Media organizations that are traditionally a day late and a dollar short have been talking again about whether you should keep your organization's IT infrastructure in the cloud or on local servers. The analogy used in one recent article is that many industrial businesses used to generate their own power — but eventually, tapping into the grid became cheaper and more reliable.

Case Study #1

Consider a small-to-medium business running a handful of servers on-premises. They pay for hardware, cooling, power, and the staff to maintain it all. When you tally the fully loaded costs — including the sysadmin's time spent on firmware updates, failed drives, and capacity planning — the per-unit cost of compute can be surprisingly high.

Case Study #2

Now look at a comparable workload running on cloud instances. On-demand pricing looks steep at first glance, but reserved instances bring the effective rate down considerably. The real savings, however, come from shifting operational burden: patching, physical security, and hardware lifecycle management move to the provider.

Summary

The industrial power-grid analogy holds up better than many IT leaders want to admit. Generating your own compute — like generating your own electricity — only makes sense at very large scale or when you have regulatory or latency requirements that the cloud can't yet meet. For most organizations, the cloud is no longer an experiment; it's the default.