4 ms·
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 ve
by 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 agoIf 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 agoDoes Apple own any factories?
- Isamu 10y agoActually they own a lot of very expensive equipment that their subcontractors operate for them. E.g. all those CNC milling machines for their phones/laptops/watches. These capital expenditures were a bit steep for their subcontractors, so this creates a kind of symbiotic relationship.
- feyman_r 10y agoI would think running on 'owned hardware' in rented colo space is very close to 'rented hardware' in the cloud. The only clear differentiator then is actually owning a datacenter. And the Total Cost of Ownership of that isn't easy. For someone who doesn't want to be in the datacenter-ownership business, opting in to cloud would make sense. Concerns for privacy and government intervention are a valid concern though.
- morgante 10y ago> Running on rented hardware is the equivalent of a traditional product company renting all of their factories. Correct. Traditional product companies very rarely own all their own factories. Do you honestly think Netflix management is incompetent? They've run the numbers on this countless times. They have way more insight into their spend and operations than a random anonymous internet commentator.
- keepper 10y agoNetflix runs their most expensive part (pushing those terrabits of traffic ), with their own hardware and network. https://openconnect.netflix.com/en/ https://openconnect.netflix.com/en/ so, you were saying? Or do you think facebook,google,aol,tripadvisor and pretty much anyone beside HotNewStartup are incompetent?
- morgante 10y agoI know Netflix runs their own edge nodes, which is precisely why OP sounds incompetent and uninformed. Netflix has spent lots of time and effort into analyzing and building the architecture which is optimized for them. > Or do you think facebook,google,aol,tripadvisor and pretty much anyone beside HotNewStartup are incompetent? Far from it, and that's precisely my point. At Facebook scale, it certainly makes sense to run your own data centers. At HotNewStartup, it obviously doesn't. Competence is finding the solution which works best for your scale and organization, not following some generic rule.
- stinkytaco 10y ago> Running on rented hardware is the equivalent of a traditional product company renting all of their factories. Or a traditional business renting a storefront? Something that happens all the time. Even huge companies like Apple use OEMs. Samsung manufactured Apple chips for years despite putting up a direct competitor to apple in the Galaxy S. Systems like this allow people who do not have capital to scale up. Just like developers build malls and lease space to retailers or OEMs build factories and lease them to companies to make equipment.