Cloud Infrastructure as a Service worth the higher costs, experts say

Cloud Infrastructure as a Service may be more expensive than an in-house data centre infrastructure, but industry players agree that the advantages of freeing up an IT department's time outweigh the larger bill.

The popularity of Cloud Infrastructure as a Service is on the rise as IT departments attempt to become more flexible to business needs.

Cloud Infrastructure as a Service (IaaS) provides servers and storage on a pay-as-you-go basis to support peaks in demand on the infrastructure that would either be too costly or time consuming to deploy in-house. However, it turns out to be more expensive than in-house deployments, experts say.

Gary Boyd, head of engineering at Rackspace Hosting Inc., said the hosting specialist considers in-house services to be its main competitor.

"What it comes down to is the service -- we can offer that service 24/7. In-house services will normally run Monday to Friday, and problems can arise when the IT manager wants to go on holiday, for example. With Cloud Infrastructure as a Service you don't just get one employee running your data centre somewhere, you get a full team of experts looking after it round the clock," Boyd said.

We have so much time to work on developing and growing our business now. The model makes sense for us.


Duane Jackson,
founder and chief executiveKashFlow Software

Rackspace opened a data centre facility in West London last year due to customer demand for more services. "Many businesses out there wanted the full solution instead of just managing their hardware," Boyd said. "With our own facilities and our own staff, we can provide a whole service, including man power, cooling, freeing up space for the IT manager and supporting the operating system."

Duane Jackson, founder and chief executive of small business accounting software provider KashFlow Software, said that despite Infrastructure as a Service (IaaS) appearing more expensive than in-house services, the cost is worth it. KashFlow has been a Rackspace customer for just over a year.

"We have so much time to work on developing and growing our business now," Jackson said. "The model makes sense for us, as we are no longer distracted by having to maintain all our servers, and Rackspace has more expertise at hand than we have in-house."

Jackson said Kashflow can grow its business without having to worry about adding more servers itself. "We go to Rackspace and say this is what we want and this is how we want it," he said.


BT joins the game
BT is hopping on the IaaS bandwagon with its Virtual Data Centre service, available in October. It consists of servers, storage, networks and security, which can be orchestrated and automatically provisioned through BT's online portal. BT claims customers can change the infrastructure in real-time throughout the duration of the contract.

Steve Holt, general manager for IT services at BT Global Services, claims the new service will cut costs on infrastructure and support businesses that are lacking the skills needed to transform what they already have.

"If an IT manager wanted to rebuild an infrastructure but got it wrong, they would have to buy more components, redesign and start again, which is a waste of time and money," Holt said.

To set up the virtual service, BT tapped Cisco for routers and firewalls, NetApp for data storage, and HP for blade servers. These services are set up as a pay-as-you-go offering.

Bob Tarzey, service director at analyst firm Quocirca, said BT has a way to go yet before it can catch up with competitors that have purpose-built facilities for IaaS. "They have pulled together their portfolio as well as several acquisitions for this, so many of the data centres are not standardised. Companies like Equanet have massive purpose-built facilities for their virtual environments," said Tarzey.

He added that latency issues may arise with BT's Virtual Data Centre as the service is spread across multiple data centres.

Boyd said that Rackspace previously had colocated facilities but moved them to the purpose-built West London site for a better service. "There is a higher element of risk the more things are spread out. Now, with a fewer number of sites, we can ensure we are more focused in our delivery," he said.


Kayleigh Bateman is the site editor for


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