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Database in the Cloud is Like a Spouse Without the In-Laws

In this article I want to make a simple business case for small to medium size business owners to consider moving their databases to the cloud. Chances are, you have some type of IT infrastructure that helps you run your business. If that's not the case, you have a whole set of other issues that we won't discuss here :-)

Assuming you do have your in-house IT infrastructure and one of the key elements of this infrastructure is a database running on some hardware. You may have already been told by your IT professional(s) to move your infrastructure to the cloud. That is probably good advice but I don't think anyone should blindly make a blanket statement so in this article, I'll keep my focus on your database -- more precisely your data.

As a business owner/executive, your real concern is your corporate data. Period. Not the database or any hardware or software that may be required to make your data useful to your business.

To be perfectly honest, at the risk of sounding a bit crude, I see all the hardware and software required to make use of your data, kind of like the in-laws that came with your spouse. Given the option, I suspect some people may opt only for the spouse without the in-laws. There are, of course, those who treasure their relationship with their in-laws which is the best case scenario. My intention is only to get your attention with a tongue-in-cheek analogy.

Making use of your corporate data is kind of like this situation where in order to get the functionality you needed, you had to also get the database software, the operating system and the server hardware. Without these underlying components, you couldn't manage your data. Or could you?

What if, you could have the database functionality, without the database or the hardware or the operating system or the electric bills to run and keep those servers cool or the additional memory you need to purchase every once in a while or the pesky hard drive replacements, upgrades, worse yet, data recovery fees you need to fork out in case of serious failures and on and on...

A database in the cloud is exactly that! Kind of like, no in-laws!

What's interesting is that it may actually be cheaper to keep your database in the cloud. My personal favorite cloud platform is Microsoft Azure so I wanted to put together some numbers to see what makes more sense.

Hardware Cost

First, you purchase or lease a server. Everyone, especially your IT staff and accountant know that hardware depreciates very quickly from the moment you receive delivery of it. This is true of regular computers as well as servers. As newer, faster and more reliable hardware get released every year, the older models lose their value faster and faster. Typically, you're investing somewhere around $1,250 to $3,500 on the hardware alone.

Electricity Cost

You then need to run this hardware and keep it cool for it to function properly so you're spending money every month in your electric bill. Let's see how much this would be.

Most servers come with one or two 250W to 350W power supplies. Let's say, in average your server is consuming 400W of electricity per hour. Because you keep your servers running 24 x 7 x 365, one server's monthly electric consumption comes to:

400 x 24 x 30 = 288 kWh

According to ElectricChoice website, the average cost of electricity in the United States is around 9 cents per kWh. This means, you're spending 288 x 9 / 100 = $25.92 per month on electricity cost alone. This doesn't even take any type of cooling expenses into account. It's conceivable to think that each server probably costs about $35-$50 per month, depending on server type and local cost of electricity.

Server Maintenance + Software Update Costs

This is probably the hardest to calculate because most small to medium size businesses have a network administrator who is in charge of maintaining the IT infrastructure and possibly providing support to end users. So, it's difficult to quantify the cost of maintaining a single server, especially with such varying compensation rates around the country.

Nevertheless, anyone who's ever experienced a situation when a mission critical server -- such as your database server -- went down for hours and your IT staff had to work after hours to get things back up and running again knows that in that situation, money is no object. You may have even spent money to get support from the hardware or software vendors. When this happens, it's a very costly event and not a fun one either. So, it's hard to place an actual dollar value on this but even harder to estimate the emotional cost.

Software updates is another sore subject for most. Sometime you pay for it, sometimes it's free, Either way, someone is babysitting that process. Not to mention those times when the software update created a whole new set of issues and your team had to roll back all the changes. How much did that cost you? Do you even want to know?

Other Costs That We Won't Take Into Account

The picture I've painted up to this point is not even the full picture because you need a database programmer or an administrator to manage your data. I will not take this into account because whether you keep your database on premises or in the cloud, you need professional help to manage it so we'll exclude that from our numbers.

The Cloud Option

I took some numbers from Microsoft's Azure website for the Azure SQL Database which is the cloud version of their flagship database. Microsoft has many levels to choose from when it comes to how much "horse power" you can put into your database. I picked something that is not the lowest but a configuration that I feel should be sufficient for most small business use cases. According to Microsoft's website the S4 configuration costs $147.59/month which includes everything -- even the software license you need to operate the database.

As the configuration level goes up, so does the price and the cost could be thousands of dollars per month depending on your needs.

Here's what's really cool about the cloud option. You can start with a configuration that you think would do the job and if it doesn't, you can simply upgrade it with the click of a button. If you were to purchase hardware that turns out to be insufficient, you're in real trouble. You probably can't return the hardware so all you can do is, if possible, spend more money to bring it to where it needs to be. Most IT professionals don't make that mistake by making sure they purchase hardware that will serve the organization for a foreseeable future. In other words, they overspend from the get go. I'm not saying this to disparage their work. I held a few CTO positions during my corporate days and I did the same thing. That's because in the long run, that approach is more beneficial to the company. Nevertheless, nothing can come close to the flexibility of using a cloud service that you can adjust up and down depending on your needs.

As If Hiring the Test Pilot and the Chief Engineer With the 747

Another important point is that most IT professionals have to wear many hats to be able to support their employers' needs. It just comes with the territory. As a result, many of them end up being "a jack of all trades, master of none". Almost all IT professionals I've worked with always tried very hard to master their craft and deepen their knowledge but only a handful could do it even to their own satisfaction due to the realities of life.

Using a cloud service for your database needs is like purchasing an airplane that comes with its test pilot and engineers who were involved in building it. Whether you use Microsoft's cloud platform or Amazon's or any other cloud provider, chances are they will have support professionals with laser sharp focus on a single product and equipped with the necessary resources to provide the kind of support that would make you oblivious to their existence. That is not to say that cloud services never go down because they do. And when they go down, they go down royally affecting tens of thousands of customers and costing some serious money both to the cloud provider and their customers. This is just the nature of the beast. Nothing man-kind has ever built works 100% of the time.

This is also a good incentive to cloud providers to take every precaution available to prevent such catastrophic scenarios. Nevertheless, they still happen though somewhat rarely.

No More Using Yesterday's Technology

A key benefit to using a cloud service is that providers are always updating and upgrading their technologies to the latest and greatest ones. So you'll always be using the latest technology. Many small to medium size businesses simply skip software versions and never even become aware of the new capabilities they can take advantage of with new technology.

In case you are not aware, we are in the middle of a major data revolution. New and exciting data management technologies are spreading like wildfires. If you're still stuck with a basic relational database, you're probably not taking advantage of new technologies that can bring your data to life. Instead of looking at static reports that show you what happened last month or last year, you can start looking at projections that pop up as alerts on your smart phone.

Incorporating some of the new technologies like NoSQL databases and machine learning, you can start to realize the true potential of your corporate data.

Conclusion

I hope I was able to make a business case for you to take your corporate data to the cloud. And here comes my pitch: do you need to talk to an expert and see how your organization can take its data to the cloud? Contact us by clicking here.