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On-Premise Indirect (Hidden) Costs There are a variety of other expenses associated with an on-premise environment considered indirect expenses. These expenses
by oxfordmale 4y ago
On-Premise Indirect (Hidden) Costs
There are a variety of other expenses associated with an on-premise environment considered indirect expenses. These expenses are often referred to as “hidden” expenses due to how often they are overlooked rather than “hidden.” These include:
The real estate of the storage space used for the servers
Tools used for temperature control in the data center
The cost of set up, configuration, and ongoing upgrades
Staff salaries for administrators that maintain an on-premise data center
Networking infrastructure set up and ongoing maintenance
The cost of downtime while the team troubleshoots the issue
Productivity lost when the system experiences downtime
The cost of keeping the servers powered 24/7
Depreciation of the hardware and software
Time spent on disaster recovery
Administrative costs associated beyond IT staff such as HR, purchasing, financing, and other departments.
https://pmsquare.com/analytics-blog/2022/6/9/calculating-on-prem-vs-cloud-costs https://pmsquare.com/analytics-blog/2022/6/9/calculating-on-...
- fidgewidge 4y agoYou speak like clouds never have downtime, or don't charge you for space and power. Look at the article - that one company would needed to have paid more than their entire revenue to AWS for worse hardware. They'd have spent $400M in 3 years on the cloud! There are no "hidden costs" that can even begin to approach a fraction of that. As for staff salaries, lol. It's not like AWS is self administering.
- oxfordmale 4y agoIn the cloud, costs are transparent, as you receive a single monthly bill. When you self-host, there are many hidden expenses you would need to track down (energy, admin, maintenance, etc.) The figures in the article are for illustration purposes only and should be taken with a large pinch of salt. The author doesn't detail what hardware they are running, what EC2 instances he has selected for comparison and how comparable the storage statistics are. I would also love to hear the Finance Department's version of his calculations. AWS is more expensive than self-hosting. However, it is not as skewed as the author claims. Otherwise, very few companies would be using the cloud.
- botsbreeder 4y agoCosts like energy, admin, maintenance were included. The figures for on premise are NOT illustrative but real figures. It is hard to believe how high cloud costs are.
- Nextgrid 4y agoHosting providers such as Hetzner or OVH take care of all of that for you and include it into a fixed, monthly price per server. I however would like to address some of your points which I find absolutely ridiculous: > Staff salaries for administrators that maintain an on-premise data center Every cloud-native company I've been at had an entire team wrangling YAML files around. I'm not exactly sure why they had to do so (because everything was stable and as you say, the cloud is supposed to handle all maintenance/etc for you) but they did and cost a pretty penny. The only case where I genuinely agree that the "cloud" saves money on administration is fully-managed PaaS providers. > The cost of keeping the servers powered 24/7 A non-cloud-based, peak-capacity-sized deployment costs less to run than a cloud-based deployment scaled at minimum capacity. Servers are super fucking cheap nowadays. Hetzner will happily sell you a 16-core, 128GB of RAM, 4TB redundant NVME SSD machine with 20TB of included external bandwidth for ~150 bucks a month. AWS will cost more than that on bandwidth alone.
- pkphilip 4y agoTrue. Also, the devops salaries are much higher than hiring a system admin to watch over your servers.