A virtual IT department: the database

Software as a Service, SaaS, seems like it is about to revolutionize how small and medium companies run their IT. Today, many small and medium businesses have really kludgy IT. There are a bunch of Windows desktops, and a few Windows servers for Exchange, SQL Server, a File Server, a domain server and perhaps a company web site, but that is likely to be a hosted site for small business. I think we will see Microsoft's dominance fracture as a result of SaaS. Today, consider how SaaS may effect SQL Server.

Small companies now have the option of running database services in the cloud. Using Amazon EC2, they can have a hosted data center with a 99.95% uptime in the SLA. Of course, this only works when the company has a working internet connection. Since Amazon is using Xen, you can find tools that will convert between Xen images and Amazon AMI files. For Debian Linux, that maverick James Gardner has blogged about this. So, you could set up a local server to host Xen and you could then have a piece of the cloud in your data center.

Running SQL Server is a costly proposition. Enterprise Edition is $25K per CPU. Microsoft is planning to upgrade on a 2-3 year cycle and they don't intend to support servers more than two generations old. So your $25K/CPU is recurring fee that will average around $5K/year per CPU. If you want, you can run SQL Server on Amazon EC2. There is a premium for this. Lets assume that you will need a large server. For Windows alone, this is $0.50 per hour fee. But adding SQL Server Standard will increase this to $2.20 per hour. For one year, a hosted SQL Server 2008 Standard Server instance works out to about $19K. This isn't crazy for a managed server, but it isn't a cost savings for most companies over running a Windows Server in-house. So why is there so much buzz about the cloud?

With a few changes, we can save a great deal of money. For the database engine, consider PostgreSQL. It is fast and stable. It has a carefully reviewed code base. There are drivers for ODBC, JDBC and ADO.Net, so your applications can still access data. Because PostgreSQL is open source, you can license it for $0. On Amazon EC2, you can run a medium service instance with Linux for $0.40 per hour. You can also take advantage of Reserved Instances. For $1,400 you can reserve a server instance for three years. This drops the per hour fee to $0.12 per hour. Three years now costs 4, 555.76. So for one year, a hosted PostgreSQL instance works out to to just under $1,520. The cloud loves open source.

To be fair, SQL Server also include SSIS, which allows for a variety of ETL services to be built and run via a GUI. I have been using Pentaho's Kettle for this. Pentaho has renamed this as Pentaho Data Integration. PDI can be downloaded for free. So, with PDI and PostgreSQL, you have the same basic functionality as SQL Server, it just saves $17,766.61 per year for a database server. You still get 99.95% data center uptime.

Note: I have not added S3 storage for archiving databases or transaction logs. This will increase costs, but for both servers.