US Currency fluctuations and running cloud instances.

Most of the cloud providers I have come across are based in the US. No such bad thing I know. My concern for a Eurozone or UK start up is the currency fluctations.

For example: Amazon EC2 instances are USD charged (prices calculated with Amazon's calculator).

Instance Type	Total Hours	Annual Cost (USD)	Cost at May 2008 ($2.00/£1)	Nov 2008 ($1.486)/£1)	Annual cost difference
Small Instance	8760 hr	$876	£438	£589.50	£151.50
Med Instance	8760 hr	$3504	£1752	£2358.00	£606.00
Large Instance	8760 hr	$7008	£3504	£4716.01	£1212.01

Obviously currencies will fluctuate daily but it is an eye opener for a UK start to see how much the costs incurred on a larger instance will be. This doesn't take into account anything like S3 storage or SQS charges. Even if you moved S3 storage to an euro based account you have transfer costs to take into account.

So, the likes of GoGrid, Aptana, Flexiscale and Amazon all charge in USD and make the case for Cloud in the UK a cost problem if you don't financially plan properly in the start up phases.

I know the costs are purely theoretical as the $2.00/£1 exchange rate was six months ago and it's steadily slid during the course of the year. If things continue in that trend and a $1/£1 exchange rate happened (stranger things have) the costs in the Eurozone and the UK will steadily increase.

If you take a UK company for example, a single instance in its most basic form, starts costing the following:

	Monthly USD	May	June	July	August	September	October
Small Instance	73.2	£36.99	£36.75	£36.95	£40.21	£41.21	£45.35
Med Instance	292.8	£147.96	£147.00	£147.78	£160.85	£164.85	£181.39
Large Instance	585.6	£295.92	£293.99	£295.56	£321.71	£329.69	£362.78

Learning Python and going with Google's AppEngine will start to appeal to small scale companies purely to exercise cost savings.

So what derailed Digital Railroad and could the clouds part?

Digital Railroad has provided the tech press with a wonderful set of railroad relate puns. Be prepared to see lots of, "hitting the buffers", "derailed" and the rest of it.

During October photographers were getting note that things were financially tough and were looking for additional funding, then out of the blue they then got note that they had until 31st October to get their assets of DRR's servers. The main page of the site now plainly says that DRR is under Diabolo Management who are talking to a potential buyer with over 25 years in the game. Rumour was that the company was Newscom, they were interested but declined.


What this does raise is in interesting question of how this could have been avoided. Firstly if a company runs out of cash then it runs out of cash so it doesn't matter if there's a Cloud infrastructure in place or not, if the money's not there then it's not there. DRR's press release heavily hints that the running of the servers. From an accounting standpoint where does $15 million go? Well there was sixty staff, no doubt rent to pay and that's before we get to the servers and electricity.





Could someone have turned the dial back and started looking at the alternatives a little earlier. Something scalable like Amazon S3 would have been a perfect use and would have saved on the overhead for fixed server storage. Keeping in mind that my full size pictures from my Fuju S5 Pro come out at a good 7/8Mb each you can start to understand the scale that DRR were working with. Some pro photographers were keeping 5000+ images on their servers.



Looking at the maths and a per photographer storage cloud seems a good idea. 8mb x 5000 is just over 39Gb. With a couple of gig transfer in and out you could do the lot for less than $10 a month. Seems to me that the likes of Smugmug and SendPortfolio got their pricing right.


The idea of a company like DRR or Alamy for that matter looking after my interests never appealed to me. I have always been in charge of my images and where I put them, plus the images I sell tends to be through private channels. What I'd like to see is a storage solution where I can put my images (S3) and then let the channels of my choosing (Alamy, Photoshelter, Getty and the rest) then point to my storage server. First of all it cuts down the huge server demand and storage on the suppliers and makes life a lot easier for the photographer. Metadata can be stored and, more importantly, queried. If it's been done then I'd love to know.



The first priority now is to make sure that photographers that are owed royalties from image sales are renumerated properly. As it stands that looks like it won't happen.