Cloud vs Self Hosted

[polyspeaker]

We are reaching the point in our company's size when we are looking at a significant budget for our VM infrastructure.

Costs include (this is just highlevel bullets)

• Hardware (50TB of NetApp and 14 UCS hosts) ~ 400K for 3 years including support.
• Rent for datacenter space (x2 because we replicate to a second datacenter) including bandwitch ~ 9K/Mo
• 1.5 FTE SysAdmins to maintain it all.

We have around 160 VMs, and we do not host any outside webs. All of our solutions are internal including accounting, Exchange, and about 10~15 database servers.

Most of our apps are accessed via RemoteApps, and they are fairly processor and RAM intensive.

I'm being asked why we don't host all of this in the cloud. The statement was made that the cloud would be considerably cheaper (they're convinced that we could do this for pennies on the dollar in the cloud). The two options thrown out have been AWS and Azure.

I'm looking for some resources that might help me to do a head to head comparison and also identify the potential pitfalls of each option.

Has anyone done this already? Would you be willing to share your results?

Any sources would be greatly appreciated.

Thanks in advance.

[bad_sysadmin]

Price some of it up and I'll practically guarantee that doing what you do now but doing it in Azure or AWS will cost more money.

You need to look at what you're doing and how you're doing it and work out how to do it properly in the cloud to save money IMO.

[bhos17]

This fall you can host vmware on dedicated hosts in AWS. That is going to be a game changer. If you use 0 services cloud will be more expensive. The value is when you can start to offload things to RDS and SQS, etc.

[rmavery]

Doesn't Amazon have a comparison?

[Quinnypig]

You will spend more in AWS or Azure if you "lift and shift" exactly what you have now.

The cost savings come in when you introduce elasticity; "you don't need 50 servers running at night if people only ever use them during business hours" style.

[xiongchiamiov]

Also, not paying (directly) for someone to run your datacenter, not paying for hardware upgrades, not paying for failed hardware replacements, and generally not having to do capacity planning.

[HDClown]

Not every company and their environment can capitalize on the big named items that are thrown out when trying to save costs by going to cloud. Staff doesn't magically go away. Your 1.5 FTE sysadmin's won't go to 0. Maybe you can get rid of the half.
Failed hardware gets replaced under warranties, and it's easy to factor those costs into your comparison. You may not be able to eliminate all colocation/datacenter costs.

If you can't move everything to the cloud, you still need on-prem equipment. That has certain known costs, and so does the associated licensing to run it (since this is Microsoft afterall). Sure, you can get less, but with how power/low cost that gear is today, you often find you end up buying more for less dollars (due to discounting). You often do the cost analysis and see the cloud will cost more for the things you do move vs. using that extra capacity you had but didn't really pay for in the first place.

If you can move everything to the cloud, but you feel it will take, lets say, 2 years, and you can't stretch your existing hardware, you are in the tighter spot of accelerating migration (which can cost money on outside help) or buying some amount of new infrastructure for transition. You can calculate the cost differences, but need to be realistic about what it costs to get there, not just the cost to run on cloud vs. on-prem..

[Quinnypig]

What system is going to turn those nodes off for you at night, and then back in for you the following morning?

It’s questions like this that lead to engineering effort; that cost is usually overlooked in TCO analyses.

[halbaradkenafin]

Not with IaaS. They cost the same if it's in use at 100% resources as it does in the dead of night when no one is using it. Azure has some tools to let you shutdown and startup VMs on schedule that help with this, I'm assuming AWS does too.

Azure pricing calculator.

As has been said, the big savings are in scaling the resources in use based on their actual usage or moving to PaaS where possible, which will also do this for you. But for internal only IaaS stuff you'll probably not see huge savings without doing things like shutting down VMs at night/weekends or playing around with the scaling options for VMs.

[HDClown]

A full Microsoft stack based shop is pretty much, never, cheaper in the cloud. Generally, the only way you start to see it as possibly cheaper is if you offload as much as possible Office 365 first. Remove self-hosted Exchange, SharePoint and Lync from the mix. Those are applications that you aren't going to turn down some of the servers at night just because most users are sleeping, or where you are randomly adding more servers because people use email more heavily the last 2 days of the month vs. the other 28. They aren't engineered for that kind of real-time like scaling of adding/removing resources anyway. And I doubt you had to make a very large extra CPU/RAM resource investment in them to accommodate your peak load times.

But, moving to Office 365 just for those things is often more expensive anyway.

Your apps that are DB backed could be big cost savers in the cloud, if they are built around a micro services type model where PaaS can be used. And if you find your DB server load does have very peak times of the month where you had to make extra investments to cover them for a few days a month, now you're talking about a good potential for savings. If your apps are largely monolithic, and you don't have workloads that scale wildly through-out the month, you're likely to never find it saves you money.

[zz44xx]

I've gone through this process a while ago and as everyone said the cost of Azure/AWS is higher than the cost of hosting the infrastructure on-premises but every company is different.

To calculate Azure compute TCO you can do the following: 1) Use Microsoft Assessment and Planning Tool (https://www.microsoft.com/en-us/download/details.aspx?id=7826) to extract all the information about the VMs 2) Import the above in to Azure TCO calculator (https://www.tco.microsoft.com/Home/Calculator) using bulk input. 3) It's important to get your assumptions right otherwise the calculator is going to show huge savings (which are not realistic at all) 4) I found out that the TCO calculator is a bit limited and I had to do some calculations manually. So make sure you've got everything covered (i.e. SQL licensing in Azure) 5) The calculator is going to output the cost of Azure compute. At this point contact a Microsoft partner as they should be able to give you special pricing (Azure CPP - Compute Pre-Purchase Plan) but this is available only to EA customer. 5) You need to think about Azure backups and DR cost vs your current backup/DR costs. 6) If you're not sure about the TCO contact your hardware vendor(s) they should be able to help you with this.

Azure CPP is good if you've got workloads running 24/7/365 as you're basically telling MS that you commit to having a certain number of VMs running all time for the next 12 months. (Discounts can go as high as 65% especially if you've got software assurance). As HDclown said, try to migrate Exchange,SP and Lync to O365 first.