Hardware Purchase versus investing in Cloud Infrastructure

Advantages and Disadvantages of Purchasing Hardware vs. Using IaaS with AWS
1) Purchasing Own Hardware
Advantages

• Full Control: Owning hardware provides complete control over the infrastructure, including hardware configurations, security protocols, and custom software installations. This can be advantageous for businesses with specific performance or compliance requirements.
• Cost Predictability: After the initial investment, ongoing costs are generally predictable, limited to maintenance, electricity, and occasional hardware upgrades.
• Data Security and Privacy: Physical control over hardware ensures sensitive data is managed in-house, which can meet strict regulatory or internal security standards.
• Customization: Businesses can tailor hardware setups to meet unique needs without being constrained by vendor specifications.

Disadvantages

• High Upfront Costs: Purchasing hardware requires significant capital expenditure (CAPEX), which can strain cash flow, particularly for smaller businesses.
• Maintenance Burden: Companies are responsible for maintaining and upgrading hardware, which can involve downtime, additional staffing, and unanticipated costs.
• Scalability Challenges: Scaling operations requires purchasing and integrating additional hardware, which can be time-consuming and may lead to underutilized resources during non-peak times.
• Risk of Obsolescence: Technology evolves rapidly, meaning owned hardware may become outdated, requiring reinvestment to stay competitive.

2) Using IaaS with AWS
Advantages

• Scalability and Flexibility: AWS enables businesses to scale resources up or down on demand, providing flexibility to handle fluctuating workloads without additional hardware investments.
• Cost Efficiency: With a pay-as-you-go model, businesses only pay for the resources they use, avoiding the large upfront costs associated with purchasing hardware.
• Reduced Maintenance: AWS handles hardware maintenance, updates, and physical security, allowing businesses to focus on their core competencies rather than infrastructure management.
• Global Reach: AWS provides access to a global network of data centers, enabling businesses to deploy applications and services closer to their customers worldwide for improved performance.

Disadvantages

• Operational Dependency: Businesses relying on AWS are subject to the availability and reliability of AWS services. Outages or service disruptions can impact operations.
• Recurring Costs: While CAPEX is avoided, operational expenditure (OPEX) can grow significantly over time, especially for businesses with constant high-resource requirements.
• Data Privacy Concerns: Storing data on cloud infrastructure managed by a third party may raise security and compliance concerns, particularly in industries with strict regulations.
• Limited Customization: While flexible, AWS configurations are bounded by its service offerings, potentially limiting certain highly specialized use cases.

In summary, choosing between purchasing hardware and using AWS depends on factors such as budget, scalability needs, security requirements, and the desired level of control. While AWS offers flexibility and cost efficiency for many, owning hardware remains beneficial for businesses with specific, long-term infrastructure needs.

The number of variables effecting hardware design and choice for e-business solutions can be overwhelming. Indeed, because it's impossible to know how successful an e-business solution might be, or how it might evolve, hardware design is really more of an art than a science. There are several considerations regarding hardware design and choice, however, which apply to practically every e-business initiative. The table below has a list of the questions you should consider before adopting any hardware. In the column to the right of the question, you will find an explanation for why these questions are so important:
Hardware Considerations

Question to consider	Explanation
Do you have control over the client community for an e-business solution?	If developing a B2C solution, you will have virtually no control over client hardware; your end-user is anyone on the Internet. ForB2B solutions and intranet applications you may have some influence over client hardware, especially if dealing with new companies or new divisions, or with applications requiring handheld devices. In these situations, try to achieve a balance between price, performance, reliability, and support.
Is it easy to upgrade your servers?	This is where reliability and scalability come in. Can your server hardware choice facilitate growth as your company and e-business needs grow? Does your server design offer linear scalability (by adding a second server to a single server environment, you double capacity) or something similar? Can your supplier support emergency demand? Can you integrate your server's capacity with that of third parties (like ISPs and ASPs)? ISP: An organization that provides access to the Internet. Small Internet service providers (ISPs) provide service via modem and ISDN while the larger ones also offer private line hookups (T1 or fractional T1). Customers are generally billed a fixed rate per month, but other charges may apply. For a fee, a Web site can be created and maintained on the ISP\'s server, allowing the smaller organization to have a presence on the Web with its own domain name. ASPs: A hosted applications solution that the buying organization does not need to install any new server hardware; it is a form of applications outsourcing.
What are your solution's multimedia requirements?	Some e-business solutions make extensive use of multimedia, like streaming video, audio, high-resolution graphics, and so on. If an important part of your solution is rich multimedia, specialized hardware selections will be required.
Has your company already made a commitment to or does prefer specific software architectures, vendors, or brands?	Some companies have already made such commitments. For example, some companies have committed to being "Microsoft" or "Unix" or "IBM" shops. Such commitments directly influence hardware buying decisions. If your company uses only Windows 2000 as a server operating system, you will not be able to purchase Sun Microsystem's hardware for your servers. In some cases, you may need to challenge the corporate standard.

Hardware Purchase and Implementation

Figure 4.3 Abstract view of the components of a computer system.