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This isn’t such an obvious decision. Running your own datacenter is difficult. Besides racking and stacking, you need to deal with power and cooling. Most likel

This isn’t such an obvious decision. Running your own datacenter is difficult. Besides racking and stacking, you need to deal with power and cooling. Most likely you will outsource all of this to a collocations management services initially, which becomes your overhead just like AWS/Google. But they have economies of scale, in addition, they have expertise in managing all of this equipment with very high reliability. They also have tons of spare capacity (elastic) that are at your disposal, you’ll lose this in your own datacenter. On top of that you need to hire specialists, and 24/7 noc teams, for making sure your site is always up. And it’s not just one, you need a minimum of two, geographically separated so that they are not effected by the same fire, earthquake, power outage from ice/wind/electrical storms. At the end of the day, You need to beat AWS’ profit margin, and you still would have a huge amount of difficulty being able to match the uptime that you get when you’re so easily able to distribute services across regions and availability zones that are resilient to all the real world problems listed above. And all of those do happen. Even for the largest of companies, I’m not sure it makes sense to compete with these services except in the most niche of markets (like dropbox and storage).

supernovae 9y ago
The cloud doesn't really have economies of scale unless your workloads scale opposite of pricing - which they very rarely do. For small shops, sure, but for the example of 500 instances running - you could lease space and grow with physical servers at a better economic scale. If you only need 500 servers for 1 busy season and can drop back down to 100 then stay in the cloud. If you need 500 always running instances and your growth is 20% year over year, i can almost guarantee a good colo will be cheaper and faster if you use the same automation and configuration as code philosophies in private dc as you would in public cloud. Puppet/foreman/cobbler/ansible/chef all work great in private DC
- bluejekyll 9y ago
  In general, I think it’s a wash. The margins you save on end up costing you in other ways, such as development velocity and having access to easily deployed high-scale solutions like dynamo and managed instances like RDS. it takes time and organizational know-how to get to a point where similar things can be managed in the same way as AWS. Again, there are niche segments where this might not be true, 500 constant machines churning through massive datasets all day-long, etc, might fall into that category, but it’s not slam dunk.
  - lallysingh 9y ago
    The margins you're paying for include functionality you don't use and your own cost of integration, observation, and management of their stuff. The principal advantage of using a cloud provider is avoiding capital costs and any useful apis they have that you'd otherwise have to develop/maintain in-house.
    - supernovae 9y ago
      There are lots of open source products that offer programmatic/desired state/idempotent config & apis for provisioning and hardware lifecycle management in private dc.
      - user5994461 9y ago
        There are not even close to how good and mature the AWS tools are.
    - notyourday 9y ago
      The most fun thing about startup world is that it pretends that normal rules of economics and accounting do not apply to it (until a startup runs out of money) $X in CapEx makes balance sheet look better than $X in OpEx.
      - lallysingh 9y ago
        As generously as I can put it: It's a form of denial that people use when overwhelmed with everything else. There's typically too little real data on what the money's going to look like until a bunch of things are tried out, each essentially a random variable. So instead of freaking out about that, just bandage over it with some lies to yourself until you can actually start addressing it. Businesses in well-known markets can start estimating their costs + potential revenue early, and optimize early. But for a business that might "pivot" a few times before finding "fit", how do you do it? You just look at time (runway: burn rate * remaining capital) you have to try stuff. It's not great, but I can understand why some people do it.

supernovae 9y ago

The cloud doesn't really have economies of scale unless your workloads scale opposite of pricing - which they very rarely do. For small shops, sure, but for the example of 500 instances running - you could lease space and grow with physical servers at a better economic scale. If you only need 500 servers for 1 busy season and can drop back down to 100 then stay in the cloud. If you need 500 always running instances and your growth is 20% year over year, i can almost guarantee a good colo will be cheaper and faster if you use the same automation and configuration as code philosophies in private dc as you would in public cloud. Puppet/foreman/cobbler/ansible/chef all work great in private DC

bluejekyll 9y ago
In general, I think it’s a wash. The margins you save on end up costing you in other ways, such as development velocity and having access to easily deployed high-scale solutions like dynamo and managed instances like RDS. it takes time and organizational know-how to get to a point where similar things can be managed in the same way as AWS. Again, there are niche segments where this might not be true, 500 constant machines churning through massive datasets all day-long, etc, might fall into that category, but it’s not slam dunk.
- lallysingh 9y ago
  The margins you're paying for include functionality you don't use and your own cost of integration, observation, and management of their stuff. The principal advantage of using a cloud provider is avoiding capital costs and any useful apis they have that you'd otherwise have to develop/maintain in-house.
  - supernovae 9y ago
    There are lots of open source products that offer programmatic/desired state/idempotent config & apis for provisioning and hardware lifecycle management in private dc.
    - user5994461 9y ago
      There are not even close to how good and mature the AWS tools are.
  - notyourday 9y ago
    The most fun thing about startup world is that it pretends that normal rules of economics and accounting do not apply to it (until a startup runs out of money) $X in CapEx makes balance sheet look better than $X in OpEx.
    - lallysingh 9y ago
      As generously as I can put it: It's a form of denial that people use when overwhelmed with everything else. There's typically too little real data on what the money's going to look like until a bunch of things are tried out, each essentially a random variable. So instead of freaking out about that, just bandage over it with some lies to yourself until you can actually start addressing it. Businesses in well-known markets can start estimating their costs + potential revenue early, and optimize early. But for a business that might "pivot" a few times before finding "fit", how do you do it? You just look at time (runway: burn rate * remaining capital) you have to try stuff. It's not great, but I can understand why some people do it.