Charlie Oppenheimer recently published a blog titled Which is less expensive: Amazone or Self-hosted? This very well written and thought out blog has been getting a lot of attention so I thought I would share it here on my blog and of course, add my 2 cents.
1. Labor costs – He leaves them out in this comparison for simplicity sake. While I agree this is a fixed cost, I want to point out that this cost is definitely not even on both sides so it’s very difficult to omit this from both sides of the comparison. Trying to compute this cost is extremely difficult as there are so many factors involved. Make an assumption that the fixed cost could me much higher on the self hosting side.
2. Spiky Traffic – Charlie mentions how this comparison is for a company that is further along and traffic is predictable. If you’re a startup you should be using the cloud since it’s less expensive (with labor) and can much better accomodiate spiky traffic. If your traffic is very spiky, you should seriously consider putting a CDN infront of this to cut down on the traffic served from your origin and allow you to be more scalable.
New Startups – Start in the cloud, Amazon or Rackspace is a great starting point. Put a free CDN like CloudFlare in front of it to handle basic caching and basic security.
Growing Startups – Stay in the cloud but bring in a CDN that can handle a bigger load and delivery your dynamic pages, I would recommend Edgecast or Akamai.
Established companies – Your traffic is for the most part predictable and at this point you prob have a full time IT staff so moving to a hybrid model is ideal. What I mean by hybrid is be self hosted but use a cloud player like Akamai to help deliver your content and sites very fast locally and globally. Akamai can provide some serious offload to your infrastructure and allow you to scale for traffic spikes. Akamai can also provide security against DDoS and web application attacks.