Cloud vs sand: Google vs Microsoft

Cloud vs sand: Google vs Microsoft

Summary: The numbers don't lieAn independent study found on-site Microsoft apps - Office and Exchange - cost 20x in capital dollars and 5x-6x more than Google Apps on a 3 year Total Cost of Ownership (TCO) basis. How can Microsoft compete?


The numbers don't lie An independent study found on-site Microsoft apps - Office and Exchange - cost 20x in capital dollars and 5x-6x more than Google Apps on a 3 year Total Cost of Ownership (TCO) basis. How can Microsoft compete?

The debate Cloud, as in Google apps, and sand, as in locally hosted Microsoft apps, are battling for business mind share. "Cloud is cheaper" say proponents. "Traditional apps are more reliable" say skeptics.

The rub: both are right. The business problem is finding the most cost-effective path given your needs.

No Microsoft or Google money A Boston company TwinStrata did this study with no funding from Google or Microsoft. TwinStrata sells Clarity AP (Assessment & Planning), that quantifies infrastructure data loss and downtime risks.

Figuring out downtime People are lousy at estimating the risk of uncommon events. All disk drives fail, yet few back up. SATA RAID 5 is no longer safe, yet people buy it.

But when one solution costs 20x more, it makes sense to take a 2nd look. Clarity AP uses Bayesian analysis to model the reliability and availability of systems, software, networks and operations. You can compare the difference between RAID 5 and 6, or tape and disk backup, or a Tier 1 data center against Amazon's S3. And much more, such as recovery processes.

Bayesian methods determine the total variability of a group of many subsystems. Virtually forgotten 40 years ago the technique is now widely used. (Here's a short YouTube video on Bayesian theory and the software.)

Clarity AP figures out the expected availability of a complex system and, by plugging in costs for downtime and data loss, figure out the expected uptime of a configuration and what the downtime cost.

The study focuses on cost and data availability. It assumes that application integration, security, performance and compliance meets minimum business requirements.

It also assumes that you have about 20 employees and use good quality products, such as a NetApp external filer.

The method

Model assumptions

Daily volume of new email 100 MB
Local copy of email None
Archiving None
Cost per hour of downtime $500
Cost per GB of data loss $5,000
Network outage Lose email access

Office apps assumptions:

Daily volume of new documents 50 MB
Local copies of documents None
Cost per hour of downtime $250
Cost per GB of data loss $30,000
Network outage No application access

The cost of downtime and data loss is critical for assessing cloud vs sand. The Clarity AP software makes it easy to perform sensitivity analysis.

The results The study looked at four different configurations: 1) Google apps with a single network connection; 2) Google apps with two network connections for added availability; 3) Microsoft Office and Exchange with internal disk storage; and, 4) Office and Exchange with an external storage array.

Solution Capital expense Operating expense 3 year TCO
Google $1.3k $10.7k $33.4k
Google dual network $1.3k $17.4k $53.5k
MS internal disk $27.5k $40.5k $148.9k
MS external array $69.1k $46.5k $208.8k

What about risk? Most new small businesses would stop there: 1/20th the cost of an on-site system is too good to ignore. But what if you are thinking of migrating to Google or your existing system needs replacement?

Here's how the options cost out when adjusted for risk.

Solution Annual risk of downtime Annual risk of data loss Adjusted TCO
Google $19.1k $1k $93.5k
Google dual network $13.2k $1k $95.9k
MS internal disk $10.2k $8.6k $205.3k
MS external array $7.2k $1.1k $233.7k
Note that the dual network option reduces downtime costs, while the external array is much less likely to lose data.

Adjusting for the cloud's greater downtime Google is less than half the cost of Microsoft. As Google's availability improves the cost advantage will only grow.

If Google ever figures out how to make their stuff usable by small business owners, Redmond will be a ghost town.

The Storage Bits take Google will, of course, blow their huge cost advantage over Microsoft. At heart they're geeks who don't understand small business. In 20 years they'll look like Sun does now.

Here are a few of Google's problems in the SMB arena.

  1. Privacy suckage. They ask for too much information and aren't explicit about how information will be used. For example, if you want to use Google calendar you have to upload all your contacts to Google. Why?
  2. Non-existent support. People are willing to pay for support. Google needs to figure it out. They could, for example, train and credential ISP, VARs and consultants to offer Google Apps support.
  3. User experience and design. Google's homepage, designed for minimum bandwidth when most people used modems, was an accidental triumph - but it's been downhill from there. Marissa Mayer, VP of User Ignorance, is a disaster. Marissa, a word of advice: you're young, rich and w-a-a-ay too comfortable at Google - go spread your wings at another company and find out if you're smart or just lucky. Hint: it's the latter.

The real message of this analysis is that the economics of the Internet have made it a competitive advantage to be small. Capital requirements are minimal - good thing today - and cloud infrastructure + cheap local computes and storage

Comments welcome, of course. I've been doing some work for TwinStrata - like the video mentioned above - but the study was their idea. Update:Here's a link to a 3MB zip of a pdf presentation on the study from End update.

Topics: Networking, Apps, Google, Microsoft

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  • Geeks make it right.

    Marketers make it look right.

    Which one do you want behind your business?

    Google may look like Sun in 20 years but then Microsoft will look like DRI. I can imagine a similar report with far different findings to be release from Microsoft. If there ever was one I don't think we'll see it now.

    My comments have disappeared lately from certain ZDnet bloggers. I haven't violated any forum rules that I know of. Although I am honored by the special attention given me, I will take measures to revive any deleted comments. Or, some kind of explanation can be given and maybe we can work something out. Either way it's nice to see I'm having some kind of effect. I wasn't expecting that.
  • Can we locally host Google App?

    I heard that we can run them in offline mode now. But how about hosting it locally in a private server (E.g. Gmail\calendar server etc..) ????
    • If you could it would cost you.

      You'd lose the benefits of service from Google's infrastructure. Then you
      have to ask yourself if there isn't a better solution on Linux or whatever.


      Robin Harris
      • How 'bout HTML5 and offline database storage

        as implemented in e.g. Apple's Safari?
        I think the new standards will solve a bunch of
        problems. Move away from Microsoft and things
        should get a lot easier.
        • By doing that...

          You move from Microsoft to Apple, which makes no difference. And moreover, that will cost you a lot of money for training and employing more technicians.
          • Costing money to change to a better browser???

            How about [b]saving[/b] a lot of money by getting something which both works a lot better AND is free from a million security issues?

            I don't really say you all should become Apple customers, but it's clear that the Microsoft alternatives look increasingly attractive, partially because of superior standards support such as HTML5 and CSS3, and so forth.
          • You didn't understand the story

            First of all, I already have what I want. By considering the alternatives, there are two possibilities:
            1) open source: as an entreprise, I will have to switch my servers to no-support softwares meaning that I will have to hire more people (since obviously I don't want to buy either from Redhat or sth) for installation and maintenance.
            2) Sun/Apple/...: To be frank, I use Sun workstations for quite a while, and I am not satisfied with it. Apple? More secured? Hmmm. I am not sure (Safari has also been broken by the hackers). And its hardware and software ARE expensive. Worstly, I have no choice but to buy Apple machine FIRST in order to use its software! This is what I really don't like.
          • Apple is the MOST proprietarey and least secure.

            Safari is the easiest to hack of all mainstream browsers. An Apple uses standards -their own! With Apple you are locked in on their hardware - which isn't bad hardware but if you want OSX you have to get Apple HW (sort of, it is possible to put it on select 3rd party hardware but I'm not sure it is legal).

            And while Intel based, Apple writes most of the hardware drivers so you are somewhat limited as to what hardware you can add to the system. I mean you can't pick and choose as easily the latest Graphics cards or other hardware.

            At least with non-apple PC hardware you have a huge selection of compatible hardware. And if you think MS software isn't secure you can choose Linux or Unix (Solaris).

            If you like Safari's standards compliance well you can run Safari on Windows, but I won't because it so easy to hack( 2 macs were hacked due to 2 different exploits using safari and the first one went down in 2 minutes). Chrome, Firefox and IE8 are good enough for me. Actually I don't run Chrome. I tend to use FF.

            I've used Macs, Linux, and Windows and have tested software on them (professionally). I prefer Windows because I like the development tools and I liked the PC platform which I sort of grew up with after the mainframe days.

            To be honest I found flaws with them all. I had to reinstall OSX 3 different time on a Mac. Once it was due a patch. Once while attempting to upgrade from Panther to Tiger, that upgrade went south and I had to reinstall Panther. I was then able to make the jump to Tiger. The 3rd time I don't remember why.

            Ubuntu has been very reliable but it can be tough to get certain hardware combinations working. You still have to be aware of hardware compatibility but not to the same extent as you do with Apple HW.

            And for me Windows (2000, XP, Vista) has been very reliable - even in antagonistic environments (kids and their multitude of online and buggy games). The only reason I ever have to reboot is due to patches, which I admit, is a weakness, Linux you don't have to reboot due to patching as often. Same is true for OSX.

          • You know it's a sin to lie? :-(

            ~$15 billion spent annually and worldwide on Microsoft Windows
            insecurity tells you're dead wrong and not particularly nice for spreading
            lies like this. :-(

            It's about time we humans free ourselves from mediocrity and try to be
            truly creative instead, with technology which works for us, not the other
            way around. Soon time for you to get a new job.
          • On the other hand...

            ...Apple [i]does[/i] adhere to standards and doesn't impose their own technologies if you want to exist in an HP-UX/AIX/Linux/Solaris/Netware environment. Apple supports LDAP for example, rather than forcing you to use their own GDS (I mean Active Directory if you don't know what a Global Directory Service is). Apple will work with many mail services quite well, and I run Thunderbird as my mail client and StarOffice 9 (which not only supports Microsoft's proprietary formats but ODF formats as well) as my productivity suite on my MBP. Sure Apple supplies hardware and software in one package, but the expensive stuff is in the datacentre, and their openness is what is making many corporations reconsider them as a desktop/mobile solution provider.

            Oh, and did I mention that Microsoft has the [b]highest cost to exit[/b] of any enterprise solution provider?
      • A caching server could be quite inexpensive. Google and others should

        consider it. But, maybe for the long run, offline access is the best method.

        But, offline access opens another can of worms, and that is you could have sensitive documents distributed around on various hard drives - the computer is stolen, and they have all your documents. Of course the sand model already has this problem.
        • Caching servers won't do the trick

          You need a WAN Optimization device that optimizes specific applications and addresses latency. Riverbed and Cisco come to mind. But Cisco is basedon a file cache so that's not optimum....
          • I am saying that Google would have to make it, and it would be specific to

            Google web applications, caching both data and applications, for just Google web applications.
      • But...

        You would gain security, integrity and control...

        The biggest problem with the cloud, especially, for companies outside the USA, is [i]where is your data stored, who has jurisdiction and who can guarantee that the data will be treated in ways compliant with the laws where the company is based, and not where the data is stored[/i].

        Those are big, and important questions. One USA based provider, which also has a data centre in the UK, was asked whether they could guarantee that the data would be stored in the UK data centre. Their answer was that there was no provision in their cloud solution to restrict data to specific geographic areas.

        That is fine, in disaster recovery terms, if the data centre is hit with a problem, another will automatically take on the load, with limited or no data loss.

        [b]But[/b] what about data security? Can they guarantee that they won't have a login problem and everybody on the service will be able to see your data? Weak passwords? The UK, in particular, has had enough problems with civil servants leaving disks, laptops and memory sticks in taxis or on trains - let alone MI5 selling cameras, with pictures of terrorist suspects still on the memory card, on eBay. Give then a system where they can log in from a cybercaf? and they'll probably forget to logoff when they've finished their tea and biscuits!

        What about legal jurisdiction? Who has jurisdiction over the data? Fine if you have something to hide and the data is housed in an offshore haven like the Cayman Islands, but if you are German based and have tight legislation about privacy etc. what happens when the FBI raid an American data centre and close it down, they don't have legal jurisdiction over the company or its data, in theory, but the data is physically on US soil, do they need to get a German court order to look at the German data? Or does the fact they have an American court order and have servers hosted in America in the hand negate the need to comply with the legal processes of the data owner? (And the same works in the other direction, if the data centre is outsourced to India or a former Russian state, do they need American court approval to access American data, or does a local court order mean they can trample all over the customer's rights and do what they want with the data?

        Moving totally cloud based, for many companies, especially outside the USA, is either a no go, or has too many uncertainties at present. This colours the view of many potential customers, the idea is nice, but the legal ramifications of having company confidential information held on third party servers in an unknown land, with unknown legal procedures required to get at that data...

        It is hard enough securing your own data on your own machines, let alone trusting it to some faceless flunky... I would think it also increases the options for indusrial espionage...

        Therefore, in its current state and the uncertain legal ramifications of off-shore data storage, it isn't surprising that many would consider having an "in-house cloud", but are reticent about trusing their confidential or company secret information to a third party with an "open cloud".

        I think the legal situation really needs to be cleared up, before cloud computing will be a major factor. It might save money on IT spend, but what about the increased spend on paracetamol and Peptobismol? ;-)
    • Why would you want to?

      WAN Optimization technology by companies like Riverbed and the like will allow you to run Windows virtually right on the appliance. In addition you can run your DNS/DHCP, File and Print, etc... just my 2cents.
  • The StorageMojo take - love it

    This is why I read this blog, even when it's on topics I'm not that involved in. Whether you agree or disagree, it's usually entertaining.

    Now, let's sit back and wait for Ms. Mayer's response...

    • It was a late night . . .

      But I fixed it this morning.


      Robin Harris
    • Hey, the Google Street View truck is outside my door!

      My guess is that MM has already cost Google more than $2 billion -
      mostly for the YouTube acquisition, and there may be a lot more that
      isn't yet obvious.

      Eric Schmidt, meet Jerry Yang. . . .

      Robin Harris
  • The one show-stopper in Google Apps (for us, at least)

    If your building loses Internet access, which does happen to us from time to time, we'd lose all internal email communication as well. For larger companies, what do they do to overcome that situation? You could host an internal system of some sort (IM?), but that sort of defeats the purpose of handing it over to Google. Or is having some basic apps idling locally in the background just considered a basic cost of switching over to a hosted app?
    • Google needs a caching server to solve that problem for the interim.

      But, remember, businesses are also down if you have no electricity or no water. So, as the network becomes more and more reliable like water and electricity, it will become an acceptable risk.

      Also, remember that Google has offline support, so, when you are down, you can at least edit existing documents, read existing email, and write email to be sent when the network is restored.

      Finally, even with the sand model, when you lose the internet, you lose incoming and outgoing email as well, and, a lot of other things do not work either, like all your web sites.