More evidence that scale is the name of the game in cloud computing

Resistance to cloud computing might not be futile, but it’s at least beginning to look foolish — especially as services from the top providers such as Amazon(s amzn) Web Services keep getting cheaper while their performance gets better. It’s also looking like smaller-scale or “enterprise” cloud platforms will have to promise some serious differentiation in order to justify their higher costs.
To highlight this trend, here’s a chart from publishing analytics startup graphing its IT spending from inception until early 2014.
The long story made short — but you can read the whole thing up through September 2013 here — is that started off using Rackspace(s rax) primarily and AWS for backup and a variety ad hoc workloads (e.g., Hadoop jobs). In 2012, it opted to cut costs by switching its primary analytic database to physical servers in a co-location center while continuing to run its cloud workloads primarily in Rackspace. In late 2013, it began transitioning more workloads to AWS and completed an entire transition to AWS in late February 2014.
After paying double (to both Rackspace and AWS) during the transition, is now paying less than monthly than it was before making the move. Its spending patterns might be unique because of the workloads it’s running, but they’re compelling nonetheless.
And, Co-founder and CTO Andrew Montalenti told me, there’s icing on this cake, as well: “What’s crazy is we got a speed-up and saved money.” The company’s primary analytics database is now running significantly faster on AWS SSD-backed instances than it did on bare metal (albeit hard-disk-backed) servers.
If recent claims from Google(s goog) about adjusting its pricing in accordance with Moore’s Law come true — and if its unique strategy around price reductions on long-running instances catches on — we should be in for continually lower prices on basic cloud computing services. AWS is the cloud king, but Google and Microsoft(S msft) are positioned as strong contenders, and if low costs are what wins users, they’ll all play along to ensure no one else owns that story. The same goes for improved performance and rapid feature updates.
More and more, it looks like the future of cloud computing will be renting the infrastructure that lets users operate like, well, Amazon, Google and Microsoft but at a fraction of the cost (and scale). We’ll hear a lot more about where the industry is heading at our Structure conference, which takes place June 18 and 19 in San Francisco, and features, among many others, Google’s Urs Hölzle, Amazon’s Werner Vogels and Microsoft’s Scott Guthrie.