>The equation of cloud vs not cloud is much more complicated than pricing. In fact, I'd argue price is the least impactful component, especially since it's getting cheaper and cheaper.
for some parts of some businesses, you are right. if compute time is a very small portion of your budget, who cares if you pay a little more? I mean, tools are a vanishingly small portion of my budget, but they are really important to the continued functioning of my company, so I'm willing to pay a very hefty (percentage wise) premium for nice tools. It's only a few bucks extra, even if it is a 50%-80% premium over the cheap stuff, so who cares?
My understanding was that netlfix moved it's cpu to the cloud, for the reasons you stated. If processing is a small portion of your budget, paying more for hosting of your CPU, and having the excellent flexibility of the cloud might make a lot of sense.
My further understanding was that netflix used something else for actual streaming distribution of the movies; amazon wanted too much money for that, and unlike CPU time, bandwidth /is/ a significant cost for Netflix.
The parallel in my business is that probably the largest monthly cost of mine is new hardware (followed by power for my existing hardware) Unlike netflix, my margins on each bit of hardware I get are pretty thin. An 80% increase in the cost of my hardware would kill me outright. I put a lot of effort into keeping my hardware (and my power) costs down.
(to be clear, moving to amazon ec2 would increase my costs by quite a bit more than 50%-80% - in most cases, ec2 would charge me more wholesale than my customers pay me, retail, for guests.)
and I don't know. Maybe if I started actually selling hardware (which I've considered... I'm pretty good at choosing/assembling, and can do it quite a bit cheaper than Dell's retail prices; the big hangup would be sales.) and I started spending thousands of dollars a month on tools, I might want to spend more effort getting the cost of tools down.
That's the idea behind using standard parts. A screwdriver is a screwdriver; I can easily switch brands. The same, really, could be said for "unix box on demand" services like ec2. It's not that difficult to move from one provider to another, or on to your own hardware, if that makes sense down the road.
On the other hand, with the "proprietary programming environment" systems like appengine, it may be somewhat more difficult to move off of the system. (the open-source runtimes may have progressed further since last I looked, but last I looked it was pretty much run it on google, or re-write your code.)
for some parts of some businesses, you are right. if compute time is a very small portion of your budget, who cares if you pay a little more? I mean, tools are a vanishingly small portion of my budget, but they are really important to the continued functioning of my company, so I'm willing to pay a very hefty (percentage wise) premium for nice tools. It's only a few bucks extra, even if it is a 50%-80% premium over the cheap stuff, so who cares?
My understanding was that netlfix moved it's cpu to the cloud, for the reasons you stated. If processing is a small portion of your budget, paying more for hosting of your CPU, and having the excellent flexibility of the cloud might make a lot of sense.
My further understanding was that netflix used something else for actual streaming distribution of the movies; amazon wanted too much money for that, and unlike CPU time, bandwidth /is/ a significant cost for Netflix.
The parallel in my business is that probably the largest monthly cost of mine is new hardware (followed by power for my existing hardware) Unlike netflix, my margins on each bit of hardware I get are pretty thin. An 80% increase in the cost of my hardware would kill me outright. I put a lot of effort into keeping my hardware (and my power) costs down.
(to be clear, moving to amazon ec2 would increase my costs by quite a bit more than 50%-80% - in most cases, ec2 would charge me more wholesale than my customers pay me, retail, for guests.)
and I don't know. Maybe if I started actually selling hardware (which I've considered... I'm pretty good at choosing/assembling, and can do it quite a bit cheaper than Dell's retail prices; the big hangup would be sales.) and I started spending thousands of dollars a month on tools, I might want to spend more effort getting the cost of tools down.
That's the idea behind using standard parts. A screwdriver is a screwdriver; I can easily switch brands. The same, really, could be said for "unix box on demand" services like ec2. It's not that difficult to move from one provider to another, or on to your own hardware, if that makes sense down the road.
On the other hand, with the "proprietary programming environment" systems like appengine, it may be somewhat more difficult to move off of the system. (the open-source runtimes may have progressed further since last I looked, but last I looked it was pretty much run it on google, or re-write your code.)