[ale] Cloud Computing versus colo

[Michael B. Trausch]

On Fri, 2008-07-11 at 10:03 -0400, Atlanta Geek wrote:
> I've never had a colo before and it looks like I will need to build
> one for our customer.  We need to get some demo servers off site. This
> may become a 'Software as a Service' type product.
> We are also considering Amazon's EC2 platform.  Anyone with experience
> with these. Are the costs comparable to colo. Which one for a 24 hour
> service would be best?

Amazon's EC2 platform is best for overflow computing.  Unlike the Amazon
S3 server, EC2 is pretty expensive.  Consider the following situation:

You need 4 servers; two Web application front-end machines, a database
server, and an email server, all running under a single domain.  You
expect heavy load, so you don't use these 4 machines as VMs, you run
them on bare iron.  Assume that you are renting a ¼ rack from a colo
provider.  I can't imagine that the monthly rent would be more than
$300--$500 per month, plus the initial investment of the hardware.
Figure, then, that the annual cost would be between $3,600 and $6,000.

Further, lets assume that the Web servers would be planned to have dual
core CPUs, the database server would have two quad-core CPUs, and the
email machine would have a single dual-core CPU, for a total of 14 CPU
cores of processing power, or more simply, 14 CPUs.

Let's compute, then, what it would cost to provision this from Amazon.
Heading over to their rates page [1].  Ignoring storage requirements for
a moment, the two Web application servers and the email server would be
"Large Instances", and the database server would be a "High-CPU Extra
Large Instance".

There are 8,766 hours in one year (using 365.25 days as the figure for
one year, and not counting for things like leap seconds, minutes, etc.),
and instances are charged a fixed rate, per hour.  The Web application
servers and the email server would then have an annual cost of (8,766 *
3) * $0.40 = $10,519.20.  The database server would have an annual cost
of 8,766 * $0.80 = $7,012.80.  The total annual cost, then, running
these services on Amazon's EC2 platform would be $17,532.00, or nearly
three times what I would estimate to be the high-end of using real metal
in a data center.  If extra storage is required beyond what EC2 provides
for each instance, then S3 will have to be leveraged, as well, though in
comparison, that cost is very small.

Of course, you'll need to get quotes from various colocation providers
to compare these numbers for saneness.  But running something like a
small domain on Amazon's EC2 is prohibitively expensive, I think.  I
kind of wish I would've wrote down the numbers when I last called
Internap for a quote some time back, I'd had a full-rack quote, but I
cannot remember exactly how much that was.  IIRC, $300-$500 per month
for a quarter-rack is highballing the estimate a bit.

Now, if you factor in for the cost savings of having someone manage the
hardware for the servers, well, there probably aren't any.  The system
administrator is still necessary, and you'll be paying someone to manage
the software as it is.  If you stock extra parts for the servers so that
you can quickly bring them back up when parts break, and your system
administrator is knowledgeable in hardware, and is able to fix it when
it breaks, then there is little to no savings.  If you have to pay
someone to be a dedicated, on-call hardware person, there may be _some_
savings, depending on how much that person or contract costs.  That,
however, is going to be situation-dependent.

Personally, I would use EC2 as an "overflow" for processing needs, not
as a primary source of my computer time.  It might be reasonable, for
example, for some of a company's R&D to be done using EC2 to speed up
the results of a complex simulation or something when local computing
needs exceed the available computing power... but I wouldn't use it for
anything more than that.

	--- Mike

[1] http://www.amazon.com/gp/browse.html?node=201590011

-- 
My sigfile ran away and is on hiatus.
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