on-demand pricing is bullshit
I worked at a company that had a dedicated web server for various web applications they produced for customers. They paid £250/month for it and got well over that in revenue from clients as the hosting cost of their applications. There was nothing wrong with it.
The company knew that the spec of the server was in excess of what they needed. Some (young, inexperienced) "DevOps guru" came in and told them that they could use cloud hosting and save £££
Let me illustrate the problem:
- The previous dedicated server had a fixed, known cost. It was always £3000 per year (250 x 12)
- The cloud server started with an "amazing" monthly price of about £60 in the initial month. Management thought wow, we've saved over £2000 a year since this new one will only cost us £720/year (60 x 12)
- yes, APART FROM..... as they added more applications, the £60/month went up. They never knew what it would be since the calculator for said host seemed to pick numbers out of thin air
- The company charged around £150/hour for development. They spent - no word of a lie - around 70-80 hours moving stuff from one host to another and learning about the new infrastructure. Given their hourly rate the "cost" of this to the company was £12k.
End result: they spent a minimum of around £13k in one year, when something they had previously that was perfectly suited cost them a fixed price of £3k.
If they'd have gone as far as employing a consultant to tell them this, said consultant would have been laughing all the way to the bank!
Good businesses need to know their costs. Having fixed costs is actually good because everyone knows where their stand. The idea that you can "save" with cloud tech simply isn't true for most people especially because no cloud provider factors in the transition cost. If you add in the cost of your FinOps consultant...well...