Have you ever heard the expression “Why buy a cow when milk is so cheap?”. The basic idea is that if you are able to obtain some commodity (milk) cheaply and easily then you will be less inclined to pay for the commodity’s source (the cow).
We can use this as an analogy to explain Cloud Computing. Let’s look first at the analogy for buying your own IT infrastructure (the cow).
If you buy a cow then this is a large up-front expenditure. It is viewed as a long-term investment and is therefore a capital expenditure. This is like buying your own servers.
If you buy a cow then that is not the end of the investment. You will need somewhere to keep your cow such as a field, barn or shed. Likewise, if you buy your own servers then you will need to have a server room in which to store them.
Once you have spent a lot of money on your cow you don’t want anyone to steal it or for it to be injured. Depending on how much you value your cow, you will need to keep it secure by upgrading your fencing, putting a lock on your barn or even installing expensive CCTV to keep those cattle rustlers away (Yee-haw!). You will also need to protect it with a good layer of hay and remember to keep its vaccinations up-to-date to prevent disease. Similarly, if you have your own servers then your server room will need locks, fire protection, electrical surge protection, etc. Someone will also have to update your software to protect against virus. All of the above require specialist expertise. Of course, you will also have to keep your cow fed and watered and your servers will consume electricity in the form of direct power and indirect power such as that needed for air conditioning.
Lastly, and sadly, your cow will one day die. Worse than that, it may stop producing milk long before it does. Either way, that means buying a new cow. Just as your servers will eventually need replacing and may become inefficient sooner than you think, leading to the need for renewed expenditure.
Let’s turn now to an analogy for just buying the IT that you need today, and no more. This is like buying only the milk that you require on a day-to-day basis. This spreads the costs along the way and is a revenue expenditure.
Let’s be old fashioned and have our milk delivered to our doorstep, just as we would choose to have our IT delivered to our desk. Now you no longer need a large amount of infrastructure for your cow, just a fridge big enough for a few pints a day (you can even leave it outside if the weather is cool). Security is less of an issue as you only have a pint or two at any one time to be stolen from outside the door. Likewise, you will have end-user devices but no expensive servers (although you will need to keep those devices secure to prevent unwanted ‘rustlers’ getting to your servers). Furthermore, you will not need to worry about viruses, fire protection, air conditioning, etc. Someone else will do that for you and they will charge you for the privilege – but their economies of scale should reduce the overall costs to you.
Another advantage is that if your family grows or shrinks or sees a temporary change in demand (going on holiday) then you can adjust your milk delivery on a flexible basis. Cloud computing agreements, if set-up properly, will allow you to flex your IT in the same way. Best of all, you don’t ever have to worry about buying a new cow, sorry, a new batch of servers.
Of course, my analogy could have been a different one, for example buying your electricity rather than building your own electrical power plant. IT has reached the stage where it can be provided like a utility such as water or electricity, hence the term utility computing. You pay for only what you need or use.
If you want your business to be a farm, or you already have farming expertise about, then that’s fine. In that case then owning your own cow/IT infrastructure may be right for you. But if your core business is elsewhere, then think about getting your milk delivered and consider hosted IT.