I think the fallacy in you comment is that you think about storage as it was not using energy and network. If add those costs to the bill, are you sure that you are still cheaper? On the other hand, I much rather pay a monthly fee that I can turn off if things go sideways, than buy extremely expensive gear that I cannot get rid off at all.
Just to summarize:
- monthly cost is almost all the time better for small businesses
- your security is way worse than Amazon's
- the overall cost of your operation has to include electricity and network for the complete comparison
My experience is that companies rarely need expensive network storage gear and most of the time it is better for everybody to split up the problem and make it horizontally scalable. There are also other solutions, using distributed storage engines running on commodity HW. Having said that, there are quite few companies out there with SAN/NAS solutions, because this is what traditional computer vendors were selling for a long time. I think by time we are going to see more horizontally scalable storage solutions going forward.
Amazon's bandwidth rates are more than 10 times what we can get locally, and power is included in our colo rental fees. I'm assuming that will pretty much be the situation for mrmondo too.
In terms of monthly costs, all the gear I deal with is lease to own: We pay less per month when the servers are new, and 3 years down the line our bills drop. There's no reason to have large capital expenditures just because you want your own gear.
As for security, it's not really that simple. Amazon's physical security may be top notch, and their patching for Xen and network security may be just fine, but beyond that you're pretty much on your own with Amazon just as you are with your own gear. You still need to understand how to configure firewall settings, and understand how to keep your VMs secure. Amazon's security needs to be top notch because it adds an additional layer that you don't have direct control over, but that does not provide any additional security that you would not have in most reasonable colo facilities where the physical network devices past the service providers network drop is totally in your control, in a locked environment.
> My experience is that companies rarely need expensive network storage gear
The thing is, this gear isn't expensive. For about $250/month I can lease to own a 2TB PCIe SSD delivering 2.8GB/s read, 1.9GB/s write, 450k read and 150k write IOPS. That's in the UK, with 20% VAT, and without shopping around. Or if I want something with the performance profile of Amazons new offering, I can pay $25/month. Amazons cheapest EBS offerings, which are nowhere near what this article about, costs $200/month for 2TB space. Go for provisioned IOPS and the EBS cost skyrockets.
AWS is the expensive network storage option, not leasing your own.
I can lease servers to put it in to get me "free" compute capacity for the difference in cost of the raw storage and still have money left over after spares and hosting/power.
Factor in bandwidth and it gets downright comical - Amazons bandwidth prices are so totally out of whack that where for managed/colo setups CDN is an expense, for AWS setups a good CDN can save you vast amounts of money by cutting your bandwidth charges. And that's without discounted rates. Start putting decent volumes through and host at a carrier neutral facility and paying even 1/20'th for bandwidth vs. AWS is well within reach with peering arrangements and a good mix of transit providers.
I was going to reply to the parent comment but you've summarised exactly what I would have said - sounds like you've done your research and come to similar conclusions to us as well.
http://aws.amazon.com/compliance/
I think the fallacy in you comment is that you think about storage as it was not using energy and network. If add those costs to the bill, are you sure that you are still cheaper? On the other hand, I much rather pay a monthly fee that I can turn off if things go sideways, than buy extremely expensive gear that I cannot get rid off at all.
Just to summarize:
- monthly cost is almost all the time better for small businesses - your security is way worse than Amazon's - the overall cost of your operation has to include electricity and network for the complete comparison
My experience is that companies rarely need expensive network storage gear and most of the time it is better for everybody to split up the problem and make it horizontally scalable. There are also other solutions, using distributed storage engines running on commodity HW. Having said that, there are quite few companies out there with SAN/NAS solutions, because this is what traditional computer vendors were selling for a long time. I think by time we are going to see more horizontally scalable storage solutions going forward.