Are soaring cloud costs making you rethink your strategy? Here’s a hack you need to try

You may know that edge cloud is essential for reasons of latency, upstream bandwidth, data sovereignty/security and standalone resilience. But were you aware it can also save you money?

Edge cloud already solves important business problems

As I have previously described, edge cloud addresses a number of business drivers, including:

• Low latency. Some applications require low-latency access to compute resources. Examples include private 4G and 5G, IoT, augmented reality (AR), virtual reality (VR) and smart manufacturing.
• Reduced backhaul. Applications like video surveillance produce tremendous volumes of data, only some of which contain useful information. Applying local pattern recognition and analysis is a good way to reduce the volume of uplink traffic. By processing the video stream locally, the required uplink can be drastically reduced because only alerts or aggregated data are sent upstream.
• Data sovereignty. Some companies, industries and jurisdictions have requirements for keeping data local. A centralized cloud requires transporting data out of the specified area and isn’t an option in those cases.
• Standalone resiliency. What happens to your mission-critical applications when the network links fail? If the applications are hosted centrally, you’re dead in the water. Local hosting provides the ability to keep going until the network is restored.
• Lower costs. A centralized cloud has many benefits, but it can be very expensive for applications that must run all the time. For example, the cost on Amazon Web Services (AWS) of reserving a single “a1.xlarge” instance (4 vCPU, 8Gbit memory) is $46.94/month, or $1690 over a period of three years. To enable a similar environment on a uCPE requires adding four CPU cores and 8Gbit of memory. That means a one-time incremental cost of about $800 – less than half the three-year cost in AWS.

The old assumptions about cloud computing may not hold.

Cloud costs have gone up

The costs have increased since I wrote the blog above in December 2022. An equivalent “c5d.xlarge” instance with (4 vCPU, 8Gbit memory) costs $2749.40 for a three-year reservation, or $118.26/month. For the same amount, you could deploy a substantial edge cloud onsite to address the same applications while also hosting virtual network functions (firewall, router, SD-WAN, etc.) to handle your networking requirements.

InfoWorld just published an interesting piece titled “Cloud may be overpriced compared to on-premises systems” that describes this phenomenon. As noted in the article:?

“The Bureau of Labor Statistics Producer Price Index reported a 3.9% month-over-month decline in the cost of host computers and servers, meaning that the hardware has gotten cheaper. At the same time, cloud services saw prices increase by 2.3% since the third quarter of 2022.”

What does that mean for you? The old assumptions about cloud computing may not hold. More from the InfoWorld article:

“Again, this is about being entirely objective when looking at all potential solutions, including cloud and on-premises. Cost being equal, cloud computing will be the better choice nine times out of 10, but now that the prices are very different, that may not be the case.”

Consider all the costs and requirements when evaluating cloud deployments

You must weigh all the relevant requirements and options when considering where to deploy your applications. And those options must include edge cloud. A thorough analysis may show that an edge cloud will meet your requirements AND save you money. Please contact Adtran to learn how we can help you with edge cloud deployments. Also, please see this solution brief and data sheet for more information on Ensemble Cloudlet.