Cloud Storage Cost

Why is Cloud Storage More Expensive than External Hard Disks?

Microsoft Azure’s Blob Cloud Storage price varies somewhere between INR 1.01 and INR 3.31 per Gigabyte per month. So if you extrapolate, 10 Terabytes would cost between INR 10,340 and INR 33,890 per month. By contrast, an external hard drive of 1-Terabyte capacity would cost around INR 3,800 to buy on Amazon.in 

So 10 TB of hard drives would probably cost: INR 38,000 one time.

So, why is Cloud Storage so Expensive?

In order to provide 1 TB of storage in a production grade environment, you would have to make the below expenses, at a minimum. This assumes you already have a secure building with a room for storing your servers:

(Total Monthly Average for Up Front purchases is calculated assuming a 5 year use period).

Item Upfront Cost of Purchase Total Monthly Average Cost Monthly Average Cost per GB
Main Hard Disk 38,000 633.33 0.062
Redundant Hard Disk 38,000 633.33 0.062
Server to Host Those Hard Disks 300,000 5,000 0.488
Data Centre Air Conditioners 40,000 666.67 0.065
Data Centre Cabling and Racking 20,000 333.33 0.033
Data Centre Access Control and Security Alarms 40,000 666.67 0.065
Strong Internet Connection – 100 Mbps Leased Line 50,000 4.882
Security Guards 20,000 1.953
Software Engineer to Manage the Server 50,000 4.882
Electricity Bills 10,000 0.98
Server Software (Windows, Citrix, VM Ware etc.) 100,000 1,666.67 1.63
Management Overhead (Accounts, HR, CTO etc.) 10,000 0.98
Total INR 16.08

So, we can see that the price per GB to have the most basic setup for a production ready environment that stores 10 TB data, will cost at least INR 16.08 per GB per month. It would cost much more if you don’t already have a safe room where you can house your servers More cost is added when an application like a Document Management System is running, which needs more space for storing incremental backups, search indexes and system files.

This is almost 16 times as expensive as Cloud Storage!

Simply comparing the cost of an external hard drive to the cost of cloud storage is not correct. One must compare the cost of managing that hard drive in a production grade data centre, with the cost of cloud storage.

{Attribution: In this post we have drawn upon comments by folks on this quora thread: https://www.quora.com/Why-is-cloud-storage-so-expensive}