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> Hosting costs per DAU were $0.68 in Q3 2017 as compared to $0.64 in Q3 2016 and $0.61 in Q2 2017. Those are staggering figures to me and the trend is equally

> Hosting costs per DAU were $0.68 in Q3 2017 as compared to $0.64 in Q3 2016 and $0.61 in Q2 2017. Those are staggering figures to me and the trend is equally surprising. Maybe it's ignorance about hosting costs at such a scale, but i feel like cost/DAU should be declining over time, right? Is there something i'm missing here?

blin17 9y ago
Is this a monthly cost or yearly?
- lpolovets 9y ago
  I think it's quarterly. (i.e. the annual hosting cost per user is a little over $2.50)
deleted 9y ago
[deleted]
jasongill 9y ago
Maybe the amount of usage per user is increasing (a metric that isn't really reflected by just counting DAU)?
- amigoingtodie 9y ago
  There is a thriving market in amateur adult modeling and porn. I am thinking of writing an e-book about it.
  - toomuchtodo 9y ago
    I would preorder such an ebook.
    - tqkxzugoaupvwqr 9y ago
      Not OP, but my insight: Adult entertainers use Snapchat as a distribution channel for their own self-made videos. Some offer their Snapchat stories for free and try to up-sell you, others charge you for giving you access to their stories. Payment is through Patreon or PayPal or some other common payment platforms.
rgbrenner 9y ago
They have to receive the picture, then send it to a number of other users. So it's probably mostly bandwidth charges. They use Google, right? When was the last time Google (or any of the cloud providers) lowered their bandwidth charges? That small fluctuation is probably just minor variations in usage.
- hkmurakami 9y ago
  Yes they have a giant contract with GCP https://www.recode.net/2017/3/1/14661126/snap-snapchat-ipo-spending-2-billion-google-cloud https://www.recode.net/2017/3/1/14661126/snap-snapchat-ipo-s...
- cobookman 9y ago
  Google just recently lowered it's egress rates Through the release of standard networking. Also don't expect snap to be paying list rate. https://cloudplatform.googleblog.com/2017/08/introducing-Network-Service-Tiers-your-cloud-network-your-way.html?m=1 https://cloudplatform.googleblog.com/2017/08/introducing-Net... (Disclaimer I work for Google cloud. I also have no direct knowledge of snaps gcp rate but have worked on other offline contracts)
- donavanm 9y ago
  That cost is definitely not bandwidth. Content delivery is around $0.005-0.01 per GB with an external provider. Less if yiu have the scale to do it in house. My guess is that the bulk of that spend is compute + storage/io.
  - kalessin 9y ago
    The cost is definitely bandwidth, Snapchat doesn't have much of a storage problem as snaps have an actual TTL.
    - jjcm 9y ago
      Assuming half of it is bandwidth costs, that means that a daily active user is using ~380 MB/day (assuming $0.01/GB). That seems pretty hefty as an average. Especially if you consider the encoding snapchat uses puts each 10s video at about 1MB in size. 380MB is a little over an hour of snapchat quality video, that seems excessive as an average. If I were a major stockholder I'd be pushing to see why these hosting costs were so high.
candiodari 9y ago
They use Google App Engine. Not known for being cheap at scale. https://www.recode.net/2017/3/1/14661126/snap-snapchat-ipo-spending-2-billion-google-cloud https://www.recode.net/2017/3/1/14661126/snap-snapchat-ipo-s...
- hnarn 9y ago
  Apparently $SNAP is also not known for trying to keep costs down.
  - rrhd 9y ago
    Have heard they are working hard on that, which makes this more surprising to me.
Zarath 9y ago
I'm not sure what "hosting costs" encompasses. But maybe this includes analytics costs? I assume they have far more ML and data collection infrastructure than before.
apoverton 9y ago
That stuck out to me as well. It kind of seems to me like they’re saying variable cost of goods sold increased
aylmao 9y ago
Probably new features. The new 3D filters look like they could require more resources to serve (filters are not included in the app but rather downloaded dynamically iirc). Maybe they're rolling out more localized filters too.
mizzao 9y ago
Snap is paying Google $400m a year for hosting costs... https://techcrunch.com/2017/02/02/snap-commits-2-billion-over-5-years-for-google-cloud-infrastructure/ https://techcrunch.com/2017/02/02/snap-commits-2-billion-ove... Seems like at that point it might be cheaper to run your own datacenters?
- runeks 9y ago
  > Seems like at that point it might be cheaper to run your own datacenters? Depends on whether they acquire new users in the future. Their hosting costs are fixed, so doubling their user count would halve their per-user costs.
- joshmn 9y ago
  Your own DC, sure, but to build out an entire cloud platform? Even with OpenStack and the like, it's anything but trivial.
- tim333 9y ago
  I'm puzzled by that - if it's $400m/yr then cost per user should go down as you have more but they seem to be reporting the opposite. ("Hosting costs per DAU were $0.68 in Q3 2017 as compared to $0.64 in Q3 2016")
sschueller 9y ago
Maybe those snaps aren't actually getting deleted but are kept for ever...
wdr1 9y ago
More features = more resources. You need a culture of cleaning up tech debt to reduce resource usage. With so many holes in the ship, the company is going to be focused on features to drive up RPU.

blin17 9y ago

Is this a monthly cost or yearly?

lpolovets 9y ago
I think it's quarterly. (i.e. the annual hosting cost per user is a little over $2.50)

deleted 9y ago

[deleted]

jasongill 9y ago

Maybe the amount of usage per user is increasing (a metric that isn't really reflected by just counting DAU)?

amigoingtodie 9y ago
There is a thriving market in amateur adult modeling and porn. I am thinking of writing an e-book about it.
- toomuchtodo 9y ago
  I would preorder such an ebook.
  - tqkxzugoaupvwqr 9y ago
    Not OP, but my insight: Adult entertainers use Snapchat as a distribution channel for their own self-made videos. Some offer their Snapchat stories for free and try to up-sell you, others charge you for giving you access to their stories. Payment is through Patreon or PayPal or some other common payment platforms.

rgbrenner 9y ago

They have to receive the picture, then send it to a number of other users. So it's probably mostly bandwidth charges. They use Google, right? When was the last time Google (or any of the cloud providers) lowered their bandwidth charges? That small fluctuation is probably just minor variations in usage.

hkmurakami 9y ago
Yes they have a giant contract with GCP https://www.recode.net/2017/3/1/14661126/snap-snapchat-ipo-spending-2-billion-google-cloud https://www.recode.net/2017/3/1/14661126/snap-snapchat-ipo-s...
cobookman 9y ago
Google just recently lowered it's egress rates Through the release of standard networking. Also don't expect snap to be paying list rate. https://cloudplatform.googleblog.com/2017/08/introducing-Network-Service-Tiers-your-cloud-network-your-way.html?m=1 https://cloudplatform.googleblog.com/2017/08/introducing-Net... (Disclaimer I work for Google cloud. I also have no direct knowledge of snaps gcp rate but have worked on other offline contracts)
donavanm 9y ago
That cost is definitely not bandwidth. Content delivery is around $0.005-0.01 per GB with an external provider. Less if yiu have the scale to do it in house. My guess is that the bulk of that spend is compute + storage/io.
- kalessin 9y ago
  The cost is definitely bandwidth, Snapchat doesn't have much of a storage problem as snaps have an actual TTL.
  - jjcm 9y ago
    Assuming half of it is bandwidth costs, that means that a daily active user is using ~380 MB/day (assuming $0.01/GB). That seems pretty hefty as an average. Especially if you consider the encoding snapchat uses puts each 10s video at about 1MB in size. 380MB is a little over an hour of snapchat quality video, that seems excessive as an average. If I were a major stockholder I'd be pushing to see why these hosting costs were so high.

candiodari 9y ago

They use Google App Engine. Not known for being cheap at scale. https://www.recode.net/2017/3/1/14661126/snap-snapchat-ipo-spending-2-billion-google-cloud https://www.recode.net/2017/3/1/14661126/snap-snapchat-ipo-s...

hnarn 9y ago
Apparently $SNAP is also not known for trying to keep costs down.
- rrhd 9y ago
  Have heard they are working hard on that, which makes this more surprising to me.

Zarath 9y ago

I'm not sure what "hosting costs" encompasses. But maybe this includes analytics costs? I assume they have far more ML and data collection infrastructure than before.

apoverton 9y ago

That stuck out to me as well. It kind of seems to me like they’re saying variable cost of goods sold increased

aylmao 9y ago

Probably new features. The new 3D filters look like they could require more resources to serve (filters are not included in the app but rather downloaded dynamically iirc). Maybe they're rolling out more localized filters too.

mizzao 9y ago

Snap is paying Google $400m a year for hosting costs... https://techcrunch.com/2017/02/02/snap-commits-2-billion-over-5-years-for-google-cloud-infrastructure/ https://techcrunch.com/2017/02/02/snap-commits-2-billion-ove... Seems like at that point it might be cheaper to run your own datacenters?

runeks 9y ago
> Seems like at that point it might be cheaper to run your own datacenters? Depends on whether they acquire new users in the future. Their hosting costs are fixed, so doubling their user count would halve their per-user costs.
joshmn 9y ago
Your own DC, sure, but to build out an entire cloud platform? Even with OpenStack and the like, it's anything but trivial.
tim333 9y ago
I'm puzzled by that - if it's $400m/yr then cost per user should go down as you have more but they seem to be reporting the opposite. ("Hosting costs per DAU were $0.68 in Q3 2017 as compared to $0.64 in Q3 2016")

sschueller 9y ago

Maybe those snaps aren't actually getting deleted but are kept for ever...

wdr1 9y ago

More features = more resources. You need a culture of cleaning up tech debt to reduce resource usage. With so many holes in the ship, the company is going to be focused on features to drive up RPU.