Friday, March 30, 2012

The Step Function of Cost

Building a “Private Cloud” within your data center has a lot of potential return on investment (ROI).  David Linthicom’s article, and others, are saying “you need to architect”.  
The focus needs to be on the architecture and the right-fitting enabling technology, including both private and public cloud technology, and not gratuitous opinions. There should be no limits on the technology solution patterns you can apply. If that means private, public, or a mix of both, that's fine as long as you do your requirements homework and can validate that you have chosen the right solution.

I agree, just stop architecting with brochure-ware and really think through your solution.  Think about what you need today, where you are going and how you integrate everything else.  Excluding software as a service (SaaS), when you compare private and public clouds there are some real advantages for a private cloud.  One of the biggest advantages I see public cloud solutions have, is the flexibility to scale up and down and time it takes to do that.

The thing I keep coming back to when I talk to people about public vs. private clouds is what I call “large step functions in cost”. One of the big step functions is cost to build a data center or enlarge it.  That large investments in infrastructure kills your ROI until you fully utilize that capital investment.  If you are building (or enlarging) a data center for example, most companies don’t build just what they need today, they leave some room for growth, and that’s “flexibility”.  That flexibility is costly because it just sits there on the books not really giving you any ROI until you start using it.  Really the ROI from that flexibility is only realized as future cost avoidance of the next step function in cost.  It’s like buying a restaurant and initially only serving breakfast.  Sure you’ll eventually staff up and start getting better use of that capital investment when you start serving lunch and dinner but until you do, your ROI may be negative.  Compare this to the cloud where having the capacity to grow costs you nothing.  Is “public cloud” always the best solution?  No, but you have options, architect, think, and compare.

- Chris Claborne

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