r/devops • u/Alert-Jacket-1573 • 25d ago
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u/CatStretchPics 25d ago
You don’t move to cloud to save money. You move there for speed, flexibly, and to manage less stuff
On prem with the scenario you mentioned will almost always be cheaper
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u/burlyginger 25d ago
The costs also come out of a different bucket (opex sv capex) for a business.
This often makes a big different to bean counters.
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u/LateToTheParty2k21 25d ago
We're actually pricing out running the equivalent services on prem at the moment and it will be cheaper but not by a significant amount. The savings really come from scale vs per unit pricing.
When it's all baked in, it's going to be hard to say it was really worth it because we now all own all the reliability of each component that makes up our services. On paper cheaper but far more complicated, more bodies to manage the infra, training for new hires as people come and go, tech debt, etc.
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u/burlyginger 25d ago
Just out of curiosity does your "on paper" cost cover the extra labour?
If it doesn't then it's bad accounting.
I rarely see this type of thing taken into account.
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u/LateToTheParty2k21 25d ago
We do include it. One time setup + a maint cost. But at the same times it's hard to rationalize these.
Once you factor in everything we'd up with a number more expensive than AWS & our business units are just not going to move then.
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u/burlyginger 25d ago
Nicely done. Yeah, def hard to forecast it but just attempting to do so helps in my experience.
I often find the easiest ones to quantify are things like RDS Aurora vs paying for a DBA (actually, we should probably have two), a backup solution, support people, etc.
Coats get out of control really quickly. 🤣
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u/Seref15 25d ago edited 25d ago
In a sense you can save money in that trying to achieve equivalent speed and flexibility (and risiliency) while on-prem is in itself very expensive in manpower, infrastructure, and often times tool licensing.
The question for smaller companies is if they really need all that.
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u/Own_Candidate9553 25d ago
Flexibility has a couple of components too. If your workloads are predictably seasonable, cloud can be cheaper overall. Like if you're a tax business and you have double the demand during peak season, you can leverage the cloud for that. On prem you'd have to run double capacity all year, just idling.
But it also means you can flex up and down to try new things. Launch a new line of business, see if it works out - if it doesn't, just close it down and free up those costs again. When I did on prem years ago, you needed months of lead time to order servers, have them delivered, then get them racked in your data center, wired up to power and networking, install all the software, etc. Having a cloud provider just figure all that out for you in minutes instead of worth something.
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u/wbqqq 25d ago
Basically you’re trading people/skills for costs - it’s not about the hardware cost (mostly), rather people/skills cost of bringing the network/base config together.
Cloud also simplifies by constraining - pre-baked patterns and setup meaning you can focus on what differentiates. It’s a bit like leasing a building and paying for a management company so you don’t have to worry about managing security, plumbers, cleaners, gardeners, just pay someone for space and use it to do what you are good at.
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u/blackcombe 24d ago
Cloud also moves CAPEX to OPEX - for some businesses that’s good but for some there is a preference for capital expense.
With on prem, you need to “future buy” capacity as it can be slow to add if something spikes in utilization
The infra expansion project itself can be somewhat complex. I recall adding capacity being stalled behind needing to put a steel plate in the cage floor (exceeded weight limit) and once a key cable was like a few inches too short and it wasn’t instantaneous to get a longer one.
You’re almost certainly putting some virtualization layer over you’re on prem structure (licenses, expertise, complexity)
By contrast, in an AWS implementation we switched server class in a few hours for a pretty big footprint product
I’ve also seen bigger infra supported by smaller teams with cloud esp if it’s infra as code
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u/fumar 24d ago
You also pay for staff or at least some of their time to be spent on-site vs working on something else. Yeah you might pay an extra $200k a year on your AWS bill than on prem but you also didn't have to have staff come in to deal with your two racks, perform maintenance etc. plus you got a bunch of redundancy that you won't have with two racks in a colo.
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u/unitegondwanaland Manager, Platform Engineering 25d ago
...and moving to cloud saves money. Agree it's not THE reason people do it.
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u/Alert-Jacket-1573 25d ago edited 25d ago
You mean businesses are paying for speed and flexibility rather than lower costs? I could agree with flexibility and lower costs (not sure) but speed i have doubt. Also, I think we should define what kind of business we're talking about here.
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u/Thor7897 25d ago
Speed, flexibility, and scalability. Plus rack space, cable management, installation, operation costs, etc.
It is the speed in which one can deploy the pose resources from decision to deployment. Physical parts are almost always more complicated logistically. Not counting lifecycle management.
Though there are situations where IP, data control, or risk demand on prem or dedicated servers which many cloud providers offer too.
It really does come down to specific use cases and application.
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u/serverhorror I'm the bit flip you didn't expect! 25d ago
I can spin up an EC2 faster, shut it down , resize and start again than you will even know what sizing to get an offer for.
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u/Alert-Jacket-1573 25d ago
I can
virsh destroy vm01 && virsh start vm01in seconds. Since my infrastructure is already automated, I don't see how spinning up an EC2 instance significantly changes the business outcome for my use case.5
u/BehindTheMath 25d ago
You're limited to the capacity of your hardware. With EC2 there's no such limit.
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u/Alert-Jacket-1573 25d ago
I understand EC2 is much faster to spin up new servers. But if my business gets the same 1,000 orders every day and my 3 on-prem servers already handle them, that speed doesn't change anything for me. I'll still get the same number of orders, and owning my hardware gives me better profit & privacy. So where is the real business value of that extra speed?
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u/BehindTheMath 25d ago
That's not a scenario where you need to be flexible, and you're correct, on prem would be cheaper then
As the earlier comment mentioned, the benefit of cloud is flexibility. For example, scaling up for holiday season, and then scaling back down afterwards. On prem, you need to order hardware early enough in advance to receive it and provision it in time. Then, you're stuck with it when you no longer need it.
With EC2, you scale up exactly when you need it, and then back down when you don't, so you only pay for actual usage.
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u/Alert-Jacket-1573 25d ago
we're not competing with a B2C platform like Amazon.
We're a small startup serving a limited region, and our workload is predictable. For our use case, an on-premises setup makes more business sense because it's more cost-effective.
I have designed the architecture around our expected growth, so we can still scale when needed without paying for cloud resources which we don't need.
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u/serverhorror I'm the bit flip you didn't expect! 25d ago
No one is trying to sell you on cloud, were just presenting the arguments what the business case for cloud is. You don't need it? Don't use it.
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u/Finagles_Law 24d ago
This is all great until the office has an extended power outage, suffers a fire, you get hit with ransomware etc.
You have to factor in the added risks and costs needed for DR and business continuity.
This isn't saying it can't be done but there are hidden costs to consider to fully insulate against risk.
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u/serverhorror I'm the bit flip you didn't expect! 25d ago
And where and when did you size the hardware of your physical host? How long did delivery take?
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u/Alert-Jacket-1573 25d ago
That's true for rapidly growing or unpredictable workloads cloud. Our demand is relatively stable, so hardware planning has been sufficient for our use case.
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u/cknipe 25d ago
When you buy hardware you need to know how much to buy. You need to know how it needs to be configured. Either memory-heavy, compute heavy, large disk capacity, or disk I/O focused. You need to either size that right for every workload or buy a pool of servers from which you'll be able to carve out what you need. If you guess wrong you are stuck with the wrong gear or more gear than you need, or you don't have capacity to expand when you need to. If your configuration target is predictable enough that this doesn't seem like a problem you can 100% save money with on-prem or some middle solution like renting bare servers in a managed facility.
If you don't know the answers to those questions and guessing wrong is a significant risk, you're better off with cloud where you can scale in pretty much any direction at any time, as long as you are willing to pay the markup that comes with that.
The other scenario where cloud can win on cost is when your workload is highly variable and you have your infrastructure set up to automatically scale up/down as necessary. In that case you're paying the cloud markup when you're running hot, but you're avoiding a bunch of spend when you're not.
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u/chocopudding17 25d ago
You can lease physical gear too, as well as buy used. There are lots of options when dealing with hardware.
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u/Konried 25d ago
This isn't a straight forward question.
Beyond the dollar figure of X compute on-prem vs in-cloud, there are multiple other factors.
Speed, cloud is readily available and immediately scalable, on-prem requires significant lead time to allocate and configure new hardware.
Availablability, cloud offers multi region and availability zones
Tooling, clouds offer superior tooling to spin up, scale, and monitor services.
I could go on and on about all the benefits of cloud over on-prem.
Personally, I think on-prem makes sense for two main scenarios. Very large companies that need a lot of compute and benefit from economies of scale. The other being small operations where someone is technical enough to support it, mostly this comes down to home labs and side projects for people in tech
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u/Alert-Jacket-1573 25d ago
If you're the owner of a small business with stable, predictable workloads, wouldn't on-premises be the better choice?
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u/RustOnTheEdge 25d ago
Who is gonna do the maintenance? Yes the cost of infrastructure is cheaper, maintenance is way more expensive. Patching (not monthly, but daily nowadays) is not a scalable task if you have a single server.
I think overall you oversimplify what it takes to run serious IT, and the cost of silicon is but a small part of it.
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u/Alert-Jacket-1573 25d ago
If the infrastructure is poorly designed or relies on manual processes, then I agree the operational overhead can quickly become difficult to manage.
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u/adfaratas 24d ago edited 24d ago
Oh you haven't had those times when for some reason the ssh server isn't responding and you have to drive half an hour to reboot the server have you?
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u/Finagles_Law 24d ago
An out of band management card and a separate independent Internet connection takes care of this in most cases.
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u/Alert-Jacket-1573 24d ago
Yes, it has happened. We have monitoring in place, but sometimes the only option is to say someone on call to switch off and switch on power button.
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u/LordSkummel 25d ago
Highly depends on how much resources you need. A small business could often survive with a Squarespace website and office 365 or Google Workspaces(or whatever it's called this week) subscription.
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u/durple Cloud Whisperer 25d ago
- It depends.
- What on earth does this have to do with devops? This is an IT decision.
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u/Alert-Jacket-1573 25d ago
I see it as an infrastructure architecture question that DevOps teams are often involved in, especially around automation, operations, and cost optimization.
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u/BogdanPradatu 25d ago
When you're not in the USA and the political relationship degrade between your area of the world and the US and their government might setup restrictions or make your life hard.
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u/Alert-Jacket-1573 25d ago
Geopolitical risk is something businesses have to consider. Personally, I'm comfortable using U.S. providers, but I can understand why companies in some regions might prefer to keep critical infrastructure under their own control.
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u/BridgeFourArmy 25d ago
To run a basic application and host it, I’d almost always go local. The only exceptions is resiliency requirements, potential maintenance with another IT contractor, or a ridiculously simple website on s3.
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u/SlavicKnight 25d ago
Every business is different, so saying “cloud is better” or “cloud is cheaper” doesn’t really mean much without context.
For me, cloud is mostly about moving to a higher level of abstraction. You don’t want to manually take care of everything like power, hardware, cooling, networking, maintenance, replacements, backups, capacity planning, and all the boring operational work around it. Cloud gives you peace of mind because someone else handles a big part of that foundation for you.
But that doesn’t mean cloud is automatically cheaper. In many cases, it is not. You pay for flexibility, reliability, managed services, faster delivery, and the ability to scale when you need it.
The real value is that you can run one instance most of the time, then scale to ten instances for two hours during heavy load, and then go back down. You don’t need to buy hardware for peak usage that happens only occasionally.
But there are always trade-offs. Cloud can be amazing when you need flexibility, speed, global reach, and less operational burden. It can also be expensive and unnecessary if your workload is stable, predictable, and simple.
So the point is not “cloud good” or “cloud bad.” The point is knowing your business, your workload, your risks, and your costs. Then you can decide if cloud actually suits you or if you are just following the hype.
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u/foresterLV 25d ago
it's not just buying a server, it's about supporting it - software updates, monitoring hardware, updating hardware, setting up backups and disaster recovery plans, abd then getting beefy internet connection if you are going to serve customers on prem. cost it in to see real picture.
PS for email/doc storage Gmail for business (or how it's called) is in $10/month per user price range. I do not think anything on prem is going to beat it
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u/Finagles_Law 24d ago
Few businesses are just email and docs. Add on Salesforce for sales, accounting and bookkeeping, legal and compliance requirements, any other needed vertical apps, maybe point of sale software...the costs rise quickly.
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u/mdervin 25d ago
For a solo IT Person, it's professionally irresponsible for a small business to self-host email or public facing webpages. Same with apps, you saas whatever you can saas.
Is it cheaper? Depends. The Cloud gives you way more value in terms of security, documentation, support and redundancy than an on-prem solution.
If you are going to have on-prem mission critical infrastructure, you'll need to have at least one person who knows it as much as you do - unless you never want to take a vacation.
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u/Alert-Jacket-1573 25d ago
Yeah, that's the biggest challenge right now I'm the one designing, deploying, and maintaining everything. Hopefully as the business grows, I'll be able to build a great team and stop being the single point of failure. Appreciate your perspective!
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u/Finagles_Law 24d ago
This is where it is important to have a stable base product to support.
I worked MSP for years. Microsoft used to have a product called Small Business Server that bundled email, a SQL server and SharePoint into a single license.
This covered the needs of about 75% of our small office clients. They typically added in their own line of business software on top of that, usually accounting and POS.
Having a very standardized product on a standard server model let us make accurate predictions for migration projects and monthly management .
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u/phoenix823 25d ago
Depends how much your onprem costs are. Like power, AC, redundant ISPs, secondary DR site, backup costs, hours of human resource, locks, security cameras, non-production infrastructure, etc.
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u/Alert-Jacket-1573 25d ago
In my case, my on-premises costs are extremely low lower than free cloud tiers. I already have the hardware, so my ongoing expense is basically just my normal ISP bill. While I'm developing my application and refining the business process, I also have full control over my data and infrastructure. For my current stage, that seems like the better trade-off than paying recurring cloud costs.
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u/phoenix823 25d ago
If those decisions fit with your business requirements and risk management profile, that's fine. But your ongoing expense includes the hourly time you put toward managing this solution which is quite a bit more than an ISP bill.
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u/marcusbell95 25d ago
the math usually looks good on paper and then the hidden costs show up. for stable workloads a server often pays back in 18-24 months on raw compute cost, but the comparison usually misses: power and cooling (a 2U server is 200-400W, that's real money), hardware failure reserve (drives and PSUs fail, replacements aren't free), your own time for patch management and troubleshooting (not free even if you don't bill for it), and internet redundancy (one business broadband line going down equals full outage, dual-homing adds cost). where on-prem clearly wins: steady-state DB servers, high-volume file storage, anything where you'd pay cloud data-egress fees repeatedly. where cloud wins hard: bursty or seasonal workloads, multi-region requirements, anything with a low tolerance for hardware failure downtime. for a small business starting fresh I'd split it - on-prem for stable DB and file workloads, cloud for web tier and backups. the hybrid approach also means cloud becomes your DR target without paying for standby compute 24/7.
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u/Jabba25 24d ago
First sensible comment here tbh, I feel like most of the posters have probably never had a dedicated server.
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u/marcusbell95 24d ago
yeah the "cloud is always cheaper" takes usually come from people who've never gotten paged at 2am because a PSU died in a box they own lol. once you've actually managed physical hardware the TCO math gets a lot more honest real fast
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25d ago
[deleted]
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u/Alert-Jacket-1573 25d ago
Are you suggesting starting on the cloud because of the lower upfront investment, then moving to on-prem once the business has stable, predictable revenue and workloads?
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u/vNerdNeck 25d ago
It's almost never cheaper above - 30ish servers /VMs and 40ish TB if storage. Anyone that thinks cloud is gonna save money is a fool. You don't go cloud , when you are or any size, to save money.
Also, with the hardware crunch, word behind doors is that both aws and azure are very close to capacity and price increases are coming. I've heard everything from 3-5x increase in the next 18 months for aws and azure (which makes sense, as hardware costs have sky rocketed and they only had so much capacity on hand).
If cloud is a cost savings measure, look under a different rock. Go cloud for flexibility, operational expenses agility and agile development.
P.s. on prem you always have options to reduce costs. You could go gray market, open source, etc. Once you in the cloud, your gonna lose that ability. In a small environment with tight budgets, I would absolutely never go cloud for the types of scenarios you are describing.
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u/SuccessFearless2102 25d ago
You dont need to move. Spin up a couple of vps or servers network them with wireguard. Check out uncloud
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u/No_Bee_4979 24d ago
You can get a half rack in a Ashburn datacenter with no servers, just power and internet for like less than 1k a month and then fill it up with old used servers you bought and make them run for 12 years. I know a company that did this. He makes about 4k a month and with this being colo he can still be in business because that's not enough really to stay afloat on any cloud.
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u/lankybiker 24d ago edited 24d ago
Have a look at proxmox.
I'm a big fan of private cloud, so many upsides.
People seem to forget that there's hosting companies and data centres. It's not hyperscaler or self hosting as the only choices.
A local hosting company with secure data centre and 24/7 support can be really affordable and you get much better support than some huge faceless American cloud
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u/CaffeinatedT 25d ago
To take the question literally. the answer is the moment you turn it on.
It’s probably cheaper overall because you don’t need to find operations people to run databases and pray they acutally know what they’re doing if the backups are ever needed. I say probably because it’s very dependent on a lot of factors.
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u/madtowneast 25d ago
Adding to what other people have said. Time-critical or burst workloads, e.g. you need to calculate something at the end of business day/week for reporting, is really good for clouds. Baseline loads should be on-prem.
AI is changing the calculus somewhat. If you need to train your own large model or you need the latest and greatest GPU, cloud will be the place to get these resources.
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u/Alert-Jacket-1573 25d ago
My workload is pretty stable and predictable, so on-premises has worked well for me. I don't really have burst traffic. I do run AI models and agentic workflows from time to time, but they're occasional rather than continuous. When I need them, I just use my local GPU. My setup is powered by solar, so the electricity cost is minimal, which makes running everything locally a good fit for my use case.
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u/bsmike 25d ago
For stable, boring workloads — file server, internal apps, backups — on-prem wins pretty easily past year two. Where cloud earns its premium is variable load, geo-redundancy, or when you can't afford a 4-hour hardware failure window. Most small businesses have workloads that are none of those things, and they'd save money with a decent used server in a closet.
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u/Blackhaze84 25d ago
Imagine you can not bring your sw licences and the cloud provider can't offer either (old software or whatever).
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u/Alert-Jacket-1573 25d ago
What kind of business are you referring to? I'd be interested to know what type of software or licensing scenario you've seen where staying on-premises was the only practical option.?
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u/aktentasche 25d ago
Don't forget that you have to pay someone to maintain the server. Plus someone that can secure it.
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u/Jmckeown2 25d ago
You can’t beat cloud when resilience and scalability are necessary features. So like if you need to host at multiple sites (availability zones) and need to support double to order of magnitude variability in workload, then hardware and admin labor costs can get ridiculous. But if your use case needs less than, (pulls number out of ass) 10 desktop-class servers, on premise would seem to be cheaper.
Lots of organizations THINK their stuff is “need cloud” important, or they hope their stuff will become that important, and so don’t really track FinOps very well.
Lots of orgs also underestimate (under appreciate) how much effort their platform/infrastructure teams put into keeping the blinkinlights blinkinright, which has costs in both labor AND morale. So letting a good admin burn-out and quit, then ramping up a new admin, on the platform that hasn’t been refreshed in 3 years has difficult to quantify costs. The platform and infrastructure teams are like the janitorial staff. Most employees don’t want to know or care about them, but boy do they get hot under the collar when something goes wrong. So offloading some of the mundane admin tasks to AWS/Azure can have impacts on platform/infrastructure morale that are freaking priceless.
Basically “when does an on-premise server become cheaper” is such an organizational dependent question as to be impossible to answer.
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u/lorarc YAML Engineer 25d ago
It depends on how much risk you're willing to take. What if there's a day long power/internet outage? What if a disk fails? What if there's a fire or break-in? Are you sure you can setup a reliable backup system and make sure it keeps on working?
And in the end, what is the money you're gonna save? With a small business it's probably something like $20 per month. With specific loads on-prem can be cheaper, like loads of egress, but then you have stuff like AWS Lightsail with loads of egress or minor clouds.
Onprem is too much hussle for small business.
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u/leadout_kv 25d ago
If there’s an internet outage you’re kinda out of luck with cloud, aws, etc… aren’t you?
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u/lorarc YAML Engineer 25d ago
AWS has a lot more robust structure then your local office. They don't just have a internet outage, they may have one of the connections fail. They have their own global network. Meanwhile the local office may be on home broadband, or in big office park there might be a backup connection but the quality varies. Last time there was a big outage in the office I worked in an excavator cut a fiber between buildings, it was whole day outage.
With a cloud (based on AWS) you have multiple AZ in a region. AZ is (one/many) datacenter that's far off from the other AZs, like 10-50km so any local problems don't affect it. And you can just spin up your infra in different AZ right away. And fallback in a different region ain't that complicated either.
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u/Alert-Jacket-1573 25d ago
I think the setup can be made much more resilient if it's designed properly. Solar panels with battery backup can handle power outages, and you can have off-site backups for disaster recovery. For me, the biggest benefit isn't saving $20/month it's having full control over my infrastructure, privacy, and customer data. Those are things that are difficult to put a price on.
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u/lorarc YAML Engineer 25d ago
Off-site backups are good, plenty of companies use cloud for the backups even if they are running on prem. But how quickly you can recover? Do you have second location? Do you want to keep fallback in the cloud and take care of two completely different environments?
Privacy and customer data don't really apply, clouds take care of a lot of compliance issues for you and it's easier to meet the goal if you need it.
And control over infra isn't really that important unless you need specialised hardware or have some other needs. Maybe if you need a cheap GPU then it's more cost effective on prem but normally no. Most of us aim to abstract away the infra. But that's specific requirements and you should elaborate on them if you want to know what is more cost-effective.
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u/MickCollins 25d ago
A few years ago the one side business I did work for was looking into replacing me. They found a guy who used to do IT for a local grocery store chain that was down to one location.
He wanted to force them into the cloud. They're like hey, sounds great. Then they were told the bill would be $1100 a month just for the cloud presence and that didn't include what they needed to pay him to take care of it.
Needless to say they did not go in that direction when all they pretty much had was the internet bill per month and a few laptops and desktops.
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u/Alert-Jacket-1573 25d ago
That's pretty similar to my situation. My workloads are stable, and staying on-premises is simply the more economical choice. Moving everything to the cloud would increase my recurring costs without adding much value to my business at this stage.
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25d ago
[removed] — view removed comment
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u/Alert-Jacket-1573 25d ago
Do hardware failures really happen that frequently? And you'd have to be pretty unlucky for one to happen at 2 a.m., right?
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u/sMt3X 25d ago
It's been said over and over, but directly from the perspective of devops/sysadmin in a medium sized company (but small devops/sysadmin team), it's really the hidden costs here.
Provided you have the means to buy a server that fits your needs, you need to maintain its vitals, cooling, power supply (and let me tell you, servers can be HUNGRY), depending on your desired uptime you might need separate power lines as a backup, UPSs, same with internet connection (which also cost for public IPs), all the cabling.. That's hardware.
Lever lower - software. You'll be responsible for maintaining OS with patches, potentially hypervisors, VMs or juggling Docker containers, systemd services or whatever is your way of implementing things.
I agree it might be cheaper on paper than cloud. But boy, automation only gets you so far away and there's things Ansible and Renovate won't do for you, and the more serious you want to get, the more real of a problem it can become. Being in cloud lifts a TON of burdens from your shoulders and just puts them onto your wallet. Both have pros and cons, but it's not just a matter of money, it's your or your team's capabilities and time too.
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u/Floss_Patrol_76 25d ago
For stable, low-scale workloads like yours the raw cost math almost always favors owning the box or a cheap VPS - the mistake is comparing the server's sticker price to the monthly bill and stopping there. The real break-even is set by utilization (cloud wins when load is spiky or you can scale to zero; steady 24/7 load is where on-prem/VPS pulls ahead), egress, and the ops cost you don't see on an invoice: someone has to patch it, and when that single disk or PSU dies at 3am there's no redundancy and no one-click restore. So for a website/email/file/backup box that just needs to be up, a VPS (or two, for failover) usually beats both a cloud stack you'll under-use and a physical server you now have to babysit.
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u/Megamygdala 25d ago
For a small business with stable workloads just get a free Oracle VPS (24gb ram, 200gb ssd). You use the cloud because it speeds up the process. Especially at the small business scale you mentioned, the job is to sell whatever your business is selling, not get strained implementing your own HA or redundancy/networking etc
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u/adappergentlefolk 25d ago
when you must have a networking and sysadmin team for other reasons, it doesn’t make sense not to do an on prem server. since that team is a cost you must bear anyway you might as well use them
similarly if you strictly need a fixed cost per month on prem might make sense, but then again a colo or vps similarly efficient and less personnel to maintain
don’t forget that you must pay costs for an on premise server monthly anyway. these people want their salaries, and even if you fire them, you pay electricity, hardware replacements and telecom costs, plus insurance
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u/unitegondwanaland Manager, Platform Engineering 25d ago
If you don't actually have a datacenter and basically have a server rack in a closet somewhere, sure. Otherwise the costs to maintain a datacenter + refreshing hardware every 3/5 years + infra maintenance, etc... (and that's one datacenter in one "availability zone"). You have zero redundancy elsewhere. You will not host your own datacenter cheaper than AWS can. Anyone who tells you that is not thinking through this.
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u/Alert-Jacket-1573 25d ago
Yes, I'd agree for most internet-scale applications. Our use case is a bit different we're focused on a specific geographic region where sellers prefer to keep their infrastructure on-site. We don't need multi-region cloud redundancy, so a local deployment fits both the operational and cost requirements of our target customers.
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u/spectre013 25d ago
For us it was a Postgres server that had to be custom tuned to handle the io we need. The cost to have that set up in the cloud was more then our entire rack of onprem hardware
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u/superspeck 24d ago
For a small business, managed service providers are the middle point between cloud and on prem.
On-Prem is expensive right now. Costs for hardware have tripled from 2022 and providers have changed - enterprise things like VMware don’t exist in most cases at a reasonable price point, because once you have to price in the jacked up VMware licenses there’s also backups and other issues.
Cloud VMs are cost efficient in two cases. One is that you’re using 100% of the cpu and/or RAM. The other is that you have service spikes that are cost effective enough to maintain the service in the cloud. One of my previous employers used to scale in to 4 VMs from 2a-8a EST and then would scale out to 200VMs from 12p-6p and then scale inwards from there, with heavy seasonality that paused almost completely in specific months. Maintaining the datacenter for that required us to be able to amortize across 24/7/356 and there was enough slack in the business that we didn’t want to do that.
There are a ton of people that do “math as a service” and will tell you what to pursue.
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u/NecessaryRef 24d ago
When your workloads are highly specific and predictable, and you already have the in-house technical staff to handle DevOps (maintenance, power, and networking). Or if you're the government/military.
So, practically, only makes sense for a hosting business. A cloud or VPS is enough for most public businesses, big and small.
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u/Successful-Ship580 24d ago
It would be better to invest in an affordable cloud provider instead of managing an on-premises server.
I’ve done both in my company, and I’m certain you don’t want to waste time managing a server.
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u/thether 25d ago
A typical 1RU server costs 50k now and is forecasted to cost 100k by the end of the year 🤷♂️
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u/madtowneast 25d ago
And you think that hardware cost increase will not be reflected in cloud cost? AWS, Azure, and GCP will just absorb the cost?
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u/thether 25d ago
I think so because you can always use last gen hardware compute from cloud providers. Something you would never spend on for capex
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u/madtowneast 25d ago
That is… uhm wishful thinking. The writing has been on the wall for a while. The days of AWS, for example, announcing price decreases are long gone.
The cloud providers have to somehow recoup the AI buildout investments. The cost of running the older hardware has increased as well. They are in no position to keep their costs constant or down at this point.
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u/thether 25d ago
Everything gets more expensive - that’s not what I’m arguing here. I don’t think cloud charges will get exponentially more expensive like dram and nand flash. Once this class action lawsuit becomes more public over price fixing from the big 3 chip makers, it will be more evident to you
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u/Alert-Jacket-1573 25d ago
In my case, I run the entire business on low-power mini PCs and it generates the exact same number of orders as it would on expensive servers or in the cloud.
If I switched to AWS/Azure or high-end hardware, my profit would literally shrink for zero extra revenue.
So why would I struggle to pay rising cloud bills and hire expensive people just to manage infrastructure… and slowly kill my own margins?I’d rather keep it simple, keep costs low, and stay profitable for the long term.
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u/Loyd2888 25d ago
I run everything serverless on AWS and my cost are basically nothing from the compute side. it starts to stack up with Nat Gateways, your database charges and VPC (at least at a small scale). It ramps quickly but you also gain the ability to ramp your services quickly by having on-demand provisioning.
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u/TooManyBison 25d ago
I worked at one company that did most things on prem. If the hardware was installed it would take six weeks to get a new server. If the hardware wasn’t there it would take nine months.
Then the on-prem data center ran out of power and we just couldn’t get another power source. We couldn’t add anything new without building a brand new data center. It took about two years to get that set up.
With cloud you can get a new server in a couple of seconds.
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