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I'm wondering why would people choose to go for cloud with budget about $50 a month for only about 1-2 cores of CPU power..

I am currently 16 Cores Shared CPU VPS with 512MB of memory. I'm thinking to upgrade to cloud, but it seems not worth it for me as it costs more, and lower spec (2 Cores and about the amount of RAM)

Please tell me the reasons why people are going for cloud service like RackspaceCloud, EC2, etc..?

Thank You

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closed as off topic by Zoredache, Scott Pack, John Gardeniers, Jason Berg, Chris S Feb 9 '11 at 17:56

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Would you mind letting me look at the 16 core vps you mention please, I feel there's a misunderstanding or misrepresentation at hand. –  Chopper3 Feb 8 '11 at 21:01
    
My guess is that he is on a machine with 16 cores, but only has 512 MB of memory. Sounds like Linux VServer vs. Xen. –  darthcoder Feb 9 '11 at 3:43

2 Answers 2

up vote 4 down vote accepted

In datacenter-grade equipment, you're looking at at least $1000/core currently, with large memories. Which is a pretty damn good price, IMHO.

But the problem is that of capitalization. A lot of that is underutilized, even using tools like Surgient or VMware/LabManager. So you move to the cloud on-demand. Have a huge process that needs to run for 3 days at the end of every month? Deploy it to the cloud. $10. Versus $10,000 for having a server sitting around doing nothing for 25-28 days a month losing money.

The time-value of money is what drives people to the Cloud. It may cost more in the long run, but can you get more for the dollar you have now, versus the dollar you MIGHT have then?

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$1,000/core? $1,000 per processor, perhaps (though that's probably a bit low), but $1,000 per core is ridiculous. A 5520 is $400 or thereabouts and provides four cores, plus four HT "cores". You can certainly build a dual-5520 box for $8k, but it's going to be absolutely massive (or seriously overcosted). –  BMDan Feb 8 '11 at 20:45
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Notice "datacenter-grade?" Ok, I just priced out a Dell R810 for $10,500 with 2x X6550. So closer to $650 per core. White-boxed machines wasn't what I was considering. –  darthcoder Feb 8 '11 at 23:50
    
And when you add in "large memories", you get much closer to my $1000/core (or higher). AWS/Cloud is never going to compete with actual capital expenditures on a 1-to-1 basis, but in on-demand usage or poorly utilized resources cloud has an advantage. –  darthcoder Feb 8 '11 at 23:56
    
@darthcoder: these prices are not for the hardware but for the service. if you want just the hardware, you'll get 'datacenter-grade' for much lower prices (and usually better quality than dell/hp) –  Javier Feb 9 '11 at 1:47
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@Javier, considering most of us are concerned with the whole package (hardware, support, warranties, SLA, compatibility, etc) HP, Dell, IBM, etc are almost always the cheapest way to go. If you just want random bits and pieces, sure you can kludge something together. –  Chris S Feb 9 '11 at 17:59

Because they have a services that will not be always on? Cloud providers allow you to dynamically add servers during heavy load.

If your load doesn't fluctuate a lot or can be handled by a single server, then the cloud is probably not for you.

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