Do You Own or Rent Your Home?

I’m always searching for different ways to communicate concepts. Ten years of delivering training will do that to you. Often a relatable metaphor can be very useful. We understand new concepts far more readily in terms of existing concepts. One metaphor that struck me recently addresses the difference between an enterprise IT solution and a cloud solution: it is very similar to the difference between owning a house and renting one. This should have been more obvious, since cloud is about renting someone else’s computer. Let me start by laying out a couple of scenarios, and then see if the metaphor stretches a little to less obvious ideas.

A newly married couple are looking for a first home. They have little cash (like any startup business) and so must rent. They move into a single-room apartment that is just large enough for the two of them. They have modest requirements, a modest cash flow, and a modest home at the start. After a few years, they start a family, so they rent a two-bedroom apartment. Hopefully, by now they are earning a little more, so they can afford the increased rent. The cost of moving from one apartment to another is fairly low, so when their needs change, they can easily move. As the children grow, the apartment feels small, so they rent a house in the suburbs, moving again when the need arises. Then when the children grow into adults, the house is too large. Now the couple moves to a smaller but nicer apartment. Each time their needs and financial state change, it is a simple matter to rent the home that they want. The cost of moving to new rented accommodations is relatively low, and a range of properties are available to rent.

Now imagine the couple are in a better financial state at the start, and perhaps live in a small town. They might buy a starter house at the beginning. When their first child comes along, they have the option to extend their home, building on a bedroom. If you own the house, you can change it to suit your needs. When the family grows, you can add more rooms or even a sleep-out for teenagers. The cost of buying and selling homes is high. There is far more reason to stay put and modify the home you own to suit your changing needs.

How does this relate to cloud thinking versus enterprise thinking? The main concept is that with cloud, you rent what you need right now. You look for the offering that suits your needs and make that offering work for you. When your needs change, you can move to a new offering that suits your new needs. With enterprise IT, you own the whole thing. You can change the house to suit your exact needs. When you own it, you can choose to take out walls or add on rooms so the house exactly suits your needs as those needs change.

I like metaphors that work in more than one dimension. The rent vs. buy metaphor also helps you understand how to use a cloud service. When you rent accommodations, you look at what is available and select from a list. You then make your life fit into the offered property. Maybe the apartment with the view you want is a few more bus stops away than you wanted. Similarly, when you use a cloud service, you make your application work inside the cloud service. The VM with enough RAM for your application may have far more disk capacity than you need. Your life, or application, fits into the rented resource, and you expect an imperfect fit. The offering will almost never be a perfect fit, but you make it work. For enterprise IT, we build something customized to accommodate our workload exactly. This is like building shelves into a house that you own. You make the bought resource fit your application, or workload, as closely as possible. As your needs change, you can modify the house, or infrastructure, that you own.

One place where this metaphor breaks down is with regard to residual value. A house you own usually holds its value, and you will get a better sale price if you improve the house. This is not the case with IT infrastructure. After a few years, even the best computer hardware will have almost no residual value. Maybe this metaphor would work better with cars than houses.