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For a B2B SAAS company...what's the ideal user cost of infrastructure? (I understand that it depends on the service..but a ratio of profit per user vs cost per

For a B2B SAAS company...what's the ideal user cost of infrastructure? (I understand that it depends on the service..but a ratio of profit per user vs cost per user should be close no?)

matthewowen 9y ago
It surely depends on how much users pay for the service, and how high the non-software costs are. But in any case, the examples given are B2C free to use products which are generally going to provide... not a ton of revenue per user.
- sonaltr 9y ago
  I thought Dropbox's revenue mainly comes from it's business clients - B2B is more $ compared to B2C although B2C might be more profitable as customers might pay the $10/1TB and not really use that much anyways) Their paying users have increased, but the revenue per user has decreased (based on the S1...which I assume is because of enterprise deals).
  - jtmcmc 9y ago
    This is from the SNAP S1 not the dropbox S1
toomuchtodo 9y ago
The ideal cost is as low as possible without sacrificing future scaling needs or development velocity. At some point, you'll start to experience diminishing returns. It usually goes POC->Cloud provider->Your own gear
- sonaltr 9y ago
  apart from the bigger companies (like Fb), have there been any major SaaS companies (esp. B2B but I guess that's trying to be too narrow so B2B & B2C) that have moved from Cloud to their own Data Center? (I know Etsy comes to mind...but apart from them?).
  - toomuchtodo 9y ago
    Dropbox: https://techcrunch.com/2017/09/15/why-dropbox-decided-to-drop-aws-and-build-its-own-infrastructure-and-network/ https://techcrunch.com/2017/09/15/why-dropbox-decided-to-dro... Github: https://githubengineering.com/evolution-of-our-data-centers/ https://githubengineering.com/evolution-of-our-data-centers/ Backblaze: https://www.backblaze.com/blog/our-secret-data-center/ https://www.backblaze.com/blog/our-secret-data-center/ Twitter: https://blog.twitter.com/engineering/en_us/topics/infrastructure/2017/the-infrastructure-behind-twitter-scale.html https://blog.twitter.com/engineering/en_us/topics/infrastruc... LinkedIn: http://www.datacenterdynamics.com/content-tracks/design-build/how-linkedins-data-centers-grew-up/99215.fullarticle http://www.datacenterdynamics.com/content-tracks/design-buil... FastMail: https://www.fastmail.com/help/ourservice/security.html https://www.fastmail.com/help/ourservice/security.html Stack Overflow: http://highscalability.com/blog/2014/7/21/stackoverflow-update-560m-pageviews-a-month-25-servers-and-i.html http://highscalability.com/blog/2014/7/21/stackoverflow-upda... Wikipedia: https://meta.wikimedia.org/wiki/Wikimedia_servers https://meta.wikimedia.org/wiki/Wikimedia_servers OpenStreetMap: https://blog.openstreetmap.org/tag/infrastructure/ https://blog.openstreetmap.org/tag/infrastructure/ The Internet Archive: https://www.theregister.co.uk/2017/11/16/head_like_a_memory_hole/ https://www.theregister.co.uk/2017/11/16/head_like_a_memory_... Gitlab tried, but didn't have the necessary in-house experience before they made the attempt: https://about.gitlab.com/2017/03/02/why-we-are-not-leaving-the-cloud/ https://about.gitlab.com/2017/03/02/why-we-are-not-leaving-t... Instagram was migrated from AWS onto Facebook's infrastructure: https://www.wired.com/2014/06/facebook-instagram/ https://www.wired.com/2014/06/facebook-instagram/ WhatsApp was migrated from IBM to Facebook infrastructure: https://www.cnbc.com/2017/06/07/facebook-planning-to-move-whatsapp-off-ibms-public-cloud.html https://www.cnbc.com/2017/06/07/facebook-planning-to-move-wh... Hacker News and Pinboard (acq. Delicious) run on a single server. It's not hard, but you do need to know what you're doing and have resources to do it (most orgs rent colo space in someone else's datacenter, they don't build their own). There's a reason AWS margins are so high (which leaves a lot of cost savings to be had when your workload isn't highly variable). Any questions, email is in my profile. I spent ~16 years building data centers, hosting environments, infrastructure, etc.
    - dfox 9y ago
bkanber 9y ago
I forget which report it was in but the average tech-focused startup spends 10-15% of revenue on infrastructure. Mature businesses spend ~5%.

For a B2B SAAS company...what's the ideal user cost of infrastructure? (I understand that it depends on the service..but a ratio of profit per user vs cost per user should be close no?)

matthewowen 9y ago

It surely depends on how much users pay for the service, and how high the non-software costs are. But in any case, the examples given are B2C free to use products which are generally going to provide... not a ton of revenue per user.

sonaltr 9y ago
I thought Dropbox's revenue mainly comes from it's business clients - B2B is more $ compared to B2C although B2C might be more profitable as customers might pay the $10/1TB and not really use that much anyways) Their paying users have increased, but the revenue per user has decreased (based on the S1...which I assume is because of enterprise deals).
- jtmcmc 9y ago
  This is from the SNAP S1 not the dropbox S1

toomuchtodo 9y ago

The ideal cost is as low as possible without sacrificing future scaling needs or development velocity. At some point, you'll start to experience diminishing returns. It usually goes POC->Cloud provider->Your own gear

sonaltr 9y ago
apart from the bigger companies (like Fb), have there been any major SaaS companies (esp. B2B but I guess that's trying to be too narrow so B2B & B2C) that have moved from Cloud to their own Data Center? (I know Etsy comes to mind...but apart from them?).
- toomuchtodo 9y ago
  Dropbox: https://techcrunch.com/2017/09/15/why-dropbox-decided-to-drop-aws-and-build-its-own-infrastructure-and-network/ https://techcrunch.com/2017/09/15/why-dropbox-decided-to-dro... Github: https://githubengineering.com/evolution-of-our-data-centers/ https://githubengineering.com/evolution-of-our-data-centers/ Backblaze: https://www.backblaze.com/blog/our-secret-data-center/ https://www.backblaze.com/blog/our-secret-data-center/ Twitter: https://blog.twitter.com/engineering/en_us/topics/infrastructure/2017/the-infrastructure-behind-twitter-scale.html https://blog.twitter.com/engineering/en_us/topics/infrastruc... LinkedIn: http://www.datacenterdynamics.com/content-tracks/design-build/how-linkedins-data-centers-grew-up/99215.fullarticle http://www.datacenterdynamics.com/content-tracks/design-buil... FastMail: https://www.fastmail.com/help/ourservice/security.html https://www.fastmail.com/help/ourservice/security.html Stack Overflow: http://highscalability.com/blog/2014/7/21/stackoverflow-update-560m-pageviews-a-month-25-servers-and-i.html http://highscalability.com/blog/2014/7/21/stackoverflow-upda... Wikipedia: https://meta.wikimedia.org/wiki/Wikimedia_servers https://meta.wikimedia.org/wiki/Wikimedia_servers OpenStreetMap: https://blog.openstreetmap.org/tag/infrastructure/ https://blog.openstreetmap.org/tag/infrastructure/ The Internet Archive: https://www.theregister.co.uk/2017/11/16/head_like_a_memory_hole/ https://www.theregister.co.uk/2017/11/16/head_like_a_memory_... Gitlab tried, but didn't have the necessary in-house experience before they made the attempt: https://about.gitlab.com/2017/03/02/why-we-are-not-leaving-the-cloud/ https://about.gitlab.com/2017/03/02/why-we-are-not-leaving-t... Instagram was migrated from AWS onto Facebook's infrastructure: https://www.wired.com/2014/06/facebook-instagram/ https://www.wired.com/2014/06/facebook-instagram/ WhatsApp was migrated from IBM to Facebook infrastructure: https://www.cnbc.com/2017/06/07/facebook-planning-to-move-whatsapp-off-ibms-public-cloud.html https://www.cnbc.com/2017/06/07/facebook-planning-to-move-wh... Hacker News and Pinboard (acq. Delicious) run on a single server. It's not hard, but you do need to know what you're doing and have resources to do it (most orgs rent colo space in someone else's datacenter, they don't build their own). There's a reason AWS margins are so high (which leaves a lot of cost savings to be had when your workload isn't highly variable). Any questions, email is in my profile. I spent ~16 years building data centers, hosting environments, infrastructure, etc.
  - dfox 9y ago

bkanber 9y ago

I forget which report it was in but the average tech-focused startup spends 10-15% of revenue on infrastructure. Mature businesses spend ~5%.