Why Some Startups Say the Cloud Is a Waste of Money

Grazed from Wired.  Author: Cade Metz.

Eric Frenkiel is through with convention and conformity. It was just too expensive.  In Silicon Valley, tech startups typically build their businesses with help from cloud computing services — services that provide instant access to computing power via the internet — and Frenkiel’s startup, a San Francisco outfit called MemSQL, was no exception. It rented computing power from the granddaddy of cloud computing, Amazon.com.

But in May, about two years after MemSQL was founded, Frenkiel and company came down from the Amazon cloud, moving most of their operation onto a fleet of good old fashioned computers they could actually put their hands on. They had reached the point where physical machines were cheaper — much, much cheaper — than the virtual machines available from Amazon. “I’m not a big believer in the public cloud,” Frenkiel says. “It’s just not effective in the long run.”…