Cloud May be Overpriced Compared to On-Premises Systems for Enterprise Video Deployments!

Cloud has been the buzz for the past several years in the video survellance market. Many analysts have predicted that on-premises video recording would go by the wayside, but we continue to see traditional video recording systems being viable.

Savvy architects and engineers are considering all their options.

We’ve long been comparing and contrasting cloud-based infrastructure with the infrastructure sold by traditional enterprise hardware and software players. However, some further information is starting to appear.

This last year we have seen a a 3.9% month-over-month decline in the cost of servers and storage, meaning that the hardware has gotten cheaper. At the same time, cloud services saw prices increase by 2.3% since the third quarter of 2022.

The reality is cloud video recording for the enterprise deployments may not be the slam dunk we once thought, at least in this moment.

It’s not just the cost

Of course, you should look at more than cost when considering any technology. For instance, open source software is free, but there are many times when you want to purchase expensive licenses because of the total value a specific technology can generate. This is the idea of being penny-wise and pound-foolish.

That said, if you compare apples to apples, such as video recording in the cloud versus video recording in the data center, the value that each type of technology can generate is relatively equal, but the prices are not. 

Public cloud computing prices have been creeping up because they are offered by for-profit companies that must generate a profit. Running a public cloud service is costly, and the billions invested over the past decade must show investors a return. That’s why prices have been increasing, not to mention the additional value cloud providers can offer, such as integrated AI.

At the same time, the cost of hardware, such as servers and traditional HDD storage, have significantly dropped in cost. On-Premise video recording continues to be a viable alternative to cloud-based storage systems. Thus, it’s not just a quick decision to pick cloud video recording over traditional hardware now.

What this means for enterprises

I’ve never trusted platform decisions that seem to have a religious undertone. I’ve seen people who are singularly devoted to open source, cloud, architectures (e.g., cloud-native and microservices), or other hype-driven trends. They’re putting feelings over the facts in many instances and could be buying technology that is not optimal for their specific use case.

Of course, you can fit a square peg in a round hole if you use a hammer. Poor architectural decisions are often overlooked, considering the end-state solution “works.” Of course, it may cost you $10 million more than a better-optimized solution, but perhaps nobody will notice. I’m seeing too many of these to count.

Again, this is about being entirely objective when looking at all potential solutions, including cloud and on-premises. Cost being equal, cloud computing will be the better choice nine times out of 10, but now that the prices are very different, that may not be the case.

If you’re the person making these calls, you must consider all aspects of these solutions, including future criteria. A particular solution could provide better business value over time, despite the higher cost. As I mentioned, there are many reasons to pick the more costly technology.

I suspect that the cost of traditional hardware will drop even further in the future, and the trade-offs between cloud video recrding and on-premises will become even more blurry. Determining the solution to bring the most value back to the business will take a lot of work.

This makes the role of an architect and engineer much more critical and emphasizes the need to make objective decisions. Based on the business case considerations, we’ll likely have more on-premises video systems than expected. I think that’s just fine as long as it’s the solution that brings the most value back to the business.