Saving 70% Per Month In The Cloud

I need to add an FTP server to my environment, and as I sit here and struggle with how I'm going to do that and stay under my annual budget, it occurs to me that the cloud isn't a bad option anymore. The savings are pretty compelling, in fact; read on for a quick and dirty cost analysis.So as I usually do when I need a new server, I spec out a standard 1U HP DL 360. For this particular FTP server, I don't actually need much disk, and I really don't need any disk fault tolerance. I just need the data backed up. Cost is the overriding concern.

OK, so now for the cost comparison. According to a couple of the larger online resellers (CDW, PC Connection), the cheapest DL 360 available with a little bit of disk and a service contract comes to around $2,500. To keep costs down further I'll load some flavor of Linux on the box and run whatever FTP server is prepackaged. Assuming I go the onsite server route, I'm going to add a couple hundred dollars a month to my operating budget, because now I have to manage another server, back it up, provide power and rack space, and do firmware/BIOS updates periodically. Assuming a $50/hr resource bills me for four hours a month, a reasonable assumption, then $200/month seems fair for onsite server management and maintenance. I'll also add $50 per month for backups for this server. If you consider licensing, management and storage/media costs, $50 per month is a fair number. That brings my total upfront capital required to $2,500, and ongoing operational costs to around $250 per month, or around $3,000 per year. Over the four-year life of the server, the total cost of ownership should be around $15K, because I'll need to add an extended warranty at the end of Year 3 to cover me in Year 4.

Now, let's compare the onsite server option to a virtualized cloud server from one of the big players in the hosted cloud server space, Rackspace. One of the things I love about Rackspace is that their pricing is right out there for the world to see, a pretty smart move marketing wise. With a virtualized cloud server, I'm shifting all of my upfront capital to monthly operational costs, and most of my onsite server maintenance costs go away. All I'm left with are monthly fees to operate the server, some server management costs to maintain the box, and the cost require to do backups. According to Rackspace, a 2GB server with 80GB of RAM, which is comparable to what I was specing via the HP DL 360, is $87.60 per month. Rackspace says backups will soon cost 15 cents per GB. Assuming I'm backing up all 80GB that Rackspace is making available with its 2GB of RAM server package, the monthly backup cost will be $115 per year.

I try to meet my budget on a per month basis. So let me break down the operational cost that way:

For the onsite server option, dividing the $15,000 TCO by 4 years, and then by 12 months, I get a total TCO per month of $312.50. Assuming my Rackspace costs stay the same over the same 4 year period, my monthly costs for the cloud are $87.60 + 9.60 for backups, or around $97 per month.

That's around a 70% savings by my math.

Now, I'm not advocating for cloud server vendors, but if you multiply those savings by x number of servers, then you're talking about some serious savings. Personally, I'm not quite ready to put all my stuff in the cloud, but for a niche need like a departmental FTP server, I'm willing to try it. If it works, I'll try it again. There's one thing I can't deny, Rackspace's data center is much more highly available than mine. So for 70% less, I also get a more highly available FTP server. Not bad.

If you're doing a ton of production server virtualization in the cloud, I would love to hear from you about your experience. Reply to the thread here and let us know the good, bad and ugly.