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>In 2014 I don't think a startup existed trying to use physical machines - it was all aws,etc. You're also starting to see those startups realize how much mone

by tw04 9y ago

>In 2014 I don't think a startup existed trying to use physical machines - it was all aws,etc. You're also starting to see those startups realize how much money they're wasting on cloud services once they hit scale. It is EXTREMELY expensive to do cloud if you're even remotely efficient with your infrastructure unless you've got extremely bursty and unpredictable workloads.

anton-107 9y ago
But in return it's also extremely cheap to bootstrap and fail
user5994461 9y ago
It is much cheaper to run clouds than to buy and operate your own hardware. The cloud is also a lot easier to optimize and save money.
- venantius 9y ago
  You're getting downvoted, but your answer is partially correct: when you're a small startup, it is almost certainly cheaper (in terms of time and operational complexity) to outsource infrastructure to the cloud. However, once you hit significant scale, the lessons from the operational experience of all of the major firms have been pretty consistent: it's cheaper to operate your own data centers than it is to outsource them.
  - localhost 9y ago
    Depends on what you mean by scale. If scale means providing services globally to many jurisdictions, you're going to have to start doing the things that the big players so like putting data centers in specific geographies (e.g., EU, China). That means getting real estate, power etc. At that point I think the scale tips in the other direction where it's now more costly for you to "scale". So, cheap at the small end, cheap at the high end and expensive in the middle (cloud).
    - owenmarshall 9y ago
      Bingo. From the perspective of a Fortune (checks list) 15 company: AWS saves us a fortune. No facilities costs all over the world with power/real estate/lawyers to handle local laws. No data center engineers across the globe. A solid discount on list. Consistent bills (thanks to judicious RI buys) and servers that are available in minutes - not weeks (have you ever seen enterprise IT ticketing practices?!) If we had two orders of magnitude fewer employees/servers/locations AWS wouldn't make sense. But at this scale nothing else makes sense.
      - hueving 9y ago
        If you have reserved instance style workloads and aws is saving you money, it sounds like your private data centers were just grossly mismanaged or you have a negligible compute load. AWS was likely just a way to overhaul inefficiencies in a legacy IT org. Someone will be able to do the same thing in 5 years moving you from AWS back to self-hosted.
      - ubernetes 9y ago
        People really need to stop. There is no Fortune 15. I get that your e-peen needs all the help it can get, but this is like a grown adult giving their age as 41 "and 3 quarters".
  - InTheArena 9y ago
    Speaking as the chief architect for solutions that are deployed on the cloud for financial services, this is not true. There is a point at which the infrastructure to manage the infrastructure becomes more expensive than the hardware and the network. Regulatory compliance especially PCI and HIPAA become very difficult to manage. Downtimes percent risks to large strategic customers. At that point the cloud comes in to atone because of the ability to scale completely dynamically and the capability for automation.
    - ubernetes 9y ago
      Sounds like you're either not that big or you have an incompetent team. If you have PCI/HIPAA/whatever under control, it doesn't magically get harder as you get bigger. Outsourcing it just means you pay someone else to get it right, in addition to giving up control.
- Deimorz 9y ago
  It seems easier to optimize because you're starting out so far away from the goal, so you have a lot of space to improve. The money you mostly end up "saving" is money that you didn't really need to spend in the first place, but you chose to spend more instead of going through the optimizing effort up-front (which can be a perfectly valid approach).
- bsder 9y ago
  Not even close to universally true. Bandwidth is almost always cheaper at a colo. Most compute instances are cheaper to buy and rack if you have continuous loads. Disk ... is tricky. It is faster and has lower up front costs to get clouds up and running initially. For most startups who are going to fail, that's Good Enough(tm). If, however, you continue existing for a while, the other things start to add up at much lower levels that you would expect. I'd say the crossover is around when you are spending about $15,000 per year. Your colo is about $10,000 of that per year and you can rack 5 new machines every year for the remaining $5K. That's not that much for an actual business. Cloud is good for your initial startup and for bursty situations. Once you have continuous loads, you need to be moving to pulling stuff back to your own hardware.
  - mdorazio 9y ago
    How does employee cost factor into that, though? I don't do devops, so I don't know at what scale you start needing dedicated people to manage hardware and configuration at a colo. However, employees are really expensive in comparison to just about everything else, so even if you're spending an extra $10K a year on AWS than you would at a colo, if using it saves you just 10% of one person's time you're coming out ahead.
    - bsder 9y ago
      Except that, invariably, I'm not saving that person's time. It's a real myth that the cloud magically saves me a sysadmin. I have found almost exactly the opposite. Using the cloud effectively takes more time and more expertise. Debugging the cloud effectively takes WAY more expertise. Combine this with the fact that someone has to be able to architect a system to fit within the constraints of being on the cloud, and you're down extra employees. The difference is in: "Eh, it's been down for 3 days? Sigh. Just reboot it." vs. "Um, that request hung for 93 seconds. Why?" In the first case, the cloud is fine. In the second case, someone is going to have to traipse over an enormous amount of systems (which you don't own and can't always instrument) and variables (some of which you aren't even aware of existing) to hunt it down. If, however, you can say "Pull that off the cloud into our own systems and keep an eye on it." you have made your debugging life a lot easier. Of course, once you have the ability to do that, your team realizes and starts asking: "Given how much time we spend debugging issues with the cloud that aren't actually our fault, why are we on the cloud again?" I always smile when that realization kicks in. Now I generally have to stop the team from pulling everything off the cloud. However, that's a much easier task.
- elmar 9y ago
  The epic story of dropbox exodus from the amazon cloud empire https://www.wired.com/2016/03/epic-story-dropboxs-exodus-amazon-cloud-empire/ https://www.wired.com/2016/03/epic-story-dropboxs-exodus-ama... But some companies get so big, it actually makes sense to build their own network with their own custom tech and, yes, abandon the cloud. Amazon and Google and Microsoft can keep cloud prices low, thanks to economies of scale. But they aren't selling their services at cost. "Nobody is running a cloud business as a charity," says Dropbox vice president of engineering and ex-Facebooker Aditya Agarwal. "There is some margin somewhere." If you're big enough, you can save tremendous amounts of money by cutting out the cloud and all the other fat. Dropbox says it's now that big.
  - nojvek 9y ago
    Dropbox is now at petabyte scale. Last I had a conversation with someone at Dropbox they mentioned they’re moving storage in-house but still use quite a bit of AWS for service. I think hybrid totally makes sense where you take the most expensive part bare metal with limited scope of maintenance.
    - user5994461 9y ago
      I'd assume Dropbox is at least hexabyte scale. 1 PB is $23k per month on S3. It's nothing. That's barely the costs of 1-2 employees in SV. The migration itself would take a lot more effort than one dude, even if there was a solution for completely free storage out there, the migration could only result in a huge net loss.
ransom1538 9y ago
"once they hit scale" Most don't. That is the value.

by tw04 9y ago

anton-107 9y ago

But in return it's also extremely cheap to bootstrap and fail

user5994461 9y ago

It is much cheaper to run clouds than to buy and operate your own hardware. The cloud is also a lot easier to optimize and save money.

venantius 9y ago
You're getting downvoted, but your answer is partially correct: when you're a small startup, it is almost certainly cheaper (in terms of time and operational complexity) to outsource infrastructure to the cloud. However, once you hit significant scale, the lessons from the operational experience of all of the major firms have been pretty consistent: it's cheaper to operate your own data centers than it is to outsource them.
- localhost 9y ago
  Depends on what you mean by scale. If scale means providing services globally to many jurisdictions, you're going to have to start doing the things that the big players so like putting data centers in specific geographies (e.g., EU, China). That means getting real estate, power etc. At that point I think the scale tips in the other direction where it's now more costly for you to "scale". So, cheap at the small end, cheap at the high end and expensive in the middle (cloud).
  - owenmarshall 9y ago
    Bingo. From the perspective of a Fortune (checks list) 15 company: AWS saves us a fortune. No facilities costs all over the world with power/real estate/lawyers to handle local laws. No data center engineers across the globe. A solid discount on list. Consistent bills (thanks to judicious RI buys) and servers that are available in minutes - not weeks (have you ever seen enterprise IT ticketing practices?!) If we had two orders of magnitude fewer employees/servers/locations AWS wouldn't make sense. But at this scale nothing else makes sense.
    - hueving 9y ago
      If you have reserved instance style workloads and aws is saving you money, it sounds like your private data centers were just grossly mismanaged or you have a negligible compute load. AWS was likely just a way to overhaul inefficiencies in a legacy IT org. Someone will be able to do the same thing in 5 years moving you from AWS back to self-hosted.
    - ubernetes 9y ago
      People really need to stop. There is no Fortune 15. I get that your e-peen needs all the help it can get, but this is like a grown adult giving their age as 41 "and 3 quarters".
- InTheArena 9y ago
  Speaking as the chief architect for solutions that are deployed on the cloud for financial services, this is not true. There is a point at which the infrastructure to manage the infrastructure becomes more expensive than the hardware and the network. Regulatory compliance especially PCI and HIPAA become very difficult to manage. Downtimes percent risks to large strategic customers. At that point the cloud comes in to atone because of the ability to scale completely dynamically and the capability for automation.
  - ubernetes 9y ago
    Sounds like you're either not that big or you have an incompetent team. If you have PCI/HIPAA/whatever under control, it doesn't magically get harder as you get bigger. Outsourcing it just means you pay someone else to get it right, in addition to giving up control.
Deimorz 9y ago
It seems easier to optimize because you're starting out so far away from the goal, so you have a lot of space to improve. The money you mostly end up "saving" is money that you didn't really need to spend in the first place, but you chose to spend more instead of going through the optimizing effort up-front (which can be a perfectly valid approach).
bsder 9y ago
Not even close to universally true. Bandwidth is almost always cheaper at a colo. Most compute instances are cheaper to buy and rack if you have continuous loads. Disk ... is tricky. It is faster and has lower up front costs to get clouds up and running initially. For most startups who are going to fail, that's Good Enough(tm). If, however, you continue existing for a while, the other things start to add up at much lower levels that you would expect. I'd say the crossover is around when you are spending about $15,000 per year. Your colo is about $10,000 of that per year and you can rack 5 new machines every year for the remaining $5K. That's not that much for an actual business. Cloud is good for your initial startup and for bursty situations. Once you have continuous loads, you need to be moving to pulling stuff back to your own hardware.
- mdorazio 9y ago
  How does employee cost factor into that, though? I don't do devops, so I don't know at what scale you start needing dedicated people to manage hardware and configuration at a colo. However, employees are really expensive in comparison to just about everything else, so even if you're spending an extra $10K a year on AWS than you would at a colo, if using it saves you just 10% of one person's time you're coming out ahead.
  - bsder 9y ago
    Except that, invariably, I'm not saving that person's time. It's a real myth that the cloud magically saves me a sysadmin. I have found almost exactly the opposite. Using the cloud effectively takes more time and more expertise. Debugging the cloud effectively takes WAY more expertise. Combine this with the fact that someone has to be able to architect a system to fit within the constraints of being on the cloud, and you're down extra employees. The difference is in: "Eh, it's been down for 3 days? Sigh. Just reboot it." vs. "Um, that request hung for 93 seconds. Why?" In the first case, the cloud is fine. In the second case, someone is going to have to traipse over an enormous amount of systems (which you don't own and can't always instrument) and variables (some of which you aren't even aware of existing) to hunt it down. If, however, you can say "Pull that off the cloud into our own systems and keep an eye on it." you have made your debugging life a lot easier. Of course, once you have the ability to do that, your team realizes and starts asking: "Given how much time we spend debugging issues with the cloud that aren't actually our fault, why are we on the cloud again?" I always smile when that realization kicks in. Now I generally have to stop the team from pulling everything off the cloud. However, that's a much easier task.
elmar 9y ago
The epic story of dropbox exodus from the amazon cloud empire https://www.wired.com/2016/03/epic-story-dropboxs-exodus-amazon-cloud-empire/ https://www.wired.com/2016/03/epic-story-dropboxs-exodus-ama... But some companies get so big, it actually makes sense to build their own network with their own custom tech and, yes, abandon the cloud. Amazon and Google and Microsoft can keep cloud prices low, thanks to economies of scale. But they aren't selling their services at cost. "Nobody is running a cloud business as a charity," says Dropbox vice president of engineering and ex-Facebooker Aditya Agarwal. "There is some margin somewhere." If you're big enough, you can save tremendous amounts of money by cutting out the cloud and all the other fat. Dropbox says it's now that big.
- nojvek 9y ago
  Dropbox is now at petabyte scale. Last I had a conversation with someone at Dropbox they mentioned they’re moving storage in-house but still use quite a bit of AWS for service. I think hybrid totally makes sense where you take the most expensive part bare metal with limited scope of maintenance.
  - user5994461 9y ago
    I'd assume Dropbox is at least hexabyte scale. 1 PB is $23k per month on S3. It's nothing. That's barely the costs of 1-2 employees in SV. The migration itself would take a lot more effort than one dude, even if there was a solution for completely free storage out there, the migration could only result in a huge net loss.

ransom1538 9y ago

"once they hit scale" Most don't. That is the value.