

McKinsey: Data Centers Are Cheaper Than The Cloud - 1SockChuck
http://www.datacenterknowledge.com/archives/2009/04/15/mckinsey-data-centers-cheaper-than-cloud/

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mattmcknight
The McKinsey report doesn't exactly come to that headline conclusion. It says
that there is a point where if you have enough servers it becomes more cost
effective to run your own data center, simply because can spread the cost of
people and enterprise OS licenses across enough CPUs that the cost drops below
the similar cost Amazon charges you, minus Amazon's profit. For small and
medium sized enterprises, they claim cloud services are cheaper.

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mpk
Simply put, if you require vast amounts of processing power, it's probably
cheaper to just run your own data center because otherwise you end up paying
for a cloud-based data center with all the third-party service overhead.

If, on the other hand, you simply require the equivalent of a few machines on
the net, it's cheaper to buy a piece of cloud, because the extra per-CPU cost
is small compared to the costs in maintenance, personnel, etc that you would
have to keep in-house.

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LukeG
You see Nick Carr's response?
[http://www.roughtype.com/archives/2009/04/the_big_company.ph...](http://www.roughtype.com/archives/2009/04/the_big_company.php)

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rarestnews
Does it even worth researching? To simplify - provider (let's say Amazon)
spends A dollars to build and support data center and makes B dollars profit.
It charges you A+B.

DIY cost is very close to A (if you're talking datacenter scale).

A+B > A

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codeslinger
This report is kind of obvious. Those of us using AWS and others knew about
this a long time ago. Its pretty simple math to be able to see when your cloud
will cost more than DIY.

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kragen
It can be hard to cost out sysadmin costs in advance, especially for small
companies, and it's nearly impossible to assess sysadmin risks in advance (for
small companies).

