NetRiver provides both colocation and cloud computing services. Often, the decision to colocate or adopt a cloud based strategy comes down to a myriad of decision drivers. As a provider in both regards we make it our aim to educate the customer about their decision as a part of the consultative sales approach.
Cloud Computing Explained:
Cloud or Hybrid computing is the concept of segmenting a companies IT infrastructure between traditional hosting/colocation services and cloud based platforms based on computing usage profiles.
Cloud based platforms offer an on demand billing methodology for computing and storage needs. This method works considerably well when usage is volatile, temporary, or seasonal, and where companies don’t know their projected needs. Depending on usage patterns either cloud or colocation services can be more cost effective. Consider the following example:
Cost of cloud computing services = 2 times cost of colocation on a per compute unit basis*** 1 Unit of CPU costs $1.00 per day.
You can see this company is using an average of 4.71 CPU instances per day (33 units consumed/7 days). The cost for using cloud services over this time frame would be:
4.71 (average usage per day) x $2.00 (cost per unit of CPU) x 7 (days) or $65.94 per week.
The cost for using a colocated alternative would be based on the highest amount of CPU instances needed. This is the idle computing inventory the company would need to maintain to handle peak demand: In this case, it would be cheaper to collocate. However, the company could reduce its expenses even further were it to use colocation for its more known fixed usage and cloud compute instances for peak traffic hours. Suppose we chose to use colocation for 5 of the CPU instances and let cloud computing pick up any usage past this point. This is illustrated by the red-line in the below graph: Calculating the total cost would now involve finding the costs for both service types. Five colocated CPU instances for the week would cost:
5 CPU instances x 7 days or $35 per week.
Now we need to add the CPU usage above the red line; 3+1 = 4 instances, to determine the cloud computing costs for this time interval:
4 (CPU instances used) x $2.00 (cost per CPU instance) or $8.00 per week.
TOTAL COST FOR HYBRID SOLUTION:
$35.00 + $8.00 or $43.00 per week 8 (CPU instances per day) x $1.00 (cost per unit of CPU) x 7 (days) or $56.00 per week.
This illustration shows the efficiencies that can be gained by segmenting the cost structure between fixed and variable usage patterns. There are a myriad of cost drivers that can come into play within a particular organizations decision criteria. Financial constraints related to OPEX and CAPX are key drivers along with security concerns, and bandwidth/transportation costs. The NetRiver hybrid compute solution brings together a premier colocation offering with industry leading Amazon cloud based services. NetRiver offers a direct connection into the Amazon S3 cloud allowing a faster transport connection at a reduced pricing structure.
Contact our sales team for more information.