Is having server in a cloud worth it?

Recently my friend asked me this after checking some cloud computing providers. He said that at first it seemed like really inexpensive solution to run, but after calculating the bandwidth price he started having second thoughts.
Actually, most dedicated solutions include pretty large bandwidth for affordable price, so, what would be the reason someone would prefer a cloud server to other hosting solutions?

I can tell you my own reasons for migrating my physical, co-located servers to cloud.

For easier understanding I’ll give you some background of my activities. I’ve been in web design and development since 1996 and as an integral part of the service I almost always provided the hosting services. During all these years I had very few unpleasant situations with my clients, and those were always caused by infrastructure problems (problems connected with hosting resources). We have never had any problems regarding our work regardless of it being web application development, web design, web site development or any other type of developing web content.

After exploring various solutions (and various providers for every single solution) we finally decided to go with cloud server instances and here are our reasons:

Hardware stability – unlike dedicated servers, cloud server instances are not hosted on a single physical machine, but rather on a server farm, which makes it highly fault-tolerant. When something goes wrong with your dedicated server’s hardware, your server is down until you (or someone else) repair the failure. On the other hand, when the hardware running your server instance fails, the cloud itself takes care of restarting your instance on some other hardware on the same server farm. Most of the systems are designed to sustain simultaneous multiple failures at hardware level including CPU, storage, network and power.

Redundancy of stored data – your server image is stored on redundant storage servers with huge storage space ready for instant use. This kind of storage ensures that your server instance and your data will be fully accessible even after multiple hard drive failures. Also, most of the systems include very simple and easy to use backup systems that keep your data safe without overloading your CPU or HDD.

Speed – this is completely based on my own experience and it can be different in other cases, but all of my programs and web scripts work much faster on a cloud server than on a dedicated server with same resources (CPU/Memory/Network). Needless to say, the connection speed is awesome and you might even want to limit it because of outbound bandwidth costs.

Simplicity of upgrading server resources (memory, storage, CPU) on the fly – one of the most annoying tasks that I had to do during these years of providing hosting resources for my clients was server upgrading. Actually in my case it was every two to three years that I had to migrate my server to newer, better and more advanced hardware. Based on my experience, you can never prepare yourself to all possible frustrating failures, incompatibilities and other things that make migration a nightmare. With cloud, upgrading server resources is as difficult as filling the form, so you have the ability to start small and grow with demand in real-time, keeping your costs at minimum.

So, I would not say that cloud computing is the best and cheapest solution for all your server-related needs, but I am saying that cloud computing has many advantages over physical servers and in some cases it is the only solution that works.