There are many reasons why organizations opt for public clouds, but cost is becoming less of a factor. A new survey published by 451 Research on behalf of VMware shows that 41 percent of 150 IT decision-makers surveyed claimed to be operating their own private clouds at lower unit costs than a public cloud service. In fact, 9 percent said they’re saving at least 50 percent on total cost of ownership by using private cloud instead of public cloud. An additional 24 percent of the respondents said they’re paying less than a 10 percent premium for their private cloud versus employing a public cloud.
In general, 451 Research estimates that the crossover point where the total cost of ownership for a public cloud exceeds a private cloud is at about 400 virtual machines. Of course, once an organization reaches that point it’s not like they will magically transport all those virtual machines to a private cloud running on a local server. Beyond the cost of migrating those workloads, it’s not a simple task to take a workload running on, for example, a virtual machine hosted on Amazon Web Services (AWS) and host it on a VMware virtual machine.
More efficient data centers
But the study does illustrate how much more efficient local data centers have become. Thanks to new classes of servers employing multicore processors from Intel and advanced capacity planning tools, the utilization rates of local servers have significantly improved. In addition, IT automation frameworks have significantly reduced the total cost of labor per virtual machine deployed. Those costs are only going to be driven lower as IT organizations embrace container technologies such as Docker that will drive server utilization rates exponentially higher. In many container scenarios, there might not even be a need for a virtual machine. It’s now possible to deploy hundreds of containers on a bare metal server.
The rise of software-defined data centers (SDDCs) will also serve to make those local servers much easier to provision. Today it’s much easier for a developer to invoke an application programming interface (API) to spin up virtual machines on a public cloud. But many IT organizations are embracing SDDCs to provide that same level of flexibility.
Parity with public clouds
There may come a day when cloud service providers respond to that SDDC advance by dropping the cost of their services. But, it’s probable the cost of deploying and managing local servers will also continue to decline. A new generation of NVMe-based servers is already starting to become available that change data center economics by substantially increasing the number of workloads that can be deployed per physical server.
As the differences in cost and agility continue to narrow, parity between public clouds and local private clouds is being achieved. That doesn’t mean public clouds will go away anytime soon, though. In fact, hybrid cloud computing will become the de facto standard in most IT organizations. That’s good news for MSPs because the more distributed an IT environment becomes, the more likely it is that the organization will need to engage their expertise.
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