Cloud Vs Dedicated Hosting – Part 1: Cost
The following trilogy of articles investigates the benefits and drawbacks of cloud hosting in comparison to the more traditional ‘all singing, all dancing’ hosting solutions of dedicated servers. It aims to discuss why enterprise consumers in particular are so tempted to migrate to the cloud as well as the barriers that often prevent them taking the leap.
The first great migration to cloud computing was centered on its most obvious benefit in comparison to traditional computing, that of cost efficiencies. Cloud hosting, more specifically, is no different and offers a number of cost savings for enterprise which are missing from traditional dedicated platforms. Although dedicated servers can offer a good number of services which are much desired, in particular by enterprise consumers, the physical investment in them comes at a certain cost.
The Cost of Dedicated Servers
A dedicated server may be completely ‘at the disposal’ of that one customer and, as such, may provide numerous security and performance benefits (as listed further on in series of posts) but maximum efficiency, in terms of the cost of the platforms versus the resource used, can only be realised if the platform is running at full capacity. If not, the consumer will inevitably be paying for capacity which they are getting any use from, because the cost of such platforms is met upfront. Essentially, customers are paying for physical capacity and it is then up to them to make use of it. Furthermore, if they need to increase resources (disk space, processing power etc) beyond current capacity, it requires upfront investment into the next ‘step up’, including the unused capacity that comes with that, as well as any reconfiguration and set up work that is required.
The Cost of Cloud Hosting
Conversely, the cloud computing model, including cloud hosting, revolves around the concept of tapping into pooled computing resource on demand. In other words a consumer can access the resource they need as and when they need it, and, moreover, only pay for what they use. It can operate in a fashion akin to a household utility such as water or electricity where the consumer is plugged into the public service and is then charged for what they consume. The capacity of the shared resource is vast and so there is no stepping up from one fixed capacity to another and no additional setup costs therefore involved. In practice, if a business wants to try a new venture they need only invest in the resource they require whilst they require it, without taking on damaging longer term costs. What’s more, the costs incurred by the maintenance of the underlying infrastructure (i.e., the pooled computing resource) can be diluted by economies of scale where there is no need for bespoke environments to be created for each consumer. This saving is perhaps less significant with cloud hosting on IaaS (Infrastructure as a Service) and PaaS (Platform as a Service) than other cloud services such as SaaS (Software as a Service) because there are less opportunities to standardise elements of the service, although it still returns sizeable savings compared to traditional localised computing environments. Finally, cloud platforms are less likely to involve lock-ins to long term contracts. This is largely caused by the fact that there isn’t the need for a cloud provider to invest so much upfront in the creation and configuration of the cloud platform and consequently seek a return on that investment over a fixed term. Without this need for set up each time a platform is provisioned, cloud hosting services, like other cloud services can be simply turned on or off for the customer as and when needed. Part 2 of this article investigates some of the performance comparisons between cloud hosting and dedicated servers.
If you want to find out more about the respective benefits of cloud and dedicated hosting platforms then you can visit this dedicated and cloud hosting provider.
© Stuart Mitchell 2013