A common mistake people make when looking at a cloud service and trying to determine if it’s expensive or not expensive, if it’s a good way to go or a bad way to go, is just counting up their servers and figuring, will this one is going to cost me $10 grand and this one is going to cost me $5 grand and if I look at all this and figure it’s going to last me three years, divided by 36 months, if that’s more than it would cost me in the cloud, then the cloud must be inexpensive if that’s less than the cloud must be too expensive. And there are a lot of reasons why that just isn’t enough information to make an educated decision.
In a regular data center environment, you’ve got a lot of different pieces of that puzzle and all of those pieces have a cost associated with them. You’ve got power to run the equipment, you’ve got the cost of cooling that equipment, you have the actual real estate or office space that is being wasted to the equipment that is in there now. If you’re running VMware or some other virtualized environment, then you’ve got licensing costs associated with supporting that environment. You’ve got switches and routers and cabling, all those other components that make up the networking behind your environment. These are all things that you don’t pay extra for when you’re looking at something like Azure.