Running your servers - the cost of electricity vs cloud hosting

[simpsonj]

Capital revenue has to be spent on hardware.

[jmak]

Capital revenue has to be spent on hardware.

That's one of the complications of moving to cloud based servers. Your major expenses move from capex to opex. I did it with software years ago when we moved from buying perpetual software licenses to ovs-es.

 

Wasn't difficult in my school as the bursar was completely onboard.

[mavhc]

What percentage of a school budget is Capital Revenue? And who says it can't be spend on software or services?

[Boredguy]

That is a discussion you should have with your finance manager since they know how much capital formula the school gets, and which budgets it is assigned to.

We used to split our capital funding between the Premises department and IT. My software budget always came from the general school capitation and not the capital.

[jmak]

What percentage of a school budget is Capital Revenue? And who says it can't be spend on software or services?

HMRC says:

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/877712/Capital_toolkit_2019-2020.pdf

 

Most off-the-shelf computer software is now acquired under licence. If the licence is paid for by regular periodical payments then these should be treated as revenue expenditure and normally spread over the useful life of the software.

If a lump sum payment is made for the software licence, and it is evident that the useful life of the software is greater than two years, consideration should be given to treating the payment as capital expenditure.[/Quote]

 

From a school website, but their source is CIPFA/ LASAAC Code of Practice on Local Authority Accounting: A Statement of Recommended Practice (known as the SORP):

 

 

ICT – Purchase of new computer equipment, associated infrastructure and software may be treated as a capital cost. Software licences may be charged only if it is a permanent licence. The Local Government Act 2003 allows computer software to be capitalised only where the use of the software is granted for a period of at least 1 year. Annual licences or subscription charges are not allowed and must be treated as revenue expenditure.[/Quote]

 

Perpetual software licenses can be CapEx, but this thread is about moving servers to the cloud and that's definitely a subscription service.

Edited April 8, 2022 by jmak

[howartp]

Until premises start slapping all your IT Equipment on timers anyway

Yep, I'm following that thread

 

TBH premises have taken over my data cabling and (as of this morning) might as well have taken over my AV installs, so I might as well give them my budget and let them go ahead - they obviously know more than I do about IT.

 

Rant over.

[Aprice]

We've got a metered DB for the server room which covers AC as well as the racks in both comms rooms.

 

In the last week we've used 506 KWh. This is a medium sized secondary new build with a 2 host S2D setup.

 

I'm not sure what the electricity price is for schools / business , at 13p per KWh it would work out at £65 a week or £3,420 a Year, assuming that the load would be constant throughout the year.

 

Has anyone got any better information on what the cost per KWh is for your site?

 

Alex

[mrstrong]

does anyone mind posting what their schools spend annually on gas and electric ?

We are large primary, 600 pupils, found out it's currently £30,000 but forecast is 100% increase i.e. £60,000 !

 

edit: would be nice to have a breakdown of where this is being spent, e.g. heating, IT, boiling the kettle etc !

Edited April 8, 2022 by mrstrong

[mrstrong]

Yep, I'm following that thread

 

TBH premises have taken over my data cabling and (as of this morning) might as well have taken over my AV installs, so I might as well give them my budget and let them go ahead - they obviously know more than I do about IT.

 

Rant over.

 

I'd be happy! Our old head used to boast about coming in over summer hols to paint school to save money!

Used to get me to do cabling / AV installs which I was never happy/confident about, no training etc, remember

watching a youtube video to work out how to terminate cat 5 in patch panel!

[jmak]

We've got a metered DB for the server room which covers AC as well as the racks in both comms rooms.

 

In the last week we've used 506 KWh. This is a medium sized secondary new build with a 2 host S2D setup.

 

I'm not sure what the electricity price is for schools / business , at 13p per KWh it would work out at £65 a week or £3,420 a Year, assuming that the load would be constant throughout the year.

 

Has anyone got any better information on what the cost per KWh is for your site?

 

Alex

 

13p/unit?!

When does that fixed price run out?

 

Octopus business tariff is about 38p/unit

[Aprice]

Purely a guess, I suspect that was a big underestimate of the unit cost.

[dmj]

TLDR: It's cheaper to be 'cloud native' than migrate your current workloads. There are more benefits than cost.

 

I thought I'd add my 2p as I've been working in this area for some time now (the cloud bit, not electrical supply). I started moving workloads to the cloud back when I was working in schools, then at a University as part of a cloud migration project and now in the commercial world - so I'm familiar with some of the cost saving methods to employ.

 

Schools who've kept to the traditional windows server infrastructure are going to be paying more for cloud than those that took a Linux/containerisation approach because many of these windows-centric applications are stateful, monolithic and difficult to segregate. If you're scared of Linux enterprise applications it's going to cost more - not due to licensing but simply because Windows containerisation/orchestration is still catching up; some of the documentation is sketchy, there are fewer real world examples, it's harder to do and harder to get support. This means those with the more traditional windows server environments are not going to get the reliability and cost saving advantages such as automatically scale up under load, scale down in quiet times or be able to use the really cheap 'spot instances'. In other words, the infrastructure is not 'cloud native' so you're left with a 'lift and shift' approach of migrating on-premise servers to cloud - it's not the most efficient or effective use of resources.

 

That being said, even with traditional server infrastructure It's pretty simple to suspend a VM to RAM overnight when it's not in use. When you do this the cost goes down to zero (ok, you can't do it with Azure yet but GCP supports it) and even with Azure it's OK to shut down machines, so if the thought of migrating to ephemeral containers fills you with dread then there is always this approach combined with committed use discounts (the aforementioned methods can also benefit from CUD's - so there is a huge benefit to container orchestration)

 

It's also worth mentioning that the organisation will benefit from other things that cloud computing offers. One of the most useful for me at the moment is being able to spin up an exact replica of the production system in 20mins - It makes testing so much easier, costs virtually nothing as it's only online for a few hours at a time and massively improves reliability as there are no changes made on the live system until they've been deployed into the test environments. This also means I can spin up a new instance of the production environment in 20 mins too. Technically speaking you can do this on premise, but it's going to cost. Another feature I use regularly is point in time recovery for databases - it means I can replicate a database from any point (down to the second), not just for DR but also deploying test infrastructure scaling the databases across regions etc. I'm pretty sure our exposure to hackers encrypting data is reduced to how easy it is to recover old data versions too.

Edited April 13, 2022 by elsiegee40

[Roberto]

Schools who've kept to the traditional windows server infrastructure are going to be paying more for cloud than those that took a Linux/containerisation approach because many of these windows-centric applications are stateful, monolithic and difficult to segregate. If you're scared of Linux enterprise applications it's going to cost more - not due to licensing but simply because Windows containerisation/orchestration is still catching up;

 

I agree but I think even this misses the point somewhat: If we're talking 'cloud native' we need to be talking about SaaS. An AWS or Azure SQL DBaaS application is likely to be cheaper, more available and easier to manage again than a highly available SQL solution built around Linux VMs in the cloud.

 

We know that Exchange Online is cheaper than the equvilent Exchange environment built in the cloud (or on-prem imo) because it's SaaS rather than IaaS. Same applies to Google Mail vs. hosting a Linux email server in the cloud. All of this only becomes more intensive when you consider that as we move up the stack we're saving money on resources at every level.

[dmj]

I agree but I think even this misses the point somewhat: If we're talking 'cloud native' we need to be talking about SaaS. An AWS or Azure SQL DBaaS application is likely to be cheaper, more available and easier to manage again than a highly available SQL solution built around Linux VMs in the cloud.

 

 

I was talking about SaaS databases, infact I've not built a VM for a database in over 5 yrs, they are all SaaS. Come to think of it, I've done several email server migrations and they've all been to SaaS. Definitely leverage SaaS when you can, and move everything else to containers.

[mavhc]

If you move to a specific service provided by a cloud vendor you're locked in and stuck with whatever price rises they choose. At least with your own stuff you can hop from cloud to cloud and follow the best prices.

[nicholab]

It seems like the Edugeek cloud document needs a update. It also highlights why your MIS should be Saas based as then you don’t have to try and install SIMS on an Azure SQL instance.

 

With cloud provider you can do the on-site component AD server inside the cloud which i did not think about until going into the private sector. Also AVD is a great product as you can auto scale your remote hosts.

[Norphy]

If you move to a specific service provided by a cloud vendor you're locked in and stuck with whatever price rises they choose. At least with your own stuff you can hop from cloud to cloud and follow the best prices.

 

Maybe, but to use email as an example, I’m willing to bet that using Gmail or Office 365 is going to be cheaper than picking a cloud provider and paying for compute, storage and network charges from them. Plus I’m willing to bet that they’re better at securing email servers than you and I are. Similarly, I’d rather pay Bromcom/$OtherCloudMIS to do all that for me than host SIMS/Whatever in Azure/AWS. Lifting and shifting a service between cloud providers isn’t trivial either.

 

Frankly, IaaS and PaaS are both little more than a stopgap between on-prem and cloud services and anyone with any sense who wants to go cloud would migrate to SaaS as soon as is practical.

[Mr.Ben]

@Norphy

 

This is the exact approach that we take as a large Trust.

 

We have 4 systems that are not SaaS - Access Control,

Finance, HR and Salamander.

 

Those 4 systems, for just the IaaS parts (including virtual desktop to support 50 users) cost more than half of our M365 licencing bill (£25k for IaaS). In total it's about 11 servers.

 

When you add the £20/£30k licencing costs for some of those systems on top it moves into the same cost bracket as equivalent SaaS options (factoring technical time as well).

 

Our SaaS systems are much better value and the risk for us is significantly less (although still not insignificant given 3rd parties needs).

[dmj]

@Norphy

Those 4 systems, for just the IaaS parts (including virtual desktop to support 50 users) cost more than half of our M365 licencing bill (£25k for IaaS). In total it's about 11 servers.

This is exactly what I was talking about in my post earlier, getting those four systems running on containers means you'd power down to probably 1-2 servers, then ramp up as load increases.

[Mr.Ben]

@dmj The bigger problem I have is that if I was to use containers for the finance and HR systems, the vendors wouldn't support it and their staff most likely wouldn't understand it either when they have to troubleshoot.

 

Both systems have 0 public documentation and look like they were created in the noughties, and if even the most basic part is configured in what they describe as 'non standard' they don't touch it.

 

The HR software company even struggled to understand the idea of not having database, application and public web portal on separate servers, describing the idea of non domain joined webservers as 'non standard'

 

They are frustrating to deal with ....but..... the software is embedded and it will take a change of director(s) to address.

 

A good note for everyone on that - I have found it best to meticulously ensure that when bills are presented to schools, the Azure costs are split with a colum for each application (shared costs are split). It saves me lots of discussions on costs as these can be directed to the appropriate director, as the application is their choice.

Edited April 15, 2022 by Mr.Ben

[dmj]

I feel your pain.

I suppose the point here is that if the vendor understood their software well enough to support a container deployment , they would run it that way themselves and already be offering it as a SaaS.

[mavhc]

If they understood their software they'd have made a cloud version by now, it's been at least 10 years.

[Edu-IT]

does anyone mind posting what their schools spend annually on gas and electric ?

We are large primary, 600 pupils, found out it's currently £30,000 but forecast is 100% increase i.e. £60,000 !

 

edit: would be nice to have a breakdown of where this is being spent, e.g. heating, IT, boiling the kettle etc !

About £30000 with a roughly 60/40 split between Electricity and Gas.