Which is less expensive: Amazon or self-hosted? The start-up angle

I read today a wonderful article about AWS (iaas) vs self hosted solution , the pros and cons money wise.

Couple of points regarding the discussion that relates directly to startups:

  1. The author recommends for spiky/unknown/unproven loads to stay with the public cloud,later in the comments he adds: “ …let’s the the situation of an early-stage business. While I’ve referred to “spiky” loads, there’s another way to say that which is “variable”, “unknown” or “unproven” loads which describes the situation that a startup usually finds itself in. In those cases, the fact that you cannot forecast very well is the reason why it’s unlikely you’ll save money by self-hosting…because you’re very unlikely to buy the right amount of capacity.
  2. He is talking here mainly about infrastructure as a service (iaas), one major point that I think he overlooked here is that many startups don’t want to deal with the provisioning and machine preparations (you still have to do that under iaas), we want to be lean and quick to market, I would prefer to pay more money for platform as a service (paas like app engine) and deal with writing the actual business logic.
  3. Disaster recovery is also important, the ability to spread your machine across several geographical areas is costly.
  4. No matter how you’ll look at it, there is a good chance that as a startup you’ll use cloud api for your business, there are so many services today that cuts down your dev time and are only available as public api on the cloud. A good example might be google analytics. So you can’t really escape it.
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3 responses to “Which is less expensive: Amazon or self-hosted? The start-up angle

  1. You may want to look at PAAS vs. IAAS also from the perspective of your company strategy. If you think that selling your company to another company for a merger is an option, then you should be careful with environments that lock you in. A typical question during a Merger & Acquisition due diligence is: How easy can this technical platform be integrated into our existing infrastructure.
    You should also think about your target customers: Are they corporate customers or consumers? Where are they located? Not everyone trusts every big player in the web.
    Don’t underestimate the costs for PAAS or IAAS services. The entry is often free or very cheap. They will soon become quite expensive as the traffic, the transactions, and the stored data grows. With the growing number of users and stored data it becomes almost impossible to change direction.

  2. If you are a startup deploying a web service, your real concern should be planning how your data store will scale. Everything else is personal taste.

    Of course choosing a scalable data store is a matter of taste as well. MySQL, PostgreSQL, MongoDB, Cassandra, Riak, Google App Engine’s NoSQL data store. They all have their own fan bases. Your best bet is to search for how each platform provider has solved common scaling issues for each solution they provide, Google included. It’s all about tradeoffs, and every IAAS / PAAS company makes tradeoff decisions based on what works for them.

    • It’s not only a personal taste, App Engine for example lacks specific backend features (sockets for example) that that are required by specific projects. If for example you want to send push messages to an ios device then you are out of luck when using App Engine.

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