Totally disagree with that. Humans are expensive. Cabling, configuring, training, ordering and replacing hardware, that all takes time. Over a period of 3 years, there's a high chance that you'll end up having, depending on your luck, at least a few dozen days used up by those tasks. Assuming you're not paying peanuts for your contractors, this will easily get to the $10k or over.
Unfortunately I don't have exact numbers, having never been responsible for the budget of those. This is only an estimation considering the pricing I see from the cloud providers, and the rates I know from my fellow contractors.
Besides, I'm not exactly trying to win a war here. Simply trying to know under which circumstances it is better to go for on-prem vs public cloud.
I too think there is no one winner here. There are some cases where going with an IAAS makes a ton of sense. From the top of my mind,
1. Scale up/down - you can say turn off servers off season/nights and spin up only when needed.
2. Your business is not big enough to hire a person for Ops.
3. You don’t have the space for a server room/ unwilling to take the burden of dealing with a co-location provider and are willing to pay through the nose for that choice.
4. Your devs are okay with doing Ops (managing server resources on AWS is still Ops. You still need sense of firewalls, DNS, backups, updates, change management etc)
5. Ownership vs Operation : if a business is not sure they will sustain that amount of resource needs long enough to buy hardware. Buying reserved instances on Amazon comes to mind as opportunities that could have been better as a co located servers.
6. Geography - At times you need geographical spread (CDN, or multiple office/customer locations)
IMO, unless you can find yourself one such justification for the extra costs, you should consider self hosted or atleast collocated servers. At least this is what I tell my friends in the business who seek advice on infrastructure.
If you already have a IT team which needs to handle 100+ Linux&Windows desktops systems, 40+ Laptops, WIFI network switches and firewall for all this as well as a few conference rooms and a few servers for local storage/backups(1) and similar. Then adding a small number servers isn't changing much in the workload for
the IT. ;=)
(1): Available even if internet is down.
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Also frequently doing most scientific computing tasks are _much_ cheaper on-premise (if you have space for it). Especially given that some have setups like multiple terabyte of RAM.
