario you still can operate within your own network.

    I believe The Cloud has been approached the wrong way just like like iOT (Internet of things) has been. It’s been rushed, promised to be the end-all be-all to all your woes and without enough thought and checking beforehand. Granted it’s gotten A LOT BETTER as of recent but only after some pain that I believe could and should have been avoided by business taken a more cautionary approach to the cloud.

    I’ll get off my soapbox now. 🙂


  2. One more thing. I fear we’re seeing a very similar bad approach with what is being called AI which is not really AI. It’s being rushed out and I feel like it’s going take years of pain for many to realize it was rushed.


  3. way0utwest says:

    Every new tech, heck, every new product has this. Saying this is poor marketing or being promoted as the end-all be all isn’t helpful. This is how every invention/tech/language/etc. is thought of. Heck, it’s what most people think of their own design for anything.

    The cloud is very reliable. Not perfect, but I have never seen anything be perfect, especially in house. Plenty of companies have been down for hours days, with much less knowledge and experience than the big cloud providers. You hear about Azure/AWS/etc going down because it’s news. There are failures every day, but most of them are handled well and with redundancy that isn’t very practical for most orgs.

    This is a service contract, like getting cable or cell service. It mostly works, sometimes fails, they’ll refund you some money when it does, but it’s not really compensating you for the issues.

    The cloud can or cannot be better. Like most things, it comes down to the capabilities of your staff. I ought to write on that.

    For AI, it’s early days, so by design, lots of the AI experiements won’t pan out. However, that’s how you learn and how you get better. Not trying isn’t usually the best way to approach the long term.


    • Yes your on premises setup can go down too but if it does it takes only you down and not everyone else. When any major cloud provider goes down its national news. It’s also very costly to many business because every company that uses that provider is impacted as well as anyone who does not use that provider but does business with another company that does use that provider. If no one was on the cloud and CitiBank’s network went down it is only CitiBank that is impacted. Centralizing business’s systems has created an easier target for points of failure that have large scale impact which has already happened and more than once.

      The Cloud is reliable but pre-cloud on premise setups were also reliable when properly maintained but same applies to the Cloud. It’s not as if human error hasn’t caused a cloud provider to go down.

      Respectfully, I also don’t believe one has to have a solution or be helpful before they can be critical of something. I use and have been using Red-Gates SQL Prompt (which I love) for a very long time. If there’s something wrong with it I wouldn’t wait to report it until I have a way to be helpful with the problem.


  4. way0utwest says:

    Except that you’re thinking about everyone. And The cloud as a thing, or the Azure Cloud as a thing.

    What do I care if everyone is down. For comparative purposes, it only matters if I’m down. And I’m down when I’m down, which for many companies, has been more often than Azure/AWS is down. Even when AWS makes the news, it’s often not everyone. It’s just a DC or a region, which is a portion of customers. That’s one reason why many banks and large companies are in multiple clouds.


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