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There's two good reasons to use a service like AWS: - You're too small for efficient economies of scale on your own equipment (i.e. AWS is cheaper when conside

There's two good reasons to use a service like AWS: - You're too small for efficient economies of scale on your own equipment (i.e. AWS is cheaper when considering total cost of ownership). - You need to scale rapidly to meet demand The second one is largely a data issue, if you have enough historical data on your customers, their habits, usage, and so on then scaling becomes predictable and even when it isn't you could offload only part of your infrastructure to a cloud vendor. What's interesting is that several companies that I know which rely on AWS/Azure/et al aren't on it for either of the two above stated "good" reasons. They are large businesses and do almost no automated scaling. They're on it for what can only be described as internal political limitations, meaning that they are on these services to remove the politics of technology infrastructure, one less manager at the top, a shorter chain of communications, an external party to blame when something does go wrong, and issues like HR/benefits/etc for infrastructure employees is outside the scope. In effect they view themselves as "not a technology company" so look to employ the fewest technology employees as they can. Even in cases where technology is paramount to their success. It is very interesting to watch, and I'm not even claiming they're "wrong" to handle their infrastructure this way, just that it is hard to quantify the exact reasoning for it.

rocky1138 9y ago
It's also easy to hire people who have AWS experience. It's getting harder and harder these days to find anyone who has actually seen the inside of a data centre.
- Bombthecat 9y ago
  The lock in is even worse than people think. Now more and more companies are locked in in Amazon. Hard to find a good old Datacenter Admin.
  - FreedomWarrior 9y ago
    As an "old-school" sysadmin I have the opposite view: it's difficult to find jobs that don't require AWS these days. I know perfectly well how to provision and scale a large infrastructure and can give you 99,999% availability in any application, BGP if needed. Yet no one is interested in that. Sure I can write Ansible scripts and Terraform policies, but it's a miniscule part of my skillset and doing it on AWS is just boring compared to building the backend that powers it.
deleted 9y ago
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mdasen 9y ago
Those are definitely two good reasons, but I think there's another: you are starting up and your core competency isn't object storage. I'd argue that the core competency of Dropbox is its easy syncing. Dropbox wanted to get that to market quickly. If they had spent the time building out a data storage solution on their own, it would have meant months or years of work before they had a reliable product. Paying AWS means giving Amazon some premium, but it also means that you don't have to build out that item. It's not only about economies of scale and rapid demand. It's also about time to market. I think it's a reasonable strategy to calculate out something along the lines of "we can pay Amazon $3N to store our data or store it ourselves for $N. However, it will take a year to build a reliable, distributed data store and we don't even know if customers want our product yet. So, let's build it on Amazon and if we get traction, we'll migrate." S3 is a value-added service and creating your own S3 means sinking time. Even though data storage is very very near to Dropbox's core competency, it's really the syncing that was the selling point of Dropbox. To get that syncing product in front of customers as fast as possible, leveraging S3 made a lot of sense. It gave them a much faster time to market. As time went on, they had traction, and S3 costs mounted, it made sense for them to start investing in their own data storage. It's about figuring out what's important (the syncing is the product) and figuring out what will help you go to market fast (S3) and figuring out how to lower costs after you have traction (transitioning to in-house storage). Yes, a lot of companies use cloud services when they don't need them. However, Google Cloud's compute pricing is reasonably similar to DigitalOcean (with sustained usage discounts) and from what I hear these companies will often negotiate discounts. AWS can seem a bit pricy compared to alternatives, but I'm guessing that Amazon offers just enough discounts to large customers that they look at the cost of running their own stuff and the cost of migration and Amazon doesn't look so bad. Still, when you're trying to go to market, you don't want to be distracted building pieces that customers don't care about when you can rent it from Amazon for reasonable rates. You haven't even proven that someone wants your product yet and your time is better spent on delivering what the customers want rather than infrastructure that saves costs. As you mature as a company, the calculus can change and Dropbox seems to have hit that transition quite well.
- jwhitlark 9y ago
  Agreed. De-risking non core competencies is very rational, especially while iterating business strategies.
gaius 9y ago
They're on it for what can only be described as internal political limitations, meaning that they are on these services to remove the politics of technology infrastructure Heh, at one previous company it would take 6-9 months to provision a new VM and 12-18 months for a physical. Those entrenched IT organisations absolutely deserve to get their lunches eaten.
- zxcmx 9y ago
  Was about to make this exact comment. Endless forms to fill out to move a network cable. Buuuut at my current workplace I am starting to see some slowdowns in doing AWS stuff as "departments" get more involved. Like the "cloud team" does the account but networks must provision the VPC, and there's a "gateway review board" that gets involved if you define a new network egress or ingress etc etc. I feel like many of the early advantages of cloud in enterprise are going to get eroded as the paper pushers catch on and "add value by defining process".
  - jimjimjim 9y ago
    this. and also in these days of data breaches where the sensitive data was just lying around on open s3, more are more places require approval from above before adding anything to aws.
  - gaius 9y ago
    Like the "cloud team" does the account but networks must provision the VPC, and there's a "gateway review board" that gets involved Yes, this is totally antithetical to modern working practices such as "DevOps" At that place e.g. the VM team could provision you a VM (eventually) but they couldn't do you a login on it, that was some other team. But you couldn't raise the paperwork against that team until the VM was created, so everything proceeded serially, and each step at a glacial pace. The time ratio between them and Azure or AWS is literally under one minute for every month!
    - HighPlainsDrftr 9y ago
      It is - but the company probably is trying to solve a problem of past mistakes. I can only speculate, but at one point, someone must have munged a network acl and created an outage. Now all network acl's need to be reviewed before being added. Maybe someone toasted VPC peering. Or their was a private VPC full of sensitive data that all of a sudden was publically available. There was an old saying that 80% of outages were caused by humans. But there is more to account for than that. For example: - Certifications that the org has obtained - Contracts that the org has signed with customers - Compliance with laws and regulations (and international) - Insurance requirements It can add up in a hurry and can slow an org down quickly. It would be nice if an org could review all of its failures every few years and drop nearly all of its processes and procedures and start out fresh again - vowing to build around the failures of the past.
nraynaud 9y ago
There is an opportunity cost to switching too: you don’t know your gain before switching is realized (hence you don’t know over how long to amortize the project), and the switching project could fail altogether. So there is a conservative argument to be made here.
hinkley 9y ago
Because I’m in the industry I’ve seen software companies run by the legal department or the HR department. But I’ve also witnessed both software and non tech companies where the IT department controls everything. (I know that sounds weird but a company selling on premises software, for instance, should NOT be cowtowing to the IT dept). In every one of those cases the group in charge has been the wrong group and it really makes you wonder who has been asleep at the wheel so long that this has occurred. Maybe outsourcing to AWS for a couple of years is a good way to reboot the organization. Cheaper than slowly going out of business. When the fad dies down you start hiring people back who are a little more humble and cheaper than AWS.
- dalbasal 9y ago
  Ultimately, technical limitations (is, problem would exist regardless of people) are not always (or usually) a limiting factor for companies working. Human limitations like having the wrong group in charge are the limiting factor. Ways around that are good, potentially.
  - kev009 9y ago
    Trying to solve it with technology is naive. If the governance of a company can't regularly align and improve itself, no technology will solve that problem.
- kev009 9y ago
  Well said but I disagree that AWS is some magical solution it's in your context just a scapegoat to catalyze change in general or a mulligan with brownfield and greenfield. It'd be far more effective to simply hire competent people to fix the organization, but that requires competent people somewhere in the governance of an organization (i.e. a board or major stakeholders).
  - hinkley 9y ago
    It’s at best a passive aggressive solution to the problem. The assertive solution is to tell the manager of the group that if they don’t find some humility quick then they’ll be finding a new job. It seems like this problem happens in organizations that equate headcount with power. Which I guess makes some sort of sense but doesn’t feel right. Plenty of companies do not have the majority of their employees working on producing the goods they sell. Especially if they’ve started automating. But as I said above, this is an ‘asleep at the wheel’ situation. It seems like it’s often not the biggest problem these companies have with their vision. And, it sometimes happens that actual tech companies start outsourcing their tech, which is a whole other troubling pattern.
smueller1234 9y ago
I'd like to challenge your implicit assertion that if due to knowing customer behavior patterns, scaling is predictable, therefore (this is the part I'm assuming you're implying) scaling is doable (or even easy). The counter argument I have is that at different sizes of operations, completely new skills become important, so you and your staff are left behind. Example: my previous employer became large enough in terms of hardware footprint (~>1M cores) that it started getting difficult to find commercial colo space. How good are software and systems engineers at electrical engineering? :)
- vidarh 9y ago
  The alternatives aren't either AWS or host yourself. You can rent managed servers for a fraction of the price of AWS instances. Granted, if you need 1M+ cores, you're going to be dealing with humans most places (including AWS) to get the best deal possible, and that also means the cost differences can change fairly substantially (e.g. the instances I know of that are in "ask us" territory are not paying anywhere near published prices) That said 1M cores is not that much. Depending on your needs it's as little as "just" 500 racks. Plenty of managed providers will be happy to provide customized service to e.g. design and/or manage a setup for something that size.
  - user5994461 9y ago
    I will take a guess that 1M core is a big compute grid. You go to google cloud and order 10k preemptible instances per datacenter. That solves half of your problem. Then the same onto SoftLayer and AWS and revise monthly who is the cheapest one. It's not very difficult. Contrary to you, I think that most places are not ready to accept that kind of contract. I have a friend who evaluated to move one of his compute grid to DigitalOcean and he was contacted to stop doing that, their servers are not meant to run at 100% CPU use all the time.
    - vidarh 9y ago
      I wasn't talking about cloud providers, as for that kind of scale you're paying 3-4 times easy vs. hiring someone to prepare a cage design for you and wire it up at a suitable colo provider. And finding colo providers that can take a sufficient numbers of racks to be worthwhile is easy.
kristianc 9y ago
They absolutely are a technology company, but compute (EC2) and storage (S3/Glacier) is a utility, like power supply. This wasn't the case back when you needed capacity planning, but today with dynamic provisioning and cheap storage, it is. No one tries to build their own power station, or make their own laptops. They're better off using engineering resources on higher order stuff, unless, like Dropbox, the margins / TCO you are getting on your storage is an absolutely huge deal.
- Symbiote 9y ago
  But people do build their own power stations or hardware if they're big enough. They might outsource most of the work, but then the gap between generating and using power is much more clearly defined.
- pbhjpbhj 9y ago
  Even domestic premises have solar with grid top-up (and they can sell back to the grid often too). Like having baseline server resources on your own hardware and AWS - or whatever - for handling high demand.
joeevans1000 9y ago
There's another good reason: avoiding AWS sticker shock, which is real. Better to spin up an OpenShift instance and know what's going on with prices. God knows what gets spent on AWS resources that have been forgotten or, more likely, no one wants to run the risk of turning off. AWS has become very expensive for startups once you're past their short freebie intro phase.
- avip 9y ago
  Every startup I know got 100-500K$ in aws credits so your "short freebie phase" is dead long in practice.
  - avip 9y ago
    [can't edit...] someone asked me on PM how to get your hands on that pile of virtual cash. I'm no expert on that, and likely YMMV, but for us, we basically called account managers in the big 3 (GCP, aws, azure) and went shopping. With some PR visibility (i.e seed, some stupid "innovation reward", I guess any alternative empty proof of existence applies), we got offers (in the 50-500K range). The way I see it, that's the de-facto standard - launch a VC funded startup, and cloud providers will align next your door to shell credits on your head.
    - mrep 9y ago
      Y combinator startup benefits: "We have deals of varying degrees of formality with many companies in the technology world either to give free services or special access to YC-funded startups. Deals range from $500,000 in cloud hosting credits from Microsoft Azure to 60% off Optimizely’s A/B testing plans." [0] Google also has a dedicated page where they partner with a bunch of VC's [1]. [0]: https://www.ycombinator.com/atyc/#connections https://www.ycombinator.com/atyc/#connections [1]: https://cloud.google.com/developers/startups/ https://cloud.google.com/developers/startups/
- viraptor 9y ago
  Why would it be different with OpenShift? Either you know what you're running or you don't. Tagging on AWS gives you per dept/team/app cost split. If you don't use something like that you'll be lost in OpenShift as well...
dalbasal 9y ago
Well...first off, I don't think that "human factors" like wanting one less manager, are always that bad. Those two reasons (for needing aws) are the technical problems that aws can solve, but you can't solve in-house. That is, they are not even solvable on a boardroom whiteboard, where the board pretend everything is just a matter of resource (money) allocation. But (imo) most of the things that companies fail on... it's not because it is impossible to do a good job. They fail for less inevitable reasons. In any case, I actually like the strategy where you try to be good at the things that you're good at but minimize things you need to be good at. Dropbox knew that aws was expensive. If the numbers here are real, then in housing would have been a byug efficiency gain (on said boardroom whiteboards) for years. Makes sense when you consider what Dropbox does. I assume they paid this price because it let them avoid being an infrastructure company. They would have had to be a very good infrastructure company. Why introduce this additional failure point, limiting factor or whatnot? I (maybe you too) have seen the kinds of problems that aws solve be the limiting factor in a bunch of companies. The fact that they're technicaly solvable is almost academic, at some point. tldr, sometimes it's good to solve certain problems with money.
smooc 9y ago
Hiring manager here. While your reasons are valid you are missing an important one: Resource scarcity: the engineers that I need allocate to infrastructure I rather have working on user facing features and improvements. Talent is scarce, being able to out source infrastructure frees up valuable engineering time. This is one of the main reasons, for example, that Spotify (I’m not working for them) is moving to google cloud.
- kev009 9y ago
  I would phrase it differently as competence scarcity. It doesn't take many people to do soup to nuts businesses.. think WhatsApp's 50 engineers, Netflix's 100 person OCA team (if you don't think OCA is a standalone product you don't know much about technology business) doing 40% of the Internet by volume.. the vast majority of people just aren't very good that work in technology. Business governance grossly underestimates the effects of mediocre performance. So the real question is why aren't governors trying to encourage WhatsApp and OCA style businesses, it's far more cost efficient. I understand why an organization itself empire builds, misaligned incentives.
- bartread 9y ago
  How does that work out? In situations, granted only a small handful, I've worked where AWS has been extensively used what ends up happening is everyone ends up doing "devops". Whatever that might mean in a formal sense, the way I see it playing out in reality is that every engineer ends up having to spend time tinkering with the infrastructure, so does it really free up valuable engineering time? For personaly projects, I use AWS and Azure (though am likely to migrate everything to a single box at OVH because it turns out to be cheaper for better performance - go figure) and it's made a certain amount of sense (up to now). At work we use dedicated hardware, because the cloud can't deliver the bang per buck.
  - noway421 9y ago
    You still need to engineer devops yes, so having an engineer allocated to that still makes sense. If "everyone ends up doing "devops"" you might not have a general infrastructure strategy (what your engineers need is a CI/CD pipeline) or doing something like microservices (which might or might not make sense depending how flexible you want to be and how many teams you have/need to have). At growth companies using cloud makes complete sense because it's all about time to market and iterating on your business proposition. Requirements change all the time and having flexibility of cloud offerings gives you the velocity. Whether at scale/in maintenance mode it makes much for sense to cut corners and optimise spending. Either way you want to focus on what brings the most business value.
carlsborg 9y ago
IMO there are many many more reasons: - you need to iterate rapidly with with scale and reliability. if you have the right expertise this becomes very quick to setup. it lets you focus 100% on product iterations. - you need (predictable) on-demand compute for crunching large amounts of data or running some batch jobs. it just doesn't make sense to do this on your own equipment. - your median cpu utilization is low, so you want to save costs and you move to a serverless architecture, effectively moving the cpu utilization you pay for to 100%. - But most importantly AWS isn't just compute and storage primitives: AWS has a vast array of abstractions on top of the cloud primitives: managed clusters, machine learning services, virtual desktops, app streaming, CI/CD pipelines, built-in IAM and Role based access control, to name a few !
- mooreds 9y ago
  Don't forget all of the cloud providers offer a robust sets of APIs and SDKs to automate provisioning of all these services. That is valuable apart from the actual service.
dvfjsdhgfv 9y ago
Arguably the most popular reason is "everyone else is using it". This is what I hear all the time. It usually goes like: "Why aren't we using AWS?" "Well, because it's a few times more expensive than our current infrastructure" "How can it be? If it's true, why all other companies are using it?" "They fell for the hype, just like you". Then we sit down, we do some calculations, we check different scenarios, and it always turn out AWS is more expensive than dedicated servers. In the past people also used a very strange argument that with AWS you don't need to pay the IT staff anymore - but I no longer hear this argument, I think most companies already realized how ridiculous it is. The most recent fad is the "serverless revolution" with some people claiming this time for sure the IT staff is unnecessary since the app developer can take care of everything. Good luck with that fantasy.
bufferoverflow 9y ago
The first one is not a reason. If you're really small, you're much better off renting servers from a cheaper competitor, cloud, or even VPS.
goatherders 9y ago
I've sold and competed against AWS in the last 4 years and you hit the nail on the head. "Someone else to blame" drives a lot of these decisions. It's also important to note, additionally, that AWS has created an excellent marketing machine for their services. I've sold AWS instances to companies that would have been fine with a rack in the closet. But they've heard about the cloud and saw a press release where a competitor was going to "the AWS" and...the checks just write themselves. As a tech enthusiast I love what's possible with AWS, Azure, GC, etc. As a salesperson I don't mind selling these services (although the margins stink compared to selling VPS or dedicated). But there is a lot of cloud-overkill going on out there.
nasalgoat 9y ago
When I did the calculations, the break-even point on AWS versus on-premises was about three servers - at that point it was cheaper to go with your own physical hardware. The big reason for most people is CAPEX vs. OPEX - even if it doesn't make financial sense in a dollar amount, it does in an accounting sense. Investors don't like to see big CAPEX numbers but seem fine with large OPEX ones.
- tr0ut 9y ago
  +1 Throw all other rational out the window if OPEX is what works. So here we are migrating to AWS..
- bonesss 9y ago
  > Investors don't like to see big CAPEX numbers but seem fine with large OPEX ones. If things go pear shaped large OPEX numbers resolve themselves as OP-erations get slimmed and shut down. Large CAPEX numbers, in the same situation, resolve themselves through liquidation and tears... More importantly, OPEX comes from next years profits yielding a business I can loan against. CAPEX comes from last years profits, increasing the amount of loans I need to get it together. It's the difference between thinking about short term profit margins and thinking about asset growth over time. Throwing a lot of optional cash today at a problem is better business than being forced to throw non-optional cash at a problem whenever the problem is feeling problematic. It's also quite freeing in terms of M&A.
  - sah2ed 9y ago
    > More importantly, OPEX comes from next years profits yielding a business I can loan against. CAPEX comes from last years profits, increasing the amount of loans I need to get it together. That's a very illuminating way to highlight the accounting fears mentioned in the gp.

rocky1138 9y ago

It's also easy to hire people who have AWS experience. It's getting harder and harder these days to find anyone who has actually seen the inside of a data centre.

Bombthecat 9y ago
The lock in is even worse than people think. Now more and more companies are locked in in Amazon. Hard to find a good old Datacenter Admin.
- FreedomWarrior 9y ago
  As an "old-school" sysadmin I have the opposite view: it's difficult to find jobs that don't require AWS these days. I know perfectly well how to provision and scale a large infrastructure and can give you 99,999% availability in any application, BGP if needed. Yet no one is interested in that. Sure I can write Ansible scripts and Terraform policies, but it's a miniscule part of my skillset and doing it on AWS is just boring compared to building the backend that powers it.

deleted 9y ago

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mdasen 9y ago

Those are definitely two good reasons, but I think there's another: you are starting up and your core competency isn't object storage. I'd argue that the core competency of Dropbox is its easy syncing. Dropbox wanted to get that to market quickly. If they had spent the time building out a data storage solution on their own, it would have meant months or years of work before they had a reliable product. Paying AWS means giving Amazon some premium, but it also means that you don't have to build out that item. It's not only about economies of scale and rapid demand. It's also about time to market. I think it's a reasonable strategy to calculate out something along the lines of "we can pay Amazon $3N to store our data or store it ourselves for $N. However, it will take a year to build a reliable, distributed data store and we don't even know if customers want our product yet. So, let's build it on Amazon and if we get traction, we'll migrate." S3 is a value-added service and creating your own S3 means sinking time. Even though data storage is very very near to Dropbox's core competency, it's really the syncing that was the selling point of Dropbox. To get that syncing product in front of customers as fast as possible, leveraging S3 made a lot of sense. It gave them a much faster time to market. As time went on, they had traction, and S3 costs mounted, it made sense for them to start investing in their own data storage. It's about figuring out what's important (the syncing is the product) and figuring out what will help you go to market fast (S3) and figuring out how to lower costs after you have traction (transitioning to in-house storage). Yes, a lot of companies use cloud services when they don't need them. However, Google Cloud's compute pricing is reasonably similar to DigitalOcean (with sustained usage discounts) and from what I hear these companies will often negotiate discounts. AWS can seem a bit pricy compared to alternatives, but I'm guessing that Amazon offers just enough discounts to large customers that they look at the cost of running their own stuff and the cost of migration and Amazon doesn't look so bad. Still, when you're trying to go to market, you don't want to be distracted building pieces that customers don't care about when you can rent it from Amazon for reasonable rates. You haven't even proven that someone wants your product yet and your time is better spent on delivering what the customers want rather than infrastructure that saves costs. As you mature as a company, the calculus can change and Dropbox seems to have hit that transition quite well.

jwhitlark 9y ago
Agreed. De-risking non core competencies is very rational, especially while iterating business strategies.

gaius 9y ago

They're on it for what can only be described as internal political limitations, meaning that they are on these services to remove the politics of technology infrastructure Heh, at one previous company it would take 6-9 months to provision a new VM and 12-18 months for a physical. Those entrenched IT organisations absolutely deserve to get their lunches eaten.

zxcmx 9y ago
Was about to make this exact comment. Endless forms to fill out to move a network cable. Buuuut at my current workplace I am starting to see some slowdowns in doing AWS stuff as "departments" get more involved. Like the "cloud team" does the account but networks must provision the VPC, and there's a "gateway review board" that gets involved if you define a new network egress or ingress etc etc. I feel like many of the early advantages of cloud in enterprise are going to get eroded as the paper pushers catch on and "add value by defining process".
- jimjimjim 9y ago
  this. and also in these days of data breaches where the sensitive data was just lying around on open s3, more are more places require approval from above before adding anything to aws.
- gaius 9y ago
  Like the "cloud team" does the account but networks must provision the VPC, and there's a "gateway review board" that gets involved Yes, this is totally antithetical to modern working practices such as "DevOps" At that place e.g. the VM team could provision you a VM (eventually) but they couldn't do you a login on it, that was some other team. But you couldn't raise the paperwork against that team until the VM was created, so everything proceeded serially, and each step at a glacial pace. The time ratio between them and Azure or AWS is literally under one minute for every month!
  - HighPlainsDrftr 9y ago
    It is - but the company probably is trying to solve a problem of past mistakes. I can only speculate, but at one point, someone must have munged a network acl and created an outage. Now all network acl's need to be reviewed before being added. Maybe someone toasted VPC peering. Or their was a private VPC full of sensitive data that all of a sudden was publically available. There was an old saying that 80% of outages were caused by humans. But there is more to account for than that. For example: - Certifications that the org has obtained - Contracts that the org has signed with customers - Compliance with laws and regulations (and international) - Insurance requirements It can add up in a hurry and can slow an org down quickly. It would be nice if an org could review all of its failures every few years and drop nearly all of its processes and procedures and start out fresh again - vowing to build around the failures of the past.

nraynaud 9y ago

There is an opportunity cost to switching too: you don’t know your gain before switching is realized (hence you don’t know over how long to amortize the project), and the switching project could fail altogether. So there is a conservative argument to be made here.

hinkley 9y ago

Because I’m in the industry I’ve seen software companies run by the legal department or the HR department. But I’ve also witnessed both software and non tech companies where the IT department controls everything. (I know that sounds weird but a company selling on premises software, for instance, should NOT be cowtowing to the IT dept). In every one of those cases the group in charge has been the wrong group and it really makes you wonder who has been asleep at the wheel so long that this has occurred. Maybe outsourcing to AWS for a couple of years is a good way to reboot the organization. Cheaper than slowly going out of business. When the fad dies down you start hiring people back who are a little more humble and cheaper than AWS.

dalbasal 9y ago
Ultimately, technical limitations (is, problem would exist regardless of people) are not always (or usually) a limiting factor for companies working. Human limitations like having the wrong group in charge are the limiting factor. Ways around that are good, potentially.
- kev009 9y ago
  Trying to solve it with technology is naive. If the governance of a company can't regularly align and improve itself, no technology will solve that problem.
kev009 9y ago
Well said but I disagree that AWS is some magical solution it's in your context just a scapegoat to catalyze change in general or a mulligan with brownfield and greenfield. It'd be far more effective to simply hire competent people to fix the organization, but that requires competent people somewhere in the governance of an organization (i.e. a board or major stakeholders).
- hinkley 9y ago
  It’s at best a passive aggressive solution to the problem. The assertive solution is to tell the manager of the group that if they don’t find some humility quick then they’ll be finding a new job. It seems like this problem happens in organizations that equate headcount with power. Which I guess makes some sort of sense but doesn’t feel right. Plenty of companies do not have the majority of their employees working on producing the goods they sell. Especially if they’ve started automating. But as I said above, this is an ‘asleep at the wheel’ situation. It seems like it’s often not the biggest problem these companies have with their vision. And, it sometimes happens that actual tech companies start outsourcing their tech, which is a whole other troubling pattern.

smueller1234 9y ago

I'd like to challenge your implicit assertion that if due to knowing customer behavior patterns, scaling is predictable, therefore (this is the part I'm assuming you're implying) scaling is doable (or even easy). The counter argument I have is that at different sizes of operations, completely new skills become important, so you and your staff are left behind. Example: my previous employer became large enough in terms of hardware footprint (~>1M cores) that it started getting difficult to find commercial colo space. How good are software and systems engineers at electrical engineering? :)

vidarh 9y ago
The alternatives aren't either AWS or host yourself. You can rent managed servers for a fraction of the price of AWS instances. Granted, if you need 1M+ cores, you're going to be dealing with humans most places (including AWS) to get the best deal possible, and that also means the cost differences can change fairly substantially (e.g. the instances I know of that are in "ask us" territory are not paying anywhere near published prices) That said 1M cores is not that much. Depending on your needs it's as little as "just" 500 racks. Plenty of managed providers will be happy to provide customized service to e.g. design and/or manage a setup for something that size.
- user5994461 9y ago
  I will take a guess that 1M core is a big compute grid. You go to google cloud and order 10k preemptible instances per datacenter. That solves half of your problem. Then the same onto SoftLayer and AWS and revise monthly who is the cheapest one. It's not very difficult. Contrary to you, I think that most places are not ready to accept that kind of contract. I have a friend who evaluated to move one of his compute grid to DigitalOcean and he was contacted to stop doing that, their servers are not meant to run at 100% CPU use all the time.
  - vidarh 9y ago
    I wasn't talking about cloud providers, as for that kind of scale you're paying 3-4 times easy vs. hiring someone to prepare a cage design for you and wire it up at a suitable colo provider. And finding colo providers that can take a sufficient numbers of racks to be worthwhile is easy.

kristianc 9y ago

They absolutely are a technology company, but compute (EC2) and storage (S3/Glacier) is a utility, like power supply. This wasn't the case back when you needed capacity planning, but today with dynamic provisioning and cheap storage, it is. No one tries to build their own power station, or make their own laptops. They're better off using engineering resources on higher order stuff, unless, like Dropbox, the margins / TCO you are getting on your storage is an absolutely huge deal.

Symbiote 9y ago
But people do build their own power stations or hardware if they're big enough. They might outsource most of the work, but then the gap between generating and using power is much more clearly defined.
pbhjpbhj 9y ago
Even domestic premises have solar with grid top-up (and they can sell back to the grid often too). Like having baseline server resources on your own hardware and AWS - or whatever - for handling high demand.

joeevans1000 9y ago

There's another good reason: avoiding AWS sticker shock, which is real. Better to spin up an OpenShift instance and know what's going on with prices. God knows what gets spent on AWS resources that have been forgotten or, more likely, no one wants to run the risk of turning off. AWS has become very expensive for startups once you're past their short freebie intro phase.

avip 9y ago
Every startup I know got 100-500K$ in aws credits so your "short freebie phase" is dead long in practice.
- avip 9y ago
  [can't edit...] someone asked me on PM how to get your hands on that pile of virtual cash. I'm no expert on that, and likely YMMV, but for us, we basically called account managers in the big 3 (GCP, aws, azure) and went shopping. With some PR visibility (i.e seed, some stupid "innovation reward", I guess any alternative empty proof of existence applies), we got offers (in the 50-500K range). The way I see it, that's the de-facto standard - launch a VC funded startup, and cloud providers will align next your door to shell credits on your head.
  - mrep 9y ago
    Y combinator startup benefits: "We have deals of varying degrees of formality with many companies in the technology world either to give free services or special access to YC-funded startups. Deals range from $500,000 in cloud hosting credits from Microsoft Azure to 60% off Optimizely’s A/B testing plans." [0] Google also has a dedicated page where they partner with a bunch of VC's [1]. [0]: https://www.ycombinator.com/atyc/#connections https://www.ycombinator.com/atyc/#connections [1]: https://cloud.google.com/developers/startups/ https://cloud.google.com/developers/startups/
viraptor 9y ago
Why would it be different with OpenShift? Either you know what you're running or you don't. Tagging on AWS gives you per dept/team/app cost split. If you don't use something like that you'll be lost in OpenShift as well...

dalbasal 9y ago

Well...first off, I don't think that "human factors" like wanting one less manager, are always that bad. Those two reasons (for needing aws) are the technical problems that aws can solve, but you can't solve in-house. That is, they are not even solvable on a boardroom whiteboard, where the board pretend everything is just a matter of resource (money) allocation. But (imo) most of the things that companies fail on... it's not because it is impossible to do a good job. They fail for less inevitable reasons. In any case, I actually like the strategy where you try to be good at the things that you're good at but minimize things you need to be good at. Dropbox knew that aws was expensive. If the numbers here are real, then in housing would have been a byug efficiency gain (on said boardroom whiteboards) for years. Makes sense when you consider what Dropbox does. I assume they paid this price because it let them avoid being an infrastructure company. They would have had to be a very good infrastructure company. Why introduce this additional failure point, limiting factor or whatnot? I (maybe you too) have seen the kinds of problems that aws solve be the limiting factor in a bunch of companies. The fact that they're technicaly solvable is almost academic, at some point. tldr, sometimes it's good to solve certain problems with money.

smooc 9y ago

Hiring manager here. While your reasons are valid you are missing an important one: Resource scarcity: the engineers that I need allocate to infrastructure I rather have working on user facing features and improvements. Talent is scarce, being able to out source infrastructure frees up valuable engineering time. This is one of the main reasons, for example, that Spotify (I’m not working for them) is moving to google cloud.

kev009 9y ago
I would phrase it differently as competence scarcity. It doesn't take many people to do soup to nuts businesses.. think WhatsApp's 50 engineers, Netflix's 100 person OCA team (if you don't think OCA is a standalone product you don't know much about technology business) doing 40% of the Internet by volume.. the vast majority of people just aren't very good that work in technology. Business governance grossly underestimates the effects of mediocre performance. So the real question is why aren't governors trying to encourage WhatsApp and OCA style businesses, it's far more cost efficient. I understand why an organization itself empire builds, misaligned incentives.
bartread 9y ago
How does that work out? In situations, granted only a small handful, I've worked where AWS has been extensively used what ends up happening is everyone ends up doing "devops". Whatever that might mean in a formal sense, the way I see it playing out in reality is that every engineer ends up having to spend time tinkering with the infrastructure, so does it really free up valuable engineering time? For personaly projects, I use AWS and Azure (though am likely to migrate everything to a single box at OVH because it turns out to be cheaper for better performance - go figure) and it's made a certain amount of sense (up to now). At work we use dedicated hardware, because the cloud can't deliver the bang per buck.
- noway421 9y ago
  You still need to engineer devops yes, so having an engineer allocated to that still makes sense. If "everyone ends up doing "devops"" you might not have a general infrastructure strategy (what your engineers need is a CI/CD pipeline) or doing something like microservices (which might or might not make sense depending how flexible you want to be and how many teams you have/need to have). At growth companies using cloud makes complete sense because it's all about time to market and iterating on your business proposition. Requirements change all the time and having flexibility of cloud offerings gives you the velocity. Whether at scale/in maintenance mode it makes much for sense to cut corners and optimise spending. Either way you want to focus on what brings the most business value.

carlsborg 9y ago

IMO there are many many more reasons: - you need to iterate rapidly with with scale and reliability. if you have the right expertise this becomes very quick to setup. it lets you focus 100% on product iterations. - you need (predictable) on-demand compute for crunching large amounts of data or running some batch jobs. it just doesn't make sense to do this on your own equipment. - your median cpu utilization is low, so you want to save costs and you move to a serverless architecture, effectively moving the cpu utilization you pay for to 100%. - But most importantly AWS isn't just compute and storage primitives: AWS has a vast array of abstractions on top of the cloud primitives: managed clusters, machine learning services, virtual desktops, app streaming, CI/CD pipelines, built-in IAM and Role based access control, to name a few !

mooreds 9y ago
Don't forget all of the cloud providers offer a robust sets of APIs and SDKs to automate provisioning of all these services. That is valuable apart from the actual service.

dvfjsdhgfv 9y ago

Arguably the most popular reason is "everyone else is using it". This is what I hear all the time. It usually goes like: "Why aren't we using AWS?" "Well, because it's a few times more expensive than our current infrastructure" "How can it be? If it's true, why all other companies are using it?" "They fell for the hype, just like you". Then we sit down, we do some calculations, we check different scenarios, and it always turn out AWS is more expensive than dedicated servers. In the past people also used a very strange argument that with AWS you don't need to pay the IT staff anymore - but I no longer hear this argument, I think most companies already realized how ridiculous it is. The most recent fad is the "serverless revolution" with some people claiming this time for sure the IT staff is unnecessary since the app developer can take care of everything. Good luck with that fantasy.

bufferoverflow 9y ago

The first one is not a reason. If you're really small, you're much better off renting servers from a cheaper competitor, cloud, or even VPS.

goatherders 9y ago

I've sold and competed against AWS in the last 4 years and you hit the nail on the head. "Someone else to blame" drives a lot of these decisions. It's also important to note, additionally, that AWS has created an excellent marketing machine for their services. I've sold AWS instances to companies that would have been fine with a rack in the closet. But they've heard about the cloud and saw a press release where a competitor was going to "the AWS" and...the checks just write themselves. As a tech enthusiast I love what's possible with AWS, Azure, GC, etc. As a salesperson I don't mind selling these services (although the margins stink compared to selling VPS or dedicated). But there is a lot of cloud-overkill going on out there.

nasalgoat 9y ago

When I did the calculations, the break-even point on AWS versus on-premises was about three servers - at that point it was cheaper to go with your own physical hardware. The big reason for most people is CAPEX vs. OPEX - even if it doesn't make financial sense in a dollar amount, it does in an accounting sense. Investors don't like to see big CAPEX numbers but seem fine with large OPEX ones.

tr0ut 9y ago
+1 Throw all other rational out the window if OPEX is what works. So here we are migrating to AWS..
bonesss 9y ago
> Investors don't like to see big CAPEX numbers but seem fine with large OPEX ones. If things go pear shaped large OPEX numbers resolve themselves as OP-erations get slimmed and shut down. Large CAPEX numbers, in the same situation, resolve themselves through liquidation and tears... More importantly, OPEX comes from next years profits yielding a business I can loan against. CAPEX comes from last years profits, increasing the amount of loans I need to get it together. It's the difference between thinking about short term profit margins and thinking about asset growth over time. Throwing a lot of optional cash today at a problem is better business than being forced to throw non-optional cash at a problem whenever the problem is feeling problematic. It's also quite freeing in terms of M&A.
- sah2ed 9y ago
  > More importantly, OPEX comes from next years profits yielding a business I can loan against. CAPEX comes from last years profits, increasing the amount of loans I need to get it together. That's a very illuminating way to highlight the accounting fears mentioned in the gp.