What is the value of IT convenience?

RPath's Billy Marshall wrote a post that is closely related to a topic I have been thinking about a lot lately. Namely, Billy points out that the effect of server virtualization hasn't been to satisfy the demand on IT resources, but simply to accelerate that demand through simplifying resource allocation. Billy gives a very clear example of what he means:

"Over the past 2 weeks, I have had a number of very interesting conversations with partners, prospects, customers, and analysts that lead me to believe that a virtual machine tsunami is building which might soon swamp the legacy, horizontal system management approaches. Here is what I have heard:

Two separate prospects told me that they have quickly consumed every available bit of capacity on their VMware server farms. As soon as they add more capacity, it disappears under the weight of an ever pressing demand of new VMs. They are scrambling to figure out how they manage the pending VM sprawl. They are also scrambling to understand how they are going to lower their VMware bill via an Amazon EC2 capability for some portion of the runtime instances.

Two prominent analysts proclaimed to me that the percentage of new servers running a hypervisor as the primary boot option will quickly approach 90% by 2012. With all of these systems sporting a hypervisor as the on-ramp for applications built as virtual machines, the number of virtual machines is going to explode. The hypervisor takes the friction out of the deployment process, which in turn escalates the number of VMs to be managed."

The world of Infrastructure as a Service isn't really any different:

"Amazon EC2 demand continues to skyrocket. It seems that business units are quickly sidestepping those IT departments that have not yet found a way to say “yes” to requests for new capacity due to capital spending constraints and high friction processes for getting applications into production (i.e. the legacy approach of provisioning servers with a general purpose OS and then attempting to install/configure the app to work on the production implementation which is no doubt different than the development environment). I heard a rumor that a new datacenter in Oregon was underway to support this burgeoning EC2 demand. I also saw our most recent EC2 bill, and I nearly hit the roof. Turns out when you provide frictionless capacity via the hypervisor, virtual machine deployment, and variable cost payment, demand explodes. Trust me."

Billy isn't the only person I've heard comment about their EC2 bill lately. Justin Mason commented on my post, "Do Your Cloud Applications Need to be Elastic?":

"[W]e also have inelastic parts of the infrastructure that could be hosted elsewhere at a colo for less cost, and personally, I would probably have done this given the choice; but mgmt were happier just to use EC2 as widely as possible, despite the additional costs, since it keeps things simpler."

In each case, management chooses to pay more for convenience.

I think these examples demonstrate an important decision point for IT organizations, especially during these times of financial strife. What is the value of IT convenience? When is it wise to choose to pay more dollars (or euros, or yen, or whatever) to gain some level of simplicity or focus or comfort? In the case of virtualization, is it always wise to leverage positive economic changes to expand service coverage? In the case of cloud computing, is it always wise to accept relatively high price points per CPU hour over managing your own cheaper compute loads?

I think there are no simple answers, but there are some elements that I would consider if the choice was mine:

• Do I already have the infrastructure and labor skills I need to do it just as well or better than the cloud? If I were to simply apply some automation to what I already have, would it deliver the elasticity/reliability/agility I want without committing a monthly portion of my corporate revenues to an outside entity?

• Is virtualization and/or the cloud the only way to get the agility I need to meet my objectives? The answer here is often "yes" for virtualization, but is it as frequently for cloud computing?

• Do I have the luxury of cash flow that allows for me to spend up a little for someone else to worry about problems that I would have to handle otherwise? Of course, this is the same question that applies to outsourcing, managed hosting, etc.

One of the reasons you've seen a backlash against some aspects of cloud computing, or even a rising voice to the "its the same thing we tried before" argument, is that much of the marketing hype out there is staring to ignore the fact that cloud computing costs money; costs enough to provide a profit to the vendor. Yes, it is true that many (most?) IT organizations have lacked the ability to deliver the same efficiencies as the best cloud players, but that can change and change quickly if those same organizations were to look to automation software and infrastructure to provide that efficiency.

My advice to you: if you already own data centers, and if you want convenience on a budget, balance the cost of Amazon/GoGrid/Mosso/whoever with the value delivered by Arjuna/3TERA/Cassatt/Enomaly/etc./etc./etc., including controlling your virtualization sprawl and preparing you for using the cloud in innovative ways. Consider making your storage and networking virtualization friendly.

Sometimes convenience starts at home.