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Our company is considering moving from hosting our own servers to EC2 and I was wondering if this was a good idea.

I have seen a lot of stuff about can cloud computing (and specifically EC2) do x, or can it do y, but my real question is why would you NOT want to use it?

If you were setting up a business, what are the reasons (outside of cost) that you would choose to go through the trouble of managing your own servers?

I know there are a lot of cost calculations you can put in regarding bandwidth, disk usage etc, but there are, of course, other costs regarding maintenance of your own server. For the sake of this discussion, I am willing to consider the costs roughly equal.

Does anyone have any reasons?

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I can think of many reasons why not use EC2 (and I'm talking about EC2, not grid comp in general):

  • Reliability: Amazon makes no guarantee as to the availability/downtime/safety of EC2
  • Security: Amazon does not make any guarantee as to whom it will disclose your data
  • Persistence: ensuring persistence of your data (that includes, the effort to set up the system) is complicated over EC2
  • Management: there are only a few integrated management tools for a cloud deployed on EC2
  • Network: the virtual network that permits EC2 instances to communicates has some quite painful limitations (latency, no multicast, arbitrary topological location)

And to finish that:

  • Cost: on the long-term, if you are not using EC2 to absorb peak traffic, it is going to be much more costly than investing into your own servers (cheaper servers like Supermicro cost just a couple of hundred USD.)

On the opposite aspect, I still think EC2 may be a good way to soak up non-sensitive peak traffic if your architecture permits it.

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