Friday, November 29, 2013

Cloud Hosting Is An Expensive Proposition

The 'cloud' is said to be the future, but it's an expensive prospect if our experiences at TVE are anything to go by.

At TVE we use hosting providers in the UK, US and Germany and the average cost, all inclusive for 1Gbps, 56GB RAM, hex core and no bandwidth cap is £370 per month. We can scale using caching using our CDN provider, who provide bandwidth at rates we cannot disclose, but at large scale can easily undermine any of the companies mentioned below. This price includes all software from Microsoft.

I've just costed a similar setup on Microsoft's Azure and the cost, based on our current usage, came to £794.46. Rackspace quote £730 a month for their nearest equivalent, but without any software such as VMWare, Windows Server and SQL Server. Amazon pricing is, in my opinion, impossible to estimate, but comes in at around £7,000 without the database licence, according to

None of the above offer managed services, so with all of them you will need to also employ staff or consultants who have experience of deploying into the cloud.

Services offering sub £500 a month core functions in the cloud therefore provide huge cost savings, especially if that sum includes storage and bandwidth.

I encounter a lot of startups who select the cloud for their services, which makes sense if you have no traffic, but as soon as you have volume, the cloud makes no sense for hosting unless you are building your own cloud environment.

The 'cloud' has a long way to go to become a cost effective proposition, notwithstanding issues with security and reliability.