Just as Google, Microsoft catch up with Amazon cloud prices, Bezos whips out the axe on S3 again

Premise: the cloud is ideal for small businesses.

I'm going to use my home storage as a template here. It is similar in size to many of the 25-seat SMBs I work with.

Home lab + media + house files = 16TB home storage

---------------------

Amazon costs:

$0.06 x 1024 x 16 = $983.04 /month

$983.04 x 12 = $11796.48 /year, not including bandwidth costs or Amazon Transit costs.

Synology Costs:

Synology DS1513+ 5-bay NAS $900 x 2 = $1800

4TB Western Digital RE 7200RPM SATA $453.50 x 10 = $4535

$1800 + $4535 = $6335 for 16 TB at RAID 5 + RAIN 1, shipping, power and setup costs not included.

---------------------

Backups are required in both scenarios, as neither setup protects against fumblefingers or "oops." You can make the Synology setup virtually indestructible by swapping out one of the 5 bay devices for a 5-bay IOsafe for a few hundred dollars more while preserving the RAIN capabilities.

Once set up, a Synology RAIN pair requires virtually no maintenance. The Disk Warranty is 5 years long. Let's do some maths.

Assuming the Amazon costs drop by 10% year on year we have $11796.48 + $10616.83 + $9555.15 + $8599.63 + $7739.67 = $48307.76 total Amazon cost for 16TB over 5 years, not counting the cost of bandwidth or transit.

Assuming we opt for an IOsafe/Synology pair (and that IOsafe commands the MSRP $800 premium) we have $6335 + $800 = $7135 total Synology cost for 16TB over 5 years. Shipping, power, and setup costs not included.

---------------------

Let's make things interesting and assume that we need as close to zero repair time as is practicably possible for our RAID + RAIN IOsafe/Synology setup. That means we need spares on the shelf.

So let's say we go for three IOsafe 1513s (3x $1700 = $5100) for the NASes and we buy two spare disk drives to cope with RMA lag, bringing out total disk cost up to $453.50 x 12 = $5442. That should see us through 5 years with room to spare. I have many such setups in the field and can say pretty confidently that they eat about $100 per year in power each; that's $200 per year for the pair or $1000 over 5 years.

That makes Amazon's $48307.76 versus the "IOsafe/Synology RAID 5 + RAIN 1 with cold spares on the shelf" approach which costs $11542. Over the course of five years Amazon costs $36765.76 more.*

The argument for the cloud is that it lowers your total cost of ownership by removing the onerous costs of paying nerds to know and fix things. This means that Amazon is adding $36765.76 worth of value above the $11542 cost of the raw hardware approach I described.

Could someone please explain to me how SMEs can afford to pay $36765.76 in "added value" to set up and run 16TB of storage? I'm quite obviously missing a very fundamental piece of economics.

Some of the top minds in our industry adamantly proclaim that all SMEs should be using public cloud services exclusively. The only conclusion I can draw from this is that I do not charge anywhere near enough money for my services.

*The cost of bandwidth and transit over those 5 years isn't part of this calculation, nor is shipping for the Synology set. The bandwidth will be expensive for most people - and could be disastrously costly, depending on your ISP and data caps - while the shipping will for most people be insignificant.