Note that I've written "relying", not "hosting", meaning I'm well aware of the fact that using "the cloud" as an additional layer of capacity can be a good thing.

But relying on the cloud means that you're giving up control.

Power outage in your data center? Buy diesel generators next time! Faulty network card? Put in two redundant ones!

AWS down? Wait and pray!

Go back to the building metaphor. Building datacenters is not our core business, so we outsource it. Much like building a building is not our core business, nor running a telephone system, so we outsource those things too. All business critical, but still outsourced.

Of course it's okay to outsource things; and it's also okay to outsource critical stuff. I'm doing that too.

But, outsourced or not, critical things should be as redundant as needed, and not relying on a single point of failure.

If in a hospital a life-keeping machine depends on electricity, I hope they have diesel generators available even if their outsourced power supply fails.

I think people thought they were outsourcing the job of not having a single point of failure.

Having a critical service supplied by someone does not necessarily mean there's a single point of failure, because that someone might be working to make sure there is no single point of failure.

No, building data centers is not your core business, but your core business relies on them so intimately that it makes sense (at least to some people) to have a little more direct control of your datacenter resources. Or, the have a warm-standby of some sort.

The best analogy I can make is it's like a telemarketing company. Their core business is not building/owning/maintaining PBXs, it's calling you and trying to sell you crap at diner time. However, because they cannot deliver their core product reliably without a PBX, they tend to own/maintain their phone switches. They don't order 300 simple phone lines from the local telco, they order a couple of trunks, and manage phones and call routing to fulfill their core business needs.

It's not a perfect analogy, I know, there are cost factors unaddressed, but it's the best I can come up with right now.

I'm personally a fan of cloud services for elasticity, and early stage launching. I'm not a big fan for day to day operation of a site. The model I haven't seen worked up yet, it what does this REALLY cost a site like reedit or 4sq in relation to owning/controlling more of their own infrastructure? It's quite possible the best overall business decision is to take the risk and deal with the unpredictable inevitable outages and just hope they don't last too long.

At the end of the day, you need to make money. The question becomes: can you afford to be in the datacenter business?

Executing well in operating a facility with significant scale means that you need to have folks working for you who have a clue about operating a datacenter. That's not cheap.

IMO, the real question is whether or not you should be running your core business on a genericized "public cloud" like Amazon or if you should be using a traditional server hosting outfit, a managed service provider like Verizon/AT&T or a colo. There's a value calculation that you have to compute to figure out what's right for you.

I worked for a company that ran call centers and had a significant commerce site (whose growth exploded beyond expectations) back in the early 2000's. Our offices were a converted school and the datacenter was a classroom with a roof A/C unit. We knew it sucked and suffered through downtime and failures, but the company wasn't big enough to do things the "right" way. So we had to do things the "wrong" way, because the alternative was to go out of business. If that were today, we would almost certainly have had 80% of our systems at Amazon/Rackspace facilities.

> Power outage in your data center? Buy diesel generators next time!

> AWS down? Wait and pray!

Wouldn't you be waiting and praying if your datacenter lost power and didn't have diesel generators, too?

Because startups can afford their own data centers?