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The cloud's cost savings are not in your 300 individual machines. In fact, I'd bet that your 300 machines are much cheaper than the equivalent on AWS. Rather,

The cloud's cost savings are not in your 300 individual machines. In fact, I'd bet that your 300 machines are much cheaper than the equivalent on AWS. Rather, the cost savings come from the salaries of you and the "one other guy" you mentioned. If cloud hardware can bring your staff of 2 down to 1, then the cost savings are huge. More-so if they can bring it down to 0 and have devs manage the hosted infrastructure. Each of your salaries is likely near or higher than the cost of running all those machines.

nasalgoat 8y ago
In my experience with cloud - pushing 8 years now - it's a total fallacy that you can just run without admins. Every time I've come in to clean up a giant mess left by "devops" who were actually just devs who knew nothing about administration of servers I've found massive amounts of waste, duplication, zero optimizations and poorly operating systems that even a intermediate admin would have helped to mitigate. One place, just doing a bit of tuning and moving a few services on-prem resulted in a $200K/year savings. Developers and Administrators have different priorities and I can count on one hand the number of true "DevOps" people I know - the rest are either decent admins and poor devs or decent devs but poor admins. The idea is nice but the reality isn't quite what its made out to be.
- user5994461 8y ago
  It's a fallacy to save money on personnel. The time saved by not managing low level hardware will be assigned to other tasks. The savings are actually done on instance costs and flexibility. Physical instances have too much over provisioning and zero flexibility. You can easily be paying for an order of magnitude above the actually used capacity. (This can be helped with VmWare virtualization instead of bare metal but the amount of new companies using VmWare is shrinking and licenses are expensive.) Whereas with the cloud, you can half any instance CPU/memory to save half the money. There is even build in monitoring to analyze usage. There is little waste.
  - speedplane 8y ago
    > Physical instances have too much over provisioning and zero flexibility. You can easily be paying for an order of magnitude above the actually used capacity. The cost of the hardware is not the issue. Paying for 600 machines when you actually need 300 probably "wastes" $50-80k/year in over-provisioned hardware. Hiring a skilled admin to figure out what's going on, optimize the network, and reduce those 600 machines down to 300 probably costs at least $150k/yr in their salary+benefits. The cloud does not decrease the cost of the hardware (it's actually more expensive), but it allows you to reduce the number of admins managing it. That's the cost savings. Given the above example, what would any reasonable general manager do: hire someone to make things more efficient, or just pay for the over-provisioning?
    - user5994461 8y ago
      You're hopefully kidding when you say that the costs of the hardware is not an issue. Server grade hardware costs an arm. 600 servers at $10k each, that's $6M upfront. Then another $6M within 3-5 years to renew them. Of course in that example you'd pay someone, even multiple people in fact, to make things more efficient.

nasalgoat 8y ago

In my experience with cloud - pushing 8 years now - it's a total fallacy that you can just run without admins. Every time I've come in to clean up a giant mess left by "devops" who were actually just devs who knew nothing about administration of servers I've found massive amounts of waste, duplication, zero optimizations and poorly operating systems that even a intermediate admin would have helped to mitigate. One place, just doing a bit of tuning and moving a few services on-prem resulted in a $200K/year savings. Developers and Administrators have different priorities and I can count on one hand the number of true "DevOps" people I know - the rest are either decent admins and poor devs or decent devs but poor admins. The idea is nice but the reality isn't quite what its made out to be.

user5994461 8y ago
It's a fallacy to save money on personnel. The time saved by not managing low level hardware will be assigned to other tasks. The savings are actually done on instance costs and flexibility. Physical instances have too much over provisioning and zero flexibility. You can easily be paying for an order of magnitude above the actually used capacity. (This can be helped with VmWare virtualization instead of bare metal but the amount of new companies using VmWare is shrinking and licenses are expensive.) Whereas with the cloud, you can half any instance CPU/memory to save half the money. There is even build in monitoring to analyze usage. There is little waste.
- speedplane 8y ago
  > Physical instances have too much over provisioning and zero flexibility. You can easily be paying for an order of magnitude above the actually used capacity. The cost of the hardware is not the issue. Paying for 600 machines when you actually need 300 probably "wastes" $50-80k/year in over-provisioned hardware. Hiring a skilled admin to figure out what's going on, optimize the network, and reduce those 600 machines down to 300 probably costs at least $150k/yr in their salary+benefits. The cloud does not decrease the cost of the hardware (it's actually more expensive), but it allows you to reduce the number of admins managing it. That's the cost savings. Given the above example, what would any reasonable general manager do: hire someone to make things more efficient, or just pay for the over-provisioning?
  - user5994461 8y ago
    You're hopefully kidding when you say that the costs of the hardware is not an issue. Server grade hardware costs an arm. 600 servers at $10k each, that's $6M upfront. Then another $6M within 3-5 years to renew them. Of course in that example you'd pay someone, even multiple people in fact, to make things more efficient.