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Dropbox, in its S1-statement last Friday, showed it reduced its operating costs by nearly 75 million over the next two years by moving storage away from Amazon onto its own infrastructure. Cost savings are only one part of why moving away from cloud storage can be beneficial, but it is a significant driver.

When this company finds out that a well understood compute and storage problem is more cheaply solved on their own infrastructure rather than a public cloud, any business leader should wonder about their own needs and what is cost-effective. Indeed, unpredictable, quick moving and irregular needs offer an area where public clouds have large benefits. But the bigger an organization grows, the deeper its understanding of what drives its compute needs and the more cost-effective it becomes to host those in-house.

The picture this paints is one that shows the much heralded cost benefits of cloud computing to be not as certain as some thought. While some workloads, especially those that are very variable and unpredictable, most certainly benefit from being executed on the infrastructure of big players like Google, Amazon and Microsoft, others don’t provide much of a cost benefit and, more importantly, create security and compliance risks. A thorough analysis of costs, benefits and risks is crucial to determine what the right choice is.

Paul Ciano

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