Cloud Solutions versus Cloud Services

July 8, 2014 VIEW ALL

cloud solutions

With a dizzying menu of public cloud options to choose from, how do you know which one(s) will get the job done quickly and cost effectively?  The answer is to think about cloud solutions, rather than just services.

Cloud Solutions are Just like Other Solutions

Before thinking too hard about cloud solutions, think about solutions in general.  There is one main top level decision in every purchase of goods or services: how much to build versus how much to buy.  Once you’ve identified your problem and are ready to implement a solution, all factors are secondary to this.  Common arguments in favor of building are cost of purchase, control, and flexibility.  Everyone wants cheaper raw materials with more choices and options, right?

Most markets evolve in similar ways.  When something is new, there are very few consumers – often known as pioneers or early adopters.  There are just as few standards.  In fact, it’s safe to say that most users don’t have a concrete understanding of what they are buying in this context, or what they really even need.  Most solutions at this stage of development are little more than raw materials combined with knowledge on how to put them together to solve specific problems.  This “do it yourself” approach works in small or emerging markets where only skilled users dare to either build their own solutions or sell their services to more mainstream customers.  As you would expect, the real benefits to consumers and producers alike arrive when markets mature a bit and offer higher value products and services.  We see it all over – automobiles, homes, computers – you name it.  Most goods we know and use today started life as “kits”, and eventually evolved to turnkey products and services – and cloud solutions are no exception.

Why Value Beats Everything Else

As much as everyone wants to pay less for and have more options in goods and services, the truth is that consumers truly benefit from standardization and simplification.  Purchases must provide value above everything else.  Value means different things in different markets of course, but generally speaking, it’s all about how quickly and easily you can put a product or service to work.  Other important elements of value include reliability (so you don’t run into problems) and support (in case you do).  When considering the cost of solutions versus raw materials, it’s important to add up all these elements as well as the purchase price itself.  In other words, what would it cost to add time-to-value, ease of use, reliability, and peace of mind to the parts themselves?  In almost every case, it costs less to buy solutions from a manufacturer or service provider than trying to piece them together yourself.  There are a few simple reasons for this.  First, the seller specializes in building these types of solutions, so they can do it faster and cheaper than you.  This usually means they have highly automated facilities and process in place, which they can afford because they spread out the cost over many, many customers.  Second, the seller can acquire the raw materials at a lower cost than you can.  Even if you think you’re buying wholesale, chances are you’re not buying enough goods or services to get the types of discounts larger producers do.  Finally, the seller again can afford to spread out the cost of supporting their goods and services across many paying customers, realizing serious economies of scale.  In fact, these economies of scale are so great that the seller can afford to price their products and services about the same as an individual consumer acquiring the raw materials directly.  Furthermore, manufacturers and service providers usually face fierce competition that forces them to operate even more efficiently, or risk losing due to inferior solutions.  This all works in your favor, every time.  Fewer options needn’t mean fewer producers to choose from – it means simplified products and services in their catalogs.  It means building the best practices into the “box” itself, rather than giving you a vast catalog to labor through so you can eventually arrive at the same conclusions.

The Market is Ready for Cloud Solutions

The public cloud is no longer an enigma that only highly skilled engineers can solve.  It’s mainstream, and it’s ready for real cloud solutions.  You already use these every day – increasingly, your email, calendar, contact management, and messaging are becoming turnkey cloud solutions rather than hand built services like they used to be.   Why should your compute be any different?  We all know that infrastructure is a means to an end – a set of tools you apply to solving some problem.  So, why not focus on the solution to the problem first, before jumping right into the toolbox to try to piece something together?  This is precisely what higher level cloud solutions like Software-as-a-Service and Platform-as-a-Service have to offer.  These are cloud services focused on solving specific problems, rather than handing you the raw materials at seemingly bargain rates and leaving you to build it yourself.  Sure they probably cost more per hour if you do the initial math, but you are generally paying for far fewer hours (or getting much more value for your money).  Much like off the shelf products can cost about the same or less than just the raw materials to build them yourself, cloud solutions can say the same versus vanilla cloud services.  When considering price, think about the problem first, then find the best tool to attack that problem.  Rarely is this an “instance” – it’s usually an application or development platform.


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