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So everyone says the cloud is the future. I get it. But is this the truth, or what all the tech giants want people to believe? Don your foil hats for a moment a

So everyone says the cloud is the future. I get it. But is this the truth, or what all the tech giants want people to believe? Don your foil hats for a moment and listen to me. All the original internet companies run their own hardware. They rent out excess production capacity to us peons in the form of cloud services. These companies that all run their own hardware exclusively are telling everyone that it's stupid to run your own hardware... Why are we listening? Look to the newer tech giants as a prequel of what's to come. Netflix for example, is completely at the mercy of Amazon. They might as well be "Netflix brought to you by Amazon". Their edge is in software alone, nothing that causes a huge barrier to entry like custom hardware. This makes them much easier to dethrone. Hilariously, they rent all their hardware from a direct competitor who has access to all their software secrets. Does anyone else see something wrong with this? The cloud as a money saving venture is and always has been a damn lie. It's the same tactic as when automotive companies paid off local governments to destroy Americas public transport many years ago. All the big tech companies have their hands in the cookie jar besides Facebook, who remains mostly silent but runs their own hardware as well. The major tech companies have every incentive to make you think running your own servers is nigh impossible. Don't drink the fucking koolaid. If the industry continues to consolidate rapidly AmaGooSoft will be the ONLY places you can have web servers in ten years

clarkmoody 10y ago
Don't forget to take the tinfoil off when you're done ;-) What are some examples of companies that started in the cloud then switched to their own metal? Surely there are some blog posts about costs before & after?
- tomkinstinch 10y ago
  Dropbox switched from S3 to their own in-house hardware: https://www.wired.com/2016/03/epic-story-dropboxs-exodus-amazon-cloud-empire/ https://www.wired.com/2016/03/epic-story-dropboxs-exodus-ama...
lbotos 10y ago
I mean, sure, you might not save money being in the "cloud" but running hardware is a different skillset than building software. If you can pay someone else to run your hardware, someone else who wants to be really good at running hardware, you might be able to focus more on your software, and get really good at making that?
- tbrowbdidnso 10y ago
  There is nothing hard about running hardware. The current VM trend gives you bare metal access. the only difference is you have to plug in your machines, and you get to look at them every once in a while. Really, what software dev hasn't put together a desktop PC and plugged in some Ethernet jacks? That's all you need to Colocate. Your response echos what cloud providers want everyone to think. Hardware is too hard for us, let's pay someone to do it and make 50% profit margins on us
  - morgante 10y ago
    I'm sorry, but your comments in this thread are incredibly out of touch. It's absolutely hard to run your own hardware. There's a reason that companies which run their own hardware have entire teams devoted to it. You seem to be thinking like an engineer, not a business person. For most businesses, cloud providers offer a substantial cost savings.
    - tbrowbdidnso 10y ago
      I know it's a controversial opinion. And probably not even true in a lot of cases... but I'm glad it sounds like I'm out in left field. The echo chamber needs a devil's advocate and sometimes the resulting discussion gets interesting enough that I question my original beliefs. In this case I believe owning my hardware is cheaper for me because I already do. I might be a rarity though, or just old fashioned and wrong
      - morgante 10y ago
        Your opinion isn't really that original. There are plenty of old-school sysadmins who will insist that the cloud is a hoax. They'll fight tooth and nail to avoid it. Eventually, someone fires them and moves to the cloud with significant savings. There are some scenarios where it makes sense to run bare metal, but they're few and far between. If you've evaluated the (capital, operational, and human) costs of cloud vs. bare metal and bare metal came out on top, that's fine. But don't assume that other mature businesses haven't also done so. For companies with AWS bills less than $10k/m, it'd be ludicrous to even consider bare metal.
closeparen 10y ago
I don't think it's in doubt that it makes sense to own everything from the land to the silicon when you're the size of one of these "original internet companies." The question is, does it make sense for businesses with a handful of servers running their office environment, to a few thousand servers running production for a moderately popular web service, to pay consultants to drive out and tend the servers in their office closets/colo racks, rather than piggy-back on someone else's (mostly) well-oiled machine with economies of scale. If you can build an in-house equivalent of the AWS team, do it. If you're going to pay someone to do it for you, AWS might be a better deal than your neighborhood business IT firm.
- tbrowbdidnso 10y ago
  Running on rented hardware is the equivalent of a traditional product company renting all of their factories. Almost any company of reasonable size will want vertical integration of their supply chain and web companies are no different. Using Netflix as an example again, if they're pitted against a company that runs their own hardware but is otherwise equal, they will lose. A portion of their profit is siphoned off as Amazon's profit. What's already happened is Netflix is directly funding development of Amazon Prime Video.
  - endisukaj 10y ago
    If they used their own hardware a good portion of their profit would go to maintain that very same hardware. And because they would build that infrastructure from scratch it would cost even more to set up.
  - sithadmin 10y ago
    >Almost any company of reasonable size will want vertical integration of their supply chain Meanwhile, the most successful hardware vendors are all farming production out to third party manufacturers...
  - nnutter 10y ago
    Does Apple own any factories?
dsr_ 10y ago
The cloud isn't a money-saving tactic. It enables you to test demand for a service for a very low absolute cost. Spin up a tiny machine for $60/year? And you can pay for it by the month, or the hour? That's great. You can find out if anybody is going to buy your thing at all. You can probably get to ramen-profitable. As soon as you can confidently predict sufficient demand, the economically rational decision is to hire a good ops team and run real hardware. But to do so, you need to either have money or get money - and the costs of cloud service are zooming up, potentially leaving you without the margin to invest. The question is what that level of sufficient demand is.
- morgante 10y ago
  > and the costs of cloud service are zooming up, potentially leaving you without the margin to invest. What do you mean by this, because it sounds like a straight up lie? Amazon and Google are in an ongoing price war and cut costs regularly.
  - tbrowbdidnso 10y ago
    Possibly outgoing bandwidth. These costs are directly proportional to traffic and regularly 20-30x the unmetered rate for a colocated box
    - morgante 10y ago
      Yes, cloud bandwidth is expensive. I don't disagree with that. But it's not increasing in price. Obviously if you're growing your costs will grow, but that's basically a tautology. Bare metal costs also rise as you grow.
      - dsr_ 10y ago
        Will you stop calling me a liar if I correct that from "the costs" to "your costs"? I am assuming that you are growing, and I think there's a provable assumption that for high levels of service, hiring someone else to do it is more expensive than in-house.
protomyth 10y ago
I agree with your overall point, but it was my understanding that Netflix does use Netflix but runs its own CDN with FreeBSD machines some of which are located at the local ISP.
mbesto 10y ago
This is incredibly misguided. > The cloud as a money saving venture is and always has been a damn lie. I personally have conducted migration savings assessments for companies going from data centers (owned/lease hardware) to cloud services. I can tell you with 100% certainty that the savings are there and have seen financial proof of the savings. It's either that, or I'm a liar.
- praneshp 10y ago
  Hey, you are a liar. He is very sure that the cloud saving money has always been a damn lie! To hell with your data. /s
  - throwaway2048 10y ago
    what data?
    - praneshp 10y ago
      "I can tell you with 100% certainty that the savings are there and have seen financial proof of the savings.". My attempted joke wouldn't make sense outside of this context
- neurostimulant 10y ago
  Care to share more details? On paper, the cost differences between renting/colocating traditional dedicated servers and using cloud service with similar performance/capacity is huge, so it's pretty unusual to actually save money by migrating to cloud. I'd love to hear where the savings actually come from.
  - tetha 10y ago
    My company has done some research on that, in the webscale bubble. It is wrong to think of the divide as "Cloud" vs "Bare Metal" in a VM for server thing. Disregarding up-front investment, you're comparing rented VMs in the cloud with bare metal boxes, datacenter costs, and most important, manpower. At a small scale, you're paying the cloud less than 2 or 3 competent admins with datacenter and networking experience cost for salary. In that situation, you're saving money, because you're saving the hardware ops team. You're paying more dollars per iop, core and GB of ram, but the alternate method of obtaining these resources has more surrounding costs than "ze cloud". On the other hand, once you're shoveling several hundred kilo-dollars per month to a cloud provider, it makes sense to throw a million or 10 at dell and hire those operators, because it will save money within a year or two. This only makes sense if you need the resources, but if you need those resources, it helps being more efficient.
mcgoo 10y ago
Netflix has edge caching deployed at "thousands of ISPs worldwide." https://media.netflix.com/en/company-blog/how-netflix-works-with-isps-around-the-globe-to-deliver-a-great-viewing-experience https://media.netflix.com/en/company-blog/how-netflix-works-...
scott_s 10y ago
The actual streaming video from Netflix does not come from Amazon's systems. From https://arstechnica.com/information-technology/2016/02/netflix-finishes-its-massive-migration-to-the-amazon-cloud/ https://arstechnica.com/information-technology/2016/02/netfl..., "Netflix operates its own content delivery network (CDN) called Open Connect. Netflix manages Open Connect from Amazon, but the storage boxes holding videos that stream to your house or mobile device are all located in data centers within Internet service providers' networks or at Internet exchange points, facilities where major network operators exchange traffic. Netflix distributes traffic directly to Comcast, Verizon, AT&T, and other big network operators at these exchange points." Everything else - such as the Netflix UI, your account management, billing, etc - is on Amazon. But Netflix has an enormous amount of hardware distributed around the world. If you wanted to compete with Netflix, you would need to do a lot more than uses Amazon's cloud services.
- true_religion 10y ago
  > If you wanted to compete with Netflix, you would need to do a lot more than uses Amazon's cloud services. Yes you'd need multi-million dollar contracts with all of the major studios. Netflix isn't as much a technical problem as it is a business problem. HBO has a far worse network, UI, and technology in general but its still competitive simply because it has Game of Thrones and other shows.
  - cookiecaper 10y ago
    Scratch business problem, replace with "legal problem". Copyright law makes it virtually impossible to compete with Netflix. Netflix was only allowed to start because they wedged their way in as a rent-by-mail service. After pioneering streaming and realizing that the studios were asking themselves why they don't just load up their own computers with movies and get paid to stream them out, Netflix was forced to start its own content division to keep subscribers onboard and prevent the studios from poaching all of their customers by failing to renew contracts for content. We have a similar problem in online services. It's impossible to compete with Facebook because the law allows them to hold data hostage. We badly need copyright reform. The current incarnation is impractical in the digital age.
random28345 10y ago
> [Netflix's] edge is in software alone, nothing that causes a huge barrier to entry like custom hardware. Actually, they are a media company. Their "edge" is in content creation and licencing deals. They might have been first-to-market for mass-scale streaming, but streaming video technology is a commodity, and they know that they will live or die by the desirability of their media catalog. > Netflix for example, is completely at the mercy of Amazon. Amazon and Netflix were symbiotic for years, as Netflix was a headline corporate customer, and I'm sure they received preferential pricing. And given the quality of Netflix's engineering team, I would be very surprised if they don't have a plan to migrate by the expiration of their contract if necessary.
- em3rgent0rdr 10y ago
  > "Actually, [Netflix is] a media company. Their "edge" is in content creation and licencing deals..." That's only partly true. But if you considering a lot of other "media companies" haven't been able to compete with Netflix's ease of use, then you have to ask the question how is Netflix different from any other media company. And the answer is because they are also a software company, where their successes is primarily attributed to making DRM video in browser easy and seamless for average folk.
- chetanahuja 10y ago
  This answer is in the same category as "Actually, Google is an ads company". That is to say, it makes a plausible case but ultimately wrong. The original success of Netflix depended on being the first company with a fixed-price-no-ads streaming business model in addition to really good user experience across a wide variety of platforms. I remember being astonished at watching a Netflix movie on my iPhone (when I was still an iPhone user) while riding a train in 2011'ish. It was miles ahead of any other competitor in providing solid, usable clients on multiple platforms combined with reliable streaming in most cases and networks. This was as much a triumph of technology and product design as it was of the content available. If it was only about the content, it would be Hulu (at least in US) instead of Netflix who would be in pole position today.
  - 10y ago
amorphid 10y ago
I don't know that I'd say Netflix is completely at the mercy of Amazon. Sure, if AWS goes down, Netflix goes down. But that would be true enough for they ran all of their own stuff, too... "Netflix is completely at the mercy of their ops team". One of the big points of the cloud is that is gives one the ability to do things that one would trouble doing without the cloud. A small business with a single part-time developer can deploy an app to Heroku, and not need an ops person. That sure beats the heck out of the small business not being able to deploy software at all. As a former small biz owner, I did not want to have to manage a bare metal server in a colocation rack with a not-cheap data pipe. I just wanted a CRUD app with a minimal feature set. When Heroku went down, I sat around wishing it would come back up, and eventually it did. That was way better than having to service a physical box when it failed. Heroku cost me a few hundred a month, and freed me up to earn much more than that. In my eyes, it paid for itself many times over.
- motoboi 10y ago
  > Sure, if AWS goes down, Netflix goes down. Well. AWS went down (part of it), but Netflix stayed alive.
- hueving 10y ago
  >But that would be true enough for they ran all of their own stuff, too... "Netflix is completely at the mercy of their ops team". They employ their ops team and their ops team has equity stake in the company's success as well as their career riding on the line. If a chunk of Amazon goes down and takes out your website, all you can do is wait and hope Amazon is prioritizing the fix. >When Heroku went down, I sat around wishing it would come back up, and eventually it did. This method of recovery just doesn't cut it in businesses with lots of transactions 24/7. Just sitting around can be flushing thousands per minute down the drain. In those deployments, you need to build across multiple cloud providers; and once you've reached that abstraction, you might as well have your own hardware as well and just burst to providers. A company like Netflix can get by because they have their own hardware for streaming so an outage only affects people browsing for a movie at the time. And on top of that, their only interactive transaction is signing up for the service, which is extremely infrequent compared to the rest of the traffic. So essentially it's safe for Netflix to use AWS because they don't need high reliability/control of their own destiny. >A small business with a single part-time developer can deploy an app to Heroku, and not need an ops person. This use case I understand. However, anything at the scale that is frequently discussed in these contexts (gitlab, etc), they need ops people.
badloginagain 10y ago
The article has some really good points why being in the cloud is a good idea. GitLabs core competencies are in software, not hardware- similar to many startups. Sure, they could hire up an infrastructure team, but that's at an opportunity cost of their software team. The cloud offers convenience that all the `original internet companies` wish they had when they were starting out. There may be value in switching when you hit a certain scale, companies like Netflix will have already done cost-benefit analysis to that degree. But it's a massive undertaking that introduces substantial risk for long periods of time. Many companies are just not in a position to do that.
- synicalx 10y ago
  I think their recent cock up is a great example of why they need an ops team regardless of whether or not they're in the cloud.
- stephenr 10y ago
  > Sure, they could hire up an infrastructure team Their original proposal on bare metal was for 64 servers. They need an ops team regardless of whether they control the hardware or not.
emodendroket 10y ago
The thing is that at the small to medium scale running your own servers just isn't cost-effective. It's the same principle that leads smaller companies to outsource services like IT.
RaleyField 10y ago
It's a conspiracy, got you.
mikekchar 10y ago
> The cloud as a money saving venture is and always has been a damn lie. When you are in business, saving money is not always the most important thing. In reality, you usually spend 95% of your revenue. The question is not "How much money can we save", but "What investment will bring the greatest return". It's a bit like buying the building that you are working in rather than renting it. Or hiring full time cleaning staff rather than hiring a firm to take care of it. The second choice is more expensive, but requires less capital/time up front. If you can use that money and time to better effect then it is a no brainer. As companies get bigger, they have less opportunities to make large returns on their money/time, so it often makes sense to start focusing on those smaller returns. As an aside, this is also why you shouldn't go to your CTO and say, "I can save $X by refactoring/rewriting/testing our code". The CTO can usually always find things that appear to be better ROI opportunities and so you get into a situation where refactoring/rewriting/testing becomes forbidden. Rather you should always attempt to use appropriate techniques to maximise throughput in development and to keep your stake holders happy.
mablap 10y ago
So if I understand you correctly, if I need an appendectomy I shouldn't consult a doctor, but rather open up an anatomy book and do the procedure myself?
StreamBright 10y ago
>> All the original internet companies run their own hardware Exactly and most of the companies are not original internet companies, and they use the cloud.

clarkmoody 10y ago

Don't forget to take the tinfoil off when you're done ;-) What are some examples of companies that started in the cloud then switched to their own metal? Surely there are some blog posts about costs before & after?

tomkinstinch 10y ago
Dropbox switched from S3 to their own in-house hardware: https://www.wired.com/2016/03/epic-story-dropboxs-exodus-amazon-cloud-empire/ https://www.wired.com/2016/03/epic-story-dropboxs-exodus-ama...

lbotos 10y ago

I mean, sure, you might not save money being in the "cloud" but running hardware is a different skillset than building software. If you can pay someone else to run your hardware, someone else who wants to be really good at running hardware, you might be able to focus more on your software, and get really good at making that?

tbrowbdidnso 10y ago
There is nothing hard about running hardware. The current VM trend gives you bare metal access. the only difference is you have to plug in your machines, and you get to look at them every once in a while. Really, what software dev hasn't put together a desktop PC and plugged in some Ethernet jacks? That's all you need to Colocate. Your response echos what cloud providers want everyone to think. Hardware is too hard for us, let's pay someone to do it and make 50% profit margins on us
- morgante 10y ago
  I'm sorry, but your comments in this thread are incredibly out of touch. It's absolutely hard to run your own hardware. There's a reason that companies which run their own hardware have entire teams devoted to it. You seem to be thinking like an engineer, not a business person. For most businesses, cloud providers offer a substantial cost savings.
  - tbrowbdidnso 10y ago
    I know it's a controversial opinion. And probably not even true in a lot of cases... but I'm glad it sounds like I'm out in left field. The echo chamber needs a devil's advocate and sometimes the resulting discussion gets interesting enough that I question my original beliefs. In this case I believe owning my hardware is cheaper for me because I already do. I might be a rarity though, or just old fashioned and wrong
    - morgante 10y ago
      Your opinion isn't really that original. There are plenty of old-school sysadmins who will insist that the cloud is a hoax. They'll fight tooth and nail to avoid it. Eventually, someone fires them and moves to the cloud with significant savings. There are some scenarios where it makes sense to run bare metal, but they're few and far between. If you've evaluated the (capital, operational, and human) costs of cloud vs. bare metal and bare metal came out on top, that's fine. But don't assume that other mature businesses haven't also done so. For companies with AWS bills less than $10k/m, it'd be ludicrous to even consider bare metal.

closeparen 10y ago

I don't think it's in doubt that it makes sense to own everything from the land to the silicon when you're the size of one of these "original internet companies." The question is, does it make sense for businesses with a handful of servers running their office environment, to a few thousand servers running production for a moderately popular web service, to pay consultants to drive out and tend the servers in their office closets/colo racks, rather than piggy-back on someone else's (mostly) well-oiled machine with economies of scale. If you can build an in-house equivalent of the AWS team, do it. If you're going to pay someone to do it for you, AWS might be a better deal than your neighborhood business IT firm.

tbrowbdidnso 10y ago
Running on rented hardware is the equivalent of a traditional product company renting all of their factories. Almost any company of reasonable size will want vertical integration of their supply chain and web companies are no different. Using Netflix as an example again, if they're pitted against a company that runs their own hardware but is otherwise equal, they will lose. A portion of their profit is siphoned off as Amazon's profit. What's already happened is Netflix is directly funding development of Amazon Prime Video.
- endisukaj 10y ago
  If they used their own hardware a good portion of their profit would go to maintain that very same hardware. And because they would build that infrastructure from scratch it would cost even more to set up.
- sithadmin 10y ago
  >Almost any company of reasonable size will want vertical integration of their supply chain Meanwhile, the most successful hardware vendors are all farming production out to third party manufacturers...
- nnutter 10y ago
  Does Apple own any factories?

dsr_ 10y ago

The cloud isn't a money-saving tactic. It enables you to test demand for a service for a very low absolute cost. Spin up a tiny machine for $60/year? And you can pay for it by the month, or the hour? That's great. You can find out if anybody is going to buy your thing at all. You can probably get to ramen-profitable. As soon as you can confidently predict sufficient demand, the economically rational decision is to hire a good ops team and run real hardware. But to do so, you need to either have money or get money - and the costs of cloud service are zooming up, potentially leaving you without the margin to invest. The question is what that level of sufficient demand is.

morgante 10y ago
> and the costs of cloud service are zooming up, potentially leaving you without the margin to invest. What do you mean by this, because it sounds like a straight up lie? Amazon and Google are in an ongoing price war and cut costs regularly.
- tbrowbdidnso 10y ago
  Possibly outgoing bandwidth. These costs are directly proportional to traffic and regularly 20-30x the unmetered rate for a colocated box
  - morgante 10y ago
    Yes, cloud bandwidth is expensive. I don't disagree with that. But it's not increasing in price. Obviously if you're growing your costs will grow, but that's basically a tautology. Bare metal costs also rise as you grow.
    - dsr_ 10y ago
      Will you stop calling me a liar if I correct that from "the costs" to "your costs"? I am assuming that you are growing, and I think there's a provable assumption that for high levels of service, hiring someone else to do it is more expensive than in-house.

protomyth 10y ago

I agree with your overall point, but it was my understanding that Netflix does use Netflix but runs its own CDN with FreeBSD machines some of which are located at the local ISP.

mbesto 10y ago

This is incredibly misguided. > The cloud as a money saving venture is and always has been a damn lie. I personally have conducted migration savings assessments for companies going from data centers (owned/lease hardware) to cloud services. I can tell you with 100% certainty that the savings are there and have seen financial proof of the savings. It's either that, or I'm a liar.

praneshp 10y ago
Hey, you are a liar. He is very sure that the cloud saving money has always been a damn lie! To hell with your data. /s
- throwaway2048 10y ago
  what data?
  - praneshp 10y ago
    "I can tell you with 100% certainty that the savings are there and have seen financial proof of the savings.". My attempted joke wouldn't make sense outside of this context
neurostimulant 10y ago
Care to share more details? On paper, the cost differences between renting/colocating traditional dedicated servers and using cloud service with similar performance/capacity is huge, so it's pretty unusual to actually save money by migrating to cloud. I'd love to hear where the savings actually come from.
- tetha 10y ago
  My company has done some research on that, in the webscale bubble. It is wrong to think of the divide as "Cloud" vs "Bare Metal" in a VM for server thing. Disregarding up-front investment, you're comparing rented VMs in the cloud with bare metal boxes, datacenter costs, and most important, manpower. At a small scale, you're paying the cloud less than 2 or 3 competent admins with datacenter and networking experience cost for salary. In that situation, you're saving money, because you're saving the hardware ops team. You're paying more dollars per iop, core and GB of ram, but the alternate method of obtaining these resources has more surrounding costs than "ze cloud". On the other hand, once you're shoveling several hundred kilo-dollars per month to a cloud provider, it makes sense to throw a million or 10 at dell and hire those operators, because it will save money within a year or two. This only makes sense if you need the resources, but if you need those resources, it helps being more efficient.

mcgoo 10y ago

Netflix has edge caching deployed at "thousands of ISPs worldwide." https://media.netflix.com/en/company-blog/how-netflix-works-with-isps-around-the-globe-to-deliver-a-great-viewing-experience https://media.netflix.com/en/company-blog/how-netflix-works-...

scott_s 10y ago

The actual streaming video from Netflix does not come from Amazon's systems. From https://arstechnica.com/information-technology/2016/02/netflix-finishes-its-massive-migration-to-the-amazon-cloud/ https://arstechnica.com/information-technology/2016/02/netfl..., "Netflix operates its own content delivery network (CDN) called Open Connect. Netflix manages Open Connect from Amazon, but the storage boxes holding videos that stream to your house or mobile device are all located in data centers within Internet service providers' networks or at Internet exchange points, facilities where major network operators exchange traffic. Netflix distributes traffic directly to Comcast, Verizon, AT&T, and other big network operators at these exchange points." Everything else - such as the Netflix UI, your account management, billing, etc - is on Amazon. But Netflix has an enormous amount of hardware distributed around the world. If you wanted to compete with Netflix, you would need to do a lot more than uses Amazon's cloud services.

true_religion 10y ago
> If you wanted to compete with Netflix, you would need to do a lot more than uses Amazon's cloud services. Yes you'd need multi-million dollar contracts with all of the major studios. Netflix isn't as much a technical problem as it is a business problem. HBO has a far worse network, UI, and technology in general but its still competitive simply because it has Game of Thrones and other shows.
- cookiecaper 10y ago
  Scratch business problem, replace with "legal problem". Copyright law makes it virtually impossible to compete with Netflix. Netflix was only allowed to start because they wedged their way in as a rent-by-mail service. After pioneering streaming and realizing that the studios were asking themselves why they don't just load up their own computers with movies and get paid to stream them out, Netflix was forced to start its own content division to keep subscribers onboard and prevent the studios from poaching all of their customers by failing to renew contracts for content. We have a similar problem in online services. It's impossible to compete with Facebook because the law allows them to hold data hostage. We badly need copyright reform. The current incarnation is impractical in the digital age.

random28345 10y ago

> [Netflix's] edge is in software alone, nothing that causes a huge barrier to entry like custom hardware. Actually, they are a media company. Their "edge" is in content creation and licencing deals. They might have been first-to-market for mass-scale streaming, but streaming video technology is a commodity, and they know that they will live or die by the desirability of their media catalog. > Netflix for example, is completely at the mercy of Amazon. Amazon and Netflix were symbiotic for years, as Netflix was a headline corporate customer, and I'm sure they received preferential pricing. And given the quality of Netflix's engineering team, I would be very surprised if they don't have a plan to migrate by the expiration of their contract if necessary.

em3rgent0rdr 10y ago
> "Actually, [Netflix is] a media company. Their "edge" is in content creation and licencing deals..." That's only partly true. But if you considering a lot of other "media companies" haven't been able to compete with Netflix's ease of use, then you have to ask the question how is Netflix different from any other media company. And the answer is because they are also a software company, where their successes is primarily attributed to making DRM video in browser easy and seamless for average folk.
chetanahuja 10y ago
This answer is in the same category as "Actually, Google is an ads company". That is to say, it makes a plausible case but ultimately wrong. The original success of Netflix depended on being the first company with a fixed-price-no-ads streaming business model in addition to really good user experience across a wide variety of platforms. I remember being astonished at watching a Netflix movie on my iPhone (when I was still an iPhone user) while riding a train in 2011'ish. It was miles ahead of any other competitor in providing solid, usable clients on multiple platforms combined with reliable streaming in most cases and networks. This was as much a triumph of technology and product design as it was of the content available. If it was only about the content, it would be Hulu (at least in US) instead of Netflix who would be in pole position today.
- 10y ago

amorphid 10y ago

I don't know that I'd say Netflix is completely at the mercy of Amazon. Sure, if AWS goes down, Netflix goes down. But that would be true enough for they ran all of their own stuff, too... "Netflix is completely at the mercy of their ops team". One of the big points of the cloud is that is gives one the ability to do things that one would trouble doing without the cloud. A small business with a single part-time developer can deploy an app to Heroku, and not need an ops person. That sure beats the heck out of the small business not being able to deploy software at all. As a former small biz owner, I did not want to have to manage a bare metal server in a colocation rack with a not-cheap data pipe. I just wanted a CRUD app with a minimal feature set. When Heroku went down, I sat around wishing it would come back up, and eventually it did. That was way better than having to service a physical box when it failed. Heroku cost me a few hundred a month, and freed me up to earn much more than that. In my eyes, it paid for itself many times over.

motoboi 10y ago
> Sure, if AWS goes down, Netflix goes down. Well. AWS went down (part of it), but Netflix stayed alive.
hueving 10y ago
>But that would be true enough for they ran all of their own stuff, too... "Netflix is completely at the mercy of their ops team". They employ their ops team and their ops team has equity stake in the company's success as well as their career riding on the line. If a chunk of Amazon goes down and takes out your website, all you can do is wait and hope Amazon is prioritizing the fix. >When Heroku went down, I sat around wishing it would come back up, and eventually it did. This method of recovery just doesn't cut it in businesses with lots of transactions 24/7. Just sitting around can be flushing thousands per minute down the drain. In those deployments, you need to build across multiple cloud providers; and once you've reached that abstraction, you might as well have your own hardware as well and just burst to providers. A company like Netflix can get by because they have their own hardware for streaming so an outage only affects people browsing for a movie at the time. And on top of that, their only interactive transaction is signing up for the service, which is extremely infrequent compared to the rest of the traffic. So essentially it's safe for Netflix to use AWS because they don't need high reliability/control of their own destiny. >A small business with a single part-time developer can deploy an app to Heroku, and not need an ops person. This use case I understand. However, anything at the scale that is frequently discussed in these contexts (gitlab, etc), they need ops people.

badloginagain 10y ago

The article has some really good points why being in the cloud is a good idea. GitLabs core competencies are in software, not hardware- similar to many startups. Sure, they could hire up an infrastructure team, but that's at an opportunity cost of their software team. The cloud offers convenience that all the `original internet companies` wish they had when they were starting out. There may be value in switching when you hit a certain scale, companies like Netflix will have already done cost-benefit analysis to that degree. But it's a massive undertaking that introduces substantial risk for long periods of time. Many companies are just not in a position to do that.

synicalx 10y ago
I think their recent cock up is a great example of why they need an ops team regardless of whether or not they're in the cloud.
stephenr 10y ago
> Sure, they could hire up an infrastructure team Their original proposal on bare metal was for 64 servers. They need an ops team regardless of whether they control the hardware or not.

emodendroket 10y ago

The thing is that at the small to medium scale running your own servers just isn't cost-effective. It's the same principle that leads smaller companies to outsource services like IT.

RaleyField 10y ago

It's a conspiracy, got you.

mikekchar 10y ago

> The cloud as a money saving venture is and always has been a damn lie. When you are in business, saving money is not always the most important thing. In reality, you usually spend 95% of your revenue. The question is not "How much money can we save", but "What investment will bring the greatest return". It's a bit like buying the building that you are working in rather than renting it. Or hiring full time cleaning staff rather than hiring a firm to take care of it. The second choice is more expensive, but requires less capital/time up front. If you can use that money and time to better effect then it is a no brainer. As companies get bigger, they have less opportunities to make large returns on their money/time, so it often makes sense to start focusing on those smaller returns. As an aside, this is also why you shouldn't go to your CTO and say, "I can save $X by refactoring/rewriting/testing our code". The CTO can usually always find things that appear to be better ROI opportunities and so you get into a situation where refactoring/rewriting/testing becomes forbidden. Rather you should always attempt to use appropriate techniques to maximise throughput in development and to keep your stake holders happy.

mablap 10y ago

So if I understand you correctly, if I need an appendectomy I shouldn't consult a doctor, but rather open up an anatomy book and do the procedure myself?

StreamBright 10y ago

>> All the original internet companies run their own hardware Exactly and most of the companies are not original internet companies, and they use the cloud.