Software startup credits Amazon cloud computing for cost savings

Can't come up with the $100,000 for new hardware servers in this credit crunched economy? Put your software on the Cloud for $2,000 per month, says Billy Marshall, chief strategy officer for rPath. He's speaking from experience because that is what he's done at rPath, a Raleigh NC-based 40+ employee startup offering products for the creation, distribution, and maintenance of applications as virtual appliances. Marshall feels the pressure to conserve cash and says the Cloud is helping rPath reduce hardware expenses. He argues that the Cloud could help other companies, small and large, get through this recession. Marshall shared some of his experiences in this interview with

So who can take advantage of the cost savings from Cloud computing?
I think you are going to see the Cloud computing trend accelerate not only with small companies like us. You are going to see big companies that are facing data center constraints think long and hard about how they can free up some of their existing capacity by migrating part of their portfolio to something like Amazon EC2 or some of these other companies that are offering variable costs, and very fine grained infrastructure services. What is an example of the way you are saving money by using the Amazon Cloud?
In our training courses we used to have to provide a server to set up the environment. The server is not that expensive, but shipping it around is pretty expensive. In a year, hardware plus shipping for every class is about $4,000. We set our training classes up in the Amazon Cloud where we're able to give each student their own environment. For a day it costs $2.40 for each student and totals about $400 per year verses $4,000. Plus what did that server do the rest of the time when we weren't using it for our classes? It just sat there collecting dust. So you could envision it as a stack of cash collecting dust. What about concerns regarding the security and reliability of Cloud computing?
It takes time for people to build up trust for a new approach. They simply haven't had enough time and experience yet for them to trust Amazon. Trust is a funny thing. People talk about data security and they don't want their data out there in the Cloud entrusted to someone else. But every day in most of these organizations, someone that they don't know comes into the company in a pair of coveralls with an Iron Mountain badge. They ask for all of the confidential highly proprietary data surrounding the most important intellectual property. They put it in the box and walk out to a truck and drive away. They don't know he's not driving down the street to their competitor. But they trust that he's not. They've learned to trust Iron Mountain because they've had experience that tells them Iron Mountain is trustworthy. In time they'll come to trust Cloud vendors. In your experience is Amazon reliable and secure?
It's not perfect. But when I get that question I always ask the audience: "Raise your hand if you've ever had your internal IT staff have an outage?" Everybody in the room raises their hand. Okay. Then I ask: "What's more likely to happen, your internal IT staff has an outage or Amazon has an outage? Hands go up for the internal IT. Sure it's real. You'll have outages. But so what? You have outages other places too. How much are you willing to pay not to have an outage? You can do that, but you have to weigh the cost/benefit. Amazon, for example, gives you a terrific price.

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