The business of cloud computing

I’m new to Enterprise. I mean, I’ve been at ActionBase for what, two years now? But most of my part-time job was spent in our “recording studio” (really an office with a door that closes all the way), putting together our training and publicity videos trying to explain the new concept that is “human process management

In the past, I’ve worked as a journalist, the occasional webmonkey, and even wrote my own webcomic for almost two years. I’ve witnessed the web experiencing its own Cambrian Explosion of products, platforms and languages.

Enterprise… Enterprise is different.

In my two years here, I’ve learned that Enterprise tends to require more maturity, where the bleeding edge can sometimes wait until it’s the scabby edge. The shiny, reflective-logo-laden web tends to forsake this reliability for innovation. Which is just fine, thanks-very-much, where geeks are concerned.

But now the Big Thing seems to be cloud computing. Is cloud computing the answer?

Cory Doctorow writes about his issues with Cloud Computing in the Guardian:

[T]he main attraction of the cloud to investors and entrepreneurs is the idea of making money from you, on a recurring, perpetual basis, for something you currently get for a flat rate or for free without having to give up the money or privacy that cloud companies hope to leverage into fortunes.

That’s a serious charge, isn’t it?

Looking at a basic configuration on Amazon — mind you, I took numbers out of thin air for this — I put up a “small reserved instance” running year-round, plus a 5% high-CPU activity, threw in some storage and traffic, and came to about $450 a month. That’s $5,400 a year. Remember, you’re getting a full-fledged, albeit non-existent, computer you need to manage. You’re not getting shared space the way you do with a web host, so you’ve still got the maintenance costs to bear.

When you compare it with buying one of these monsters that Jeff Atwood writes about at $17,000 that doesn’t sound so bad — except that you don’t buy it again every year, and the DL785 probably out-performs the “small reserved instance” on Amazon.

So maybe Doctorow is right. Cloud computing might possibly be nothing but hot air – at least until the network infrastructure catches up with computing power in terms of cost and market competition. But for now, I’m keeping my documents on my netbook rather than on the web, because my cell phone company has a 5GB cap on the “unlimited” data plan, and otherwise charges by the megabyte — the pone-minute for the 21st century.

[edit] Of course – there are other matters to take into consideration. The availability, the ability to scale up as needed (is this sort of spiking a real concern for enterprise?), but do these seriously outweigh the costs – the nickel-and-dime method of charging per CPU-cycle?

What do you think? Is cloud computing the way to go, or is it merely the new Virtual Reality? Where does your company stand on this issue?


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4 Responses to “The business of cloud computing”

  1. Avigdor Luttinger Says:

    Excellent post. The assessment of the Enterprise attitude to technology is very relevant in a (virtual) world where the trends are set by attic designs and exploratory stints. Some of these are very cool and attractive, but not always usable and reliable enough for the Enterprise. In this respect, ActionBase walks a fine line, taking the ubiquitous Chat paradigm into the constrained and compliant Enterprise to deliver a cool collaborative experience.

  2. WEB 2.0 and Cloud Computing for the Enterprise « Business Technology and People Says:

    […] I came across a post by Yoni Barel that I liked very much – The business of cloud computing. Yoni works for ActionBase, and has actually crossed over from the Consumer oriented Internet to […]

  3. The Collaboration Explosion – Web Apps Galore | ActionBase Blog - Thoughts on Collaboration Process Management Unstructured Compliance and Audit Says:

    […] in computing terms. On the other hand, it doesn’t look like something that belongs in an Enterprise environment. It’s also not suited for non-project work, such as ad-hoc processes and short-term […]

  4. Aleshia Hutching Says:

    Good Site on Cloud Computing and SaaS – We are periodically looking for good blog information
    related to Cloud Computing. Will be back to review more information on your blog.

    Keep up the great work!


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