The Pros and Cons of Cloud Computing

Several years ago, a new buzzword entered the fray of internet speak: The Cloud. In the past, I’ve written critically about cloud computing, and my reservations originally outlined remain. However, there is real value in the cloud as well.

Known for applications that are considered “Software as a Service”, or SaaS, The Cloud represents the idea that data processing and storage exists, not on physical hardware maintained by an organization or their designated controlled environment data center, but literally out on the internet. The data and processing is harnessed by the power of distributed computing across grids and data centers. The power of multiple hundreds of thousands of server farms can much more effectively manage the processing power of a service, application or company far better than a single server or node of servers. In fact, economically, cloud computing is far cheaper than traditional computing paradigms.

In an enterprise sense, cloud computing is often handled by Content Delivery Networks (CDNs) such as Limelight, Panther or Akamai. These enterprise solutions run as cheap as $0.25/Gb of bandwidth/transfer to $1.00/Gb. Other lower cost solutions include Amazon’s EC2 or Google AppEngine (which now supports Java in addition to it’s longstanding Python commitment).

Companies looking to expand their offerings with web apps, downloadable materials or provide a service relying heavily on rich media (images, video [especially HD video], or streaming audio) might consider the Cloud as a viable scaling solution. In my opinion, based on my experiences, there are benefits and drawbacks to the Cloud.

Benefits of the Cloud

Cloud computing is cheap. Dirt cheap. If you’re scaling up an application – that is active growth projections and model, not simply a prototype – Amazon EC2 will give you computing power for as little as 10 cents an hour, and time is measured only when the cloud is actually working on behalf of a user, so if it’s idling you’re in the clear. In addition, at 10 cents per gigabyte of bandwidth, it’s extremely cheap to begin a large scale growth projection.

A secondary benefit of using the cloud is your ability to fire your IT staff. Within reason, of course. The absence of physical hardware and infrastructure security requirements allows your company to devote more resources to the development of your technology product, as opposed to positioning watchmen on the wall, so to speak.

Thirdly, the cloud is infinitely scalable. It is not necessary to worry about clustering, nodes, GeoIP content serving (that is, serving content from a UK-based data center to a user in Germany as opposed to serving from Southeast Asia, as an example). Simply put, the Cloud allows you to build as much capacity and bandwidth as you’re willing to pay for.

Drawbacks of the Cloud

Of course, since there is no such thing as a free lunch, there are also detractors to leveraging the cloud. In a siloed environment of physical hardware and CAT-5 cabling across server closets, it is possible to scale by diversifying the vendors and hardware and data centers. From a business perspective, this means you can work one vendor against another and possibly incite a bidding war. You could use all or none of the vendors that might show interest. In the cloud, it is difficult, if not impossible, to choose 2 different CDN providers in addition to Amazon EC2, for instance. Tim Bray wrote a piece about this last year and raises significant, yet important, questions.

Secondarily, especially for cheaper solutions like Amazon S3 (different from EC2 in that it is simply a storage facility in the cloud), you have a high chance of latency. Simply put, the network connection is not fast enough to be able to rely on to serve rich media at scale. Many services out there, including opt to use Amazon S3 as a “cold cache” – that is, the last place that content is served from and then only if needed. The latency of the network makes it prohibitive, depending on the application, to do it on every page load.

Finally, Cloud reliance can cause significant problems if the control of downtime and outages is removed from your control. Over the past year, Amazon has had significant downtime incidents (8 hours in one case!). Reliance on the cloud can cause real problems when time is money.

In the past, we have advocated for a hybrid solution to cloud computing. It is perfectly okay and reasonable (even expected!) for companies to leverage the cloud. Economically, it allows them to go crazy at building the business and focusing resources. In a down economy, the economics behind the Cloud over physical hardware is a no-brainer. However, we continue to advocate for a failover plan that will help an agile company dodge the effects of downtime. A hybrid environment is also attractive as well, allowing companies to directly manage and control critical operational systems and benefit from the infinite possibilities of scale.

11 Replies to “The Pros and Cons of Cloud Computing”

  1. I still have yet to see a definitive comparison of the cost of Cloud vs. Traditional hosting services. Traditional hosting gives you a pretty large bandwidth allocation that’s “built-in” to the cost.

    I also want to note that I thought Amazon’s Cloudfront was specifically designed to eliminate network latency and was a perfect place for a CDN.

    1. Hello Bill,

      This is a question that I have been working to answer as well, and it has been asked of me many times. One fairly detailed outline of this (though the author seems to weigh heavy to in-house side) can be found here:

      As I mentioned, I am working on putting together a paper that will try to compare in-house, to traditional hosting, true cloud.

      And on the Cloudfront item you are spot on. The time to first byte with S3 is almost unusable for most applications were cloudfront has doe a great job, and according to some reviews I have read, and is easy to implement.

      1. Marc, thanks for the link. Interesting stuff. I wonder how hard it would be to load balance traditional non-cloud resources such that they start using the cloud when demand really spikes.

        1. Bill, I don’t want to hijack this tread (too much), though there is some great comments going on here!, but this is certainty possible, and often easy depending on where your “traditional” servers are located.

  2. When I previously offered website hosting services I used both services. For larger companies it can definitely be more cost effective that need to save money on large amounts of bandwidth – however I personally prefer the simplicity of normal solutions.

  3. I use Amazon S3 – pretty cost effecient if you backup under 10TB. if you compare annual cost of storing 10TB of data on Amazon S3 with the cost of external hard drive of the same size, i think you might want to consider the latter. I have my own freeware tool for Amazon S3 if you want to check it out.

  4. I am currently weighing up the advantages of Mosso Cloud Servers (optional backend Rackspace dedicated boxes for DBs) combined with SimpleCDN Stomfront for free users, and Hurricane for private content.
    Amazon is too expensive ;)

    1. Andy, if you are looking at using Mosso, why not consider their cloudfiles service? They have partnered with Limelight Networks, so they have a kick butt CDN and it is priced very well.

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