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Because you're not Amazon you also probably don't have tech as your core competency and don't have the budget to hire people skilled enough to operate an your on-prem setup as well as they operate their cloud. Because you're not a startup you there is a very good chance that you have a very process-driven (cover your ass), slow-moving culture - this very often translates to an IT department where getting even basic things done (like reserving extra compute or changing a network setting or starting to use a third party software) takes months of waiting or pleading. Maybe you have never encountered this kind of pathological IT department, but they're very common, and it's a major reason executives bought into cloud to begin with. Of course, many companies like Geico seem to have merely replicated their IT pathologies in the cloud, but at least in the cloud you have fewer sources of problems in areas like physical space management, buying/integrating hardware to grow or change your footprint and dealing with all the SKUs and supply chain problems therein, or negotiating on-prem licences. There are many more moving pieces when operating on-prem: more operations staff across more kinds of roles (yes, you still have eg devops people when using the cloud, but you don't need as many building operations staff (where managing a datacenter is its own speciality), people managing hardware/software vendors and related supply chain issues, people skilled in physical networking, people to plug things in/out and physically operate the machines), managing and acquiring the physical space where your on-prem setup is, buying/accounting for all the different kinds of hardware you need, licensing/using more software with more difficult integration to achieve equivalent functionality to eg EC2, licensing all your 3P software to run on-prem... even if nominally less expensive than the cloud in some cases, there are many more places where things can go wrong. That's not as easy to account for in a direct TCO comparison because it manifests as slowing things down - which does introduce very substantial costs - and distracting management away from other opportunities to grow revenue or improve costs. Also, cloud downtime is really overstated as a problem in 2024. It makes the news because it has a high blast radius and involves high profile companies, not because it's more common than on-prem. With the exception of AWS us-east1 issues (which can break many AWS products at once across the world), most cloud reliability issues these days are isolated to only a few products and only a few regions. I think a lot of small on-prem companies don't realize that they are not actually more reliable, but just operate at a smaller scale where the probability of downtime causes "lucky streaks" to be more common (ie if you play roulette for three rounds, you're much more likely to have an abnormally high win rate than someone who plays it for three hundred rounds, even though you both have the same odds). Most companies don't have as mature security/risk operations as cloud providers and so face an existential risk/the possibility of huge (months) of downtime in the event of a fire/natural disaster at their dc, cryptolocker attack, janitor unplugging the server that says "do not unplug" - this isn't something people have to worry about with cloud providers to nearly the same extent. |