What is Cloud Elasticity and How Does it Save Your Business Money

This sentence seems to be said in every list of advantages of the cloud. The shift away from physical servers and into the cloud brings a lot to the table, but money saved is the most important aspect for a lot of people. But how exactly does it save you money? It’s mainly thanks to one factor – elasticity. Let’s look at what it actually is and how can it help you save money.


  • 18. 11. 2015
  • 7 min read
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What is elasticity? The ability to adapt

Elasticity is one of cloud’s main attributes. Actual definitions may vary, but a rather accurate one is the description coined by scientists Herbst, Kounnev and Reussner from a technological institute in Karlsruhe, Germany. They define elasticity as “the degree to which a system is able to adapt to workload changes by provisioning and deprovisioning resources in an automatic manner, such that at each point in time the available resources match the current demand as closely as possible.”

It’s the ability of cloud to adapt to changing demands quickly and in just the right way, so that all the needs are met.

It means that when your cloud requirements change, it will adapt quickly and easily.

Do you need more performance for your online shop to cover the evening spike in traffic? You don’t have to worry about anything, thanks to elasticity the cloud will be ready to meet your requirements.

The cloud has a storage capacity and performance that is, theoretically, unlimited and can quickly adjust to increasing or decreasing requirements.

Physical servers’ performance, on the other hand, is firmly set by the chosen CPU, amount of memory, storage type and other factors. When it starts to waver, there are only two options.

Either you bite the bullet and stick with an inadequate hardware. However, this approach is not recommended by the experts from the Berkeley University. Because if the server cannot serve your clients – i.e. when the online shop or the website doesn’t load quickly enough or not at all – it can result in a permanent loss of customers.

The other option is to go ahead with an upgrade of the system. Which takes time. There’s a lot to do – search for appropriate components and for the best supplier, order the components and then install them.

The best solution is to migrate into the cloud. It rids you of all of these worries. When you need more performance, the provider just gives it to you. Almost immediately and without any problems at all.

This means that your provider can very quickly react to a change in your requirements and you can, thanks to virtualization, draw on almost unlimited resources. The cloud can be ‘stretched’ when needed – the provider will allocate more CPU cores, more memory or more storage capacity to your cloud. And it can ‘shrink’ just as well in times when you don’t actually need all the power. And why is elasticity so important for saving money? Let me give you an example.

Physical server upgrade: A bother that is not worth it

Let’s imagine a rather ordinary situation. There’s an online shop running in the cloud that is visited by a relatively stable number of customers. Average attendance per hour is, for example, a thousand visitors. But that is just an average of the demand – in the ‘peaks’, there might be three times the number of customers, while in the ‘troughs’ (e.g. around 3 a.m.) only a fraction of the clients want to visit the site. Even as few as a dozen.

If you’re using a physical server with a capacity to serve a thousand customers, then for most of the night it’s not using all of its performance. And on the other hand, it won’t be cutting it in the peaks, so you’ll need to account for that when building or ordering it, because you need a machine that can withstand three times the average demand. Otherwise there might be trouble – slow server response, non-reacting website and wasted sale opportunities.

You will be spending more money just to make sure that your services are always accessible. And it’s just a race against the clock. If your business is growing – and it should be – the average demand will, after some time, rise to the level of today’s peaks. And so you will end up upgrading your server again and again and still, the need for further increase of performance will catch up with you eventually.

Experts say: Cloud can save you money

The scientists from Berkeley described an example in their study. They asked readers to imagine a service that needs 500 servers during peaks but only 100 servers during the troughs. The average demand is 300 servers per hour and as such the total performance use is 300 x 24 = 7200 server-hours. But because you need to account for the peaks you will need to use 500 servers, so the total use will be 500 x 24 = 12000 server-hours. That is 1.7 times more than what is actually needed. When using physical servers, the client is paying for power he doesn’t really need for most of the day. In the cloud the performance adapts to the demand and saves customers’ money in the process.

This won’t ever happen with cloud. Thanks to elasticity, the performance can be very quickly scaled up or down according to how much of it is needed.

The rule of successful businesses: Don’t pay when you don’t have to

Why is it useful that the performance can be lowered as well? Because when combined with the pay-as-you-go model it saves significant amounts of money. In practice this means that you only pay for the performance you have actually used. Master DC offers this service under the moniker Live Server. When you use this form of billing, you are paying only for what you have actually used and are not wasting your resources. The savings acquired by migrating into cloud are then considerable.

The advantages of the cloud come from elasticity

There are three main advantages of cloud that stem from its elasticity.

First, it can shrink when in the troughs of demand, so you don’t have to pay for more performance than you need at the time.

Second, when peaks come, the elasticity ensures that you have the additional power you currently need.

And third, the bottom line is this: jumping into the cloud will save you a lot of money. If you still haven’t migrated, do so soon. According to a recent study, over 90 % of companies asked are already in the cloud. And some experts think that by 2020 the cloud will be used by all businesses.

Cloud Adoption Facts

Organizations using some form of cloud computing 93 %
Organizations using private cloud 63 %
Businesses with at least 1000 virtual machines in their cloud 22 %

Results of a State of the Cloud 2015 report by RightScale that polled 930 businesses.

Don’t lose the advantage in the fight for your market. Move into the cloud.

If you want to read more reasons why you should do so, read our blogpost about the advantages of cloud. And if any of your colleagues is afraid of the cloud, send him our article about how he should get over his fears.

Where are the other advantages of the cloud? Did you ever have to explain to someone how can it save them money? And why haven’t some companies migrated yet? Share your thoughts and leave us a comment.

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