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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 th

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.
      - notyourday 9y ago
        If you need to pivot before you are cashflow positive, then you dont have a business and you never had a business. I keep being amazed that total business failures that result in pivots are considered to be successes in the startup world.

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.
    - notyourday 9y ago
      If you need to pivot before you are cashflow positive, then you dont have a business and you never had a business. I keep being amazed that total business failures that result in pivots are considered to be successes in the startup world.