The downside of dedicated instances, aka the new hosting

With Amazon's new 'dedicated instances,' it's clear that enterprises are still looking to hug their servers now offers Dedicated Instances, with which administrators can now set up a private cloud using the Amazon VPC (Virtual Private Cloud) that contains server partitions that keep data in one physical location. Specific hardware resources are yours for the duration. They do not move processes and storage from server to server as clouds typically do when they support multitenancy and resource pooling.

This is nothing new. Back when I was CTO and CEO of cloud companies, customers often required that they have their own private server, typically for peace of mind and not because of a regulatory or security requirement. It used to be called hosting.

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I'm a little worried today to see hosting -- excuse me, "dedicated instances" -- growing as a cloud approach, as that could provide the wrong option for many enterprises.

The problem many have with cloud computing is that it flies in the face of direct control of IT resources. Thus, the reasons for not moving to public clouds are more about the people making the decisions rather than the functional requirements of the business. That's led to the popularity of private clouds, and now the ability to use brand-name public cloud computing providers as private clouds.

Private clouds, including the AWS Dedicated Instance offering, are a valid architectural approach in many enterprises. Many have to deal with compliance and regulatory issues, and they must keep their information and their servers under direct control.

However, I suspect many businesses are using them to punch their "I'm using cloud" tickets and not because they're the most cost-effective solution. Indeed, I suspect that many who use dedicated instances, whether from or elsewhere, are not parlaying the cost advantages that cloud computing should provide.

In running the numbers and considering the costs of dedicated cloud instances, I find that it's cheaper to keep your systems in the data center. In the case of dedicated instances, it's silly to go to the cloud.

This article, "The downside of dedicated instances, aka the new hosting," originally appeared at Read more of David Linthicum's Cloud Computing blog and track the latest developments in cloud computing at For the latest business technology news, follow on Twitter.

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