Amazon Cloud Cost Comparison Revealed
December 28, 2012
Deep Value, purveyor of respected stock-trading algorithms, is dissatisfied with its Amazon Cloud Services investment. The company’s blog declares, “EC2 is 380% More Expensive than Internal Cluster.” Deep Value was using Amazon’s EC2 cluster with Hadoop to run simulations, but the bill kept increasing month by month. Their managing director of technology, Paul Haefele, says he performed some “back of the envelope” calculations that suggested there was a better way. He writes:
“Tiger Direct will sell you a Seagate 3 terabyte drive for $154. For the same storage on S3 for 2 years, I would pay (1,000 * 0.125 + 2,000 * 0.11) * 12 mths * 2 yrs1 = $8,232 at the standard rates. Buying our own drive was 2% of the cost of using EC2, so this certainly seemed worth investigating.”
Haefele’s team deployed a Hadoop cluster with the data-center company Telx, whose rates they found reasonable. They invested in 20 Linux servers running the open-source CentOS and a couple of switches. They factored in hosting costs, then ran some simulations. See the article for the technical details; Haefele summarizes his conclusions:
“If we compared just on what we are getting in terms of compute and storage, our cluster is costing us $12,700 per month versus $48,564 (33,599+15,965) for EC2.
“EC2 is thus costing us over 3.8 time more per month.
“Whatever way we slice this, either by storage cost or by compute, it seems clear that using your own data center rather than EC2 makes sense for us. For one-off peaks EC2 makes sense, but given the ongoing nature of our simulated analysis, moving to our own datacenter is a very clear winner.”
So, sometimes DIY is worth the effort, as this extreme example shows. Thanks to Deep Value for sharing this important information. I wonder—how many businesses will take advantage of it?
Cynthia Murrell, December 28, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
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2 Responses to “Amazon Cloud Cost Comparison Revealed”
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In your DIY model aren’t you forgetting something pretty important? The cost of internal personnel/support for that data center? Looking strictly at hardware & compute cost doesn’t seem like a complete picture.
The costs of racking up the servers and switches (the costs we don’t have with EC2) is in fact very small compared with the cost of installing OS, Hadoop and managing the cluster. These cluster management (OS+Hadoop) are the same with EC2. We infact don’t actually even visit the datacenter and have remote-hands do all the installation, and these bills are quite small.