The Cloud vs. Dedicated Servers

I’ve been out looking at the cloud computing space for some time now, what I’ve found is that from security, to scalability there are a lot of questions that companies should take into consideration before moving their applications and mission critical data to the cloud…which by the way are typically “not managed”. I’ve talked to a couple small business looking for venture funding and there seems to be a recurring theme I keep running into…stop rushing to the cloud.

From an apples to apples comparison: Picture a cloud environment where an expansion stage business uses cloud servers to virtualize their apps. Well they might end up sharing the aforementioned server with another business, but with a dedicated rented server there is no sharing of space, meaning there is no sharing of data. In other words when you buy an apple you get the apple versus buying an apple and getting a slice. Check out Erik Howard’s piece:

In a virtualized environment servers replicate operating systems within one another thus allowing them to run mini servers within the overlying OS. The issue here is that if your business is sharing a server in the cloud with a business that has some sort of spike in their traffic/usage or is compromised security wise than it will inevitably effect aspects of your business, maybe the sales support and marketing functions, maybe something else. Is it worth the risk? I’m not saying which is better one way or the other but there is some great information (biased) on dedicated servers from a site called

There are lots of reports that even the almighty Amazon EC2 is becoming oversubscribed and having scalability issues.

If nothing else, I believe that with some of the potential issues the cloud may have, it only creates opportunities for new companies to come to market with new visions, new ideas and new innovation and that is what I’m looking for.

Peter Zotto
Peter Zotto

Peter Zotto is the GM at Price Intelligently. Previously he was an analyst at OpenView where he helped to identify qualified investment opportunities.
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