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I don't see what's surprising here. This is the ski rental problem [0]. Would it surprise anyone to learn that renting a car is more expensive in the long run

I don't see what's surprising here. This is the ski rental problem [0]. Would it surprise anyone to learn that renting a car is more expensive in the long run compared to buying one? This is the same thing, only the time scales are different. [0]: https://en.wikipedia.org/wiki/Ski_rental_problem https://en.wikipedia.org/wiki/Ski_rental_problem

yazr 8y ago
Because the cloud has economies of scale and benefits from specialization (cheaper power, bulk buying prices, remote land prices, etc) Hence, some of these saving should be passed on to consumers and it should be cheaper. The counter argument is that the cloud is over-engineered (redundancy, backups, better software) for enterprise customers. You u are paying for all these benefits whether u want to or not.
- maltalex 8y ago
  Most companies you rent stuff from enjoy the benefit of scale. Car rental companies operate cars at a lower cost than the average car owner. Still, “owning X” and “getting a working X for a while at a time and place most convenient to you” are two different services.
- vidarh 8y ago
  There are two distinct problems with that: One is that AWS (and Azure and Google) are taking advantage of their brand recognition and are pricing their services extremely high compared to their competition. For some that is worth it as they need services they don't get elsewhere, but for a lot of people there are far cheaper cloud services out there. Sometimes even hybrid solutions (e.g. a particular problem with AWS are the absolutely insane bandwidth prices - if you "need" to store your data on S3 because they're the only ones you trust for durability or because it fits in with other parts of your workflow - but you access most objects regularly enough from outside AWS that bandwidth prices are a high part of your cost, for example, it can often pay to rent servers somewhere like Hetzner just to act as caches) The other problem is that while it looks straightforward, as much as we might like to think so, servers are not as much of a commodity as we'd like to think. Components are. The really big savings in running your own comes when you measure how much RAM you need and what CPU you need, and whether or not disk IO is an issue, and configure servers that fit your use better. If the cloud providers have instances that fit your needs, awesome, you can get a decent price (if you shop around). If they don't, you can easily end up paying a lot for components in your instances that you don't need. When you don't know what you need, it might be ok to pay that premium, but as soon as you know what you need, there are many cases where buying your own allows you a degree of specialisation that does not pay for the cloud providers because it's better to provide a smaller range where they can get economy of scale. I've seen cases where e.g. being able to shove enough RAM in a server cut costs by 90% or more vs. splitting the load over multiple lower RAM cloud instances. I'm not saying it will stay this way forever - there are certainly regularly more and more combinations that you can find decently priced cloud instances for - but there are still tons of cases where building your own (or having someone configure one for you) is so much cheaper that it's nearly crazy not to.
- swebs 8y ago
  I've seen just the opposite. A VPS from a cloud provider is often 2-3x the cost of an equivalent Linode.
  - desdiv 8y ago
    I think your pricing information might be slightly out of date. AWS Lightsail's $5 plan is equivalent or better than Linode's $5 plan. Plus AWS Lightsail has an even more barebones plan at $3.5 per month. Two years ago you would be perfectly correct. The cheapest AWS option back then would be a micro EC2 instance at around $20 per month IIRC.
    - tyingq 8y ago
      Does Lightsail still throttle CPU heavily? https://www.vpsbenchmarks.com/posts/amazon_lightsail_1gb_is_no_match_for_10_vps_from_linode_do_vultr https://www.vpsbenchmarks.com/posts/amazon_lightsail_1gb_is_...
    - _hyn3 8y ago
      Lightsail is basically a toy to compete with Vultr/DO/OVH/etc. You can't even rename a server or change its metadata. You can't resize a server (except for taking a snapshot and building a new server). Essentially, you can't make any changes to a server and there are zero tools for organizing, tagging, or even adding a description field. Of course, you cannot manage Lightsail instances using the AWS console (or even see them). All of the powerful AWS tools are invisible to you as well, and your entire Lightsail infrastructure is invisible from within AWS itself (except for the bill). Lightsail is really great for personal sandbox servers, or for moving to AWS on the cheap, but it's not even as capable as its worst competitor (and certainly cuts out a lot of features compared to real AWS.) The worst part is probably the surprising and seemingly minor factor of being able to simply rename or resize a server. This makes using it in a team or production environment surprisingly difficult. With that all said, I still find Lightsail very useful for small prototyping and other fast jobs (or a Lambda replacement -- it's way cheaper than running any reasonably busy Lambda function), but I can't see using it for real production usage. Your best bet for real production usage, or something that will someday move into production, would be probably vultr/DO/linode. (OVH really wants to be great, and it should be because the hardware is really great, but the dashboard and billing are so bizarrely bad..) AWS is good when you have a virtually unlimited budget or don't mind running up the bill while you're getting rolling, but getting locked into AWS will mean that you are stuck with it forever. It's very hard to migrate away if you start using a vendor-specific thing like DynamoDB (to be fair, Google Firebase has exactly the same issue; Instances are basically fungible, but proprietary data stores are not)
- Const-me 8y ago
  > the cloud has economies of scale and benefits from specialization For GPUs it's the opposite. With some legal BS, NVidia forbids Amazon to rent out GeForces. Doesn't look OK to me, I don't think NVidia has a right to deside how people will use the hardware they have bought. Anyway, Amazon has to buy Teslas, and Teslas are 10 times more expensive.
denzil_correa 8y ago
So, what's the optimal solution according to the Ski Rental problem?
- hannasanarion 8y ago
  It depends on your needs. If you are absolutely certain that you are going to rent skis so often that you will spend more then buying them (plus the costs of storage, transport, and maintenance), then buying is the right choice.
- screye 8y ago
  If you have no prior knowledge of how often you will be skiing, then the optimal solution is exactly 50% the cost of buying the skis upfront.
  - sp332 8y ago
    So I'll just buy one ski then. That way I get double the problems for only half the cost savings!
davnicwil 8y ago
But the ski rental problem as described there misses the same factors as the AWS example: it does not account for the additional costs of ownership vs renting. The analogy doesn't quite map for all aspects so I'll stick with the ski example to show it's not specific to cloud computing: Owning skis has a load of associated costs ranging from simple to more complex: storage, maintenance, carrying them to and from the airport, having to spend a lot of energy on the decision of which pair to buy as it will be expensive to change my decision later, having the general background burden of owning another thing that I have to think about on some level even when I am not skiing. All these things are ultimately paid for with money directly, or time, or mental energy that I could be spending on other things. What's the cost of all those combined? It's really hard to say and may even extend beyond a simple economic function and get into the philosophical arena. But you can't deny there is a cost and you can't ignore that cost when evaluating if renting is more or less expensive than owning, over an arbitrary time period.
- bunderbunder 8y ago
  Concrete example: I own skis. But if I'm going on a ski vacation instead of a day trip, I rent them. That decision has nothing to do with the cost to rent skis vs. what they sell for, and everything to do with the fact that I can rent skis for about the same as what it would cost me to transport my own skis and boots to Breckenridge and back. I suspect that there is something like that (only not at all) going on with machine learning kit: If you've got exactly one person training models, and they're doing it all the time, then yeah, it's cheaper to own your own hardware. If you've got several people all trying to share the training rig, then you start having to worry about all the costs associated with scheduling time, delays if someone else got their first (especially if they're doing deep learning and will be monopolizing the server for upwards of a week), etc. Once you factor all those full-lifecycle costs in, the cloud might start to look relatively cheaper.
dceddia 8y ago
TIL "ski rental problem". Makes sense that this would be an entire class of problem. To me it's been the "should I buy an airplane" problem. (Basically, you have to rent a lot, > 50 hrs/year, before buying makes sense financially, and even then it might not work out very well unless you fly a ton)

yazr 8y ago

Because the cloud has economies of scale and benefits from specialization (cheaper power, bulk buying prices, remote land prices, etc) Hence, some of these saving should be passed on to consumers and it should be cheaper. The counter argument is that the cloud is over-engineered (redundancy, backups, better software) for enterprise customers. You u are paying for all these benefits whether u want to or not.

maltalex 8y ago
Most companies you rent stuff from enjoy the benefit of scale. Car rental companies operate cars at a lower cost than the average car owner. Still, “owning X” and “getting a working X for a while at a time and place most convenient to you” are two different services.
vidarh 8y ago
There are two distinct problems with that: One is that AWS (and Azure and Google) are taking advantage of their brand recognition and are pricing their services extremely high compared to their competition. For some that is worth it as they need services they don't get elsewhere, but for a lot of people there are far cheaper cloud services out there. Sometimes even hybrid solutions (e.g. a particular problem with AWS are the absolutely insane bandwidth prices - if you "need" to store your data on S3 because they're the only ones you trust for durability or because it fits in with other parts of your workflow - but you access most objects regularly enough from outside AWS that bandwidth prices are a high part of your cost, for example, it can often pay to rent servers somewhere like Hetzner just to act as caches) The other problem is that while it looks straightforward, as much as we might like to think so, servers are not as much of a commodity as we'd like to think. Components are. The really big savings in running your own comes when you measure how much RAM you need and what CPU you need, and whether or not disk IO is an issue, and configure servers that fit your use better. If the cloud providers have instances that fit your needs, awesome, you can get a decent price (if you shop around). If they don't, you can easily end up paying a lot for components in your instances that you don't need. When you don't know what you need, it might be ok to pay that premium, but as soon as you know what you need, there are many cases where buying your own allows you a degree of specialisation that does not pay for the cloud providers because it's better to provide a smaller range where they can get economy of scale. I've seen cases where e.g. being able to shove enough RAM in a server cut costs by 90% or more vs. splitting the load over multiple lower RAM cloud instances. I'm not saying it will stay this way forever - there are certainly regularly more and more combinations that you can find decently priced cloud instances for - but there are still tons of cases where building your own (or having someone configure one for you) is so much cheaper that it's nearly crazy not to.
swebs 8y ago
I've seen just the opposite. A VPS from a cloud provider is often 2-3x the cost of an equivalent Linode.
- desdiv 8y ago
  I think your pricing information might be slightly out of date. AWS Lightsail's $5 plan is equivalent or better than Linode's $5 plan. Plus AWS Lightsail has an even more barebones plan at $3.5 per month. Two years ago you would be perfectly correct. The cheapest AWS option back then would be a micro EC2 instance at around $20 per month IIRC.
  - tyingq 8y ago
    Does Lightsail still throttle CPU heavily? https://www.vpsbenchmarks.com/posts/amazon_lightsail_1gb_is_no_match_for_10_vps_from_linode_do_vultr https://www.vpsbenchmarks.com/posts/amazon_lightsail_1gb_is_...
  - _hyn3 8y ago
    Lightsail is basically a toy to compete with Vultr/DO/OVH/etc. You can't even rename a server or change its metadata. You can't resize a server (except for taking a snapshot and building a new server). Essentially, you can't make any changes to a server and there are zero tools for organizing, tagging, or even adding a description field. Of course, you cannot manage Lightsail instances using the AWS console (or even see them). All of the powerful AWS tools are invisible to you as well, and your entire Lightsail infrastructure is invisible from within AWS itself (except for the bill). Lightsail is really great for personal sandbox servers, or for moving to AWS on the cheap, but it's not even as capable as its worst competitor (and certainly cuts out a lot of features compared to real AWS.) The worst part is probably the surprising and seemingly minor factor of being able to simply rename or resize a server. This makes using it in a team or production environment surprisingly difficult. With that all said, I still find Lightsail very useful for small prototyping and other fast jobs (or a Lambda replacement -- it's way cheaper than running any reasonably busy Lambda function), but I can't see using it for real production usage. Your best bet for real production usage, or something that will someday move into production, would be probably vultr/DO/linode. (OVH really wants to be great, and it should be because the hardware is really great, but the dashboard and billing are so bizarrely bad..) AWS is good when you have a virtually unlimited budget or don't mind running up the bill while you're getting rolling, but getting locked into AWS will mean that you are stuck with it forever. It's very hard to migrate away if you start using a vendor-specific thing like DynamoDB (to be fair, Google Firebase has exactly the same issue; Instances are basically fungible, but proprietary data stores are not)
Const-me 8y ago
> the cloud has economies of scale and benefits from specialization For GPUs it's the opposite. With some legal BS, NVidia forbids Amazon to rent out GeForces. Doesn't look OK to me, I don't think NVidia has a right to deside how people will use the hardware they have bought. Anyway, Amazon has to buy Teslas, and Teslas are 10 times more expensive.

denzil_correa 8y ago

So, what's the optimal solution according to the Ski Rental problem?

hannasanarion 8y ago
It depends on your needs. If you are absolutely certain that you are going to rent skis so often that you will spend more then buying them (plus the costs of storage, transport, and maintenance), then buying is the right choice.
screye 8y ago
If you have no prior knowledge of how often you will be skiing, then the optimal solution is exactly 50% the cost of buying the skis upfront.
- sp332 8y ago
  So I'll just buy one ski then. That way I get double the problems for only half the cost savings!

davnicwil 8y ago

But the ski rental problem as described there misses the same factors as the AWS example: it does not account for the additional costs of ownership vs renting. The analogy doesn't quite map for all aspects so I'll stick with the ski example to show it's not specific to cloud computing: Owning skis has a load of associated costs ranging from simple to more complex: storage, maintenance, carrying them to and from the airport, having to spend a lot of energy on the decision of which pair to buy as it will be expensive to change my decision later, having the general background burden of owning another thing that I have to think about on some level even when I am not skiing. All these things are ultimately paid for with money directly, or time, or mental energy that I could be spending on other things. What's the cost of all those combined? It's really hard to say and may even extend beyond a simple economic function and get into the philosophical arena. But you can't deny there is a cost and you can't ignore that cost when evaluating if renting is more or less expensive than owning, over an arbitrary time period.

bunderbunder 8y ago
Concrete example: I own skis. But if I'm going on a ski vacation instead of a day trip, I rent them. That decision has nothing to do with the cost to rent skis vs. what they sell for, and everything to do with the fact that I can rent skis for about the same as what it would cost me to transport my own skis and boots to Breckenridge and back. I suspect that there is something like that (only not at all) going on with machine learning kit: If you've got exactly one person training models, and they're doing it all the time, then yeah, it's cheaper to own your own hardware. If you've got several people all trying to share the training rig, then you start having to worry about all the costs associated with scheduling time, delays if someone else got their first (especially if they're doing deep learning and will be monopolizing the server for upwards of a week), etc. Once you factor all those full-lifecycle costs in, the cloud might start to look relatively cheaper.

dceddia 8y ago

TIL "ski rental problem". Makes sense that this would be an entire class of problem. To me it's been the "should I buy an airplane" problem. (Basically, you have to rent a lot, > 50 hrs/year, before buying makes sense financially, and even then it might not work out very well unless you fly a ton)