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Bank of America's CEO says it's saved $2B per year by building its own cloud
- nartz 7y agoThis is completely false - I imagine they didn't take into account how much the migration and upkeep actually cost them. AWS's promise is not that its infrastructure itself is cheaper in terms of number of servers, or otherwise. Its cheaper in that it helps automate a lot of manual things away.
- Retric 7y ago2 Billion per year buys a lot of R&D. So, while Amazon is great for small to mid sized companies, BoA is huge and would need massive discounts to consider using Amazon.
- earthshots 7y agoAmazon can invest heavily in new tech because it has millions of customers who get the benefit. BofA can only invest in new tech to the degree that it benefits one (admittedly large) customer. This makes the decision seem more suspect in the long-run.
- daxelrod 7y agoCounterpoint: BoFA can invest in tech that makes sense for its specialized use case that Amazon never would.
- earthshots 7y agoTo the degree that BofA has needs that are unique just to itself, and do not overlap other large business's use cases, this is true. But that seems like an awfully small degree. A billion dollars sounds like a ton of money on HN, but that's a thousand person tech team for 3 or 4 years. It's enough to do some good tech, but it's very, very easy to spend that much engineering capacity.
- Retric 7y agoThis is 2 billion dollars per year. That’s 6-8,000 people working full time indefinitely. Further they don’t need to spend that on staff they can have a large dev team, better hardware, more bandwidth, a 100 person support team 24/7 365, and still save money.
- api 7y agoIf you manage things right its not that hard. Unfortunately there are not all that many good devops people. Expect to pay them as much as higher end devs. But overall you can save a ton of money hiring some of those and passing on the outrageous AWS markup on CPU and bandwidth.
- pacofvf 7y agoI had experience in Quartz (BofA cloud), and deploying is 100 times easier than AWS, everything is automated. Imagine building a cloud service where you trust all your clients, and all must share the same information if they have the correct auth, what I trying to say is that their use-case actually made it simpler, that's where the savings in software had came from.
- Mathnerd314 7y agoSo we'll hear about a BoA hack in a few years where the attacker got into the cloud somehow and then had unlimited access to all the other servers? Great. Exactly what I want from a bank. /s
- cnlwsu 7y agoOr you can look at it as a single correct auth and encryption mechanism is shared company wide vs each individual teams intern inventing new was to base64 encode your password. Glass half full or empty
- ascii_only 7y agoDoesn't this mean one compromised account = all data compromised?
- pacofvf 7y agoWell that's the same with any cloud provider, one compromised account with enough access could be catastrophic. In BofA there is an AWS IAM equivalent. Also the BofA cloud is not accesible from the Internet.
- adventured 7y agoOutline: https://outline.com/nDEM3d https://outline.com/nDEM3d
- awaisraad 7y agoThanks, I couldn't read it because of the pay wall but at this link I could read it without any hassle.
- Pick-A-Hill2019 7y agoThank you for the link (article was unreadable on original posted link)
- downandout 7y agoPeople seem to be posting hard-paywalled links more and more around here. They were supposed to be banned, but I guess the rules are selectively enforced by @dang here nowadays. The link to the article should be changed to this Outline link.
- panarky 7y agoBad title. They didn't switch from AWS to private cloud. They consolidated 60 data centers with 200k servers to 23 data centers and 70k servers.
- toomuchtodo 7y agoAnd it's still cheaper than public cloud. Look at cloud provider margins, that profit is your opportunity at this scale (and BoA, JPM, etc are big enough to run their own technology teams, and do, having worked with them). Fat public cloud margins come from somewhere. This isn't a religious argument. Some workloads are fine on prem (known load profiles, shed infrequent traffic spikes instead of bursting), some need cloud (Netflix.com, remember all of their video content streams from their own CDN hardware), it's ensuring you're making the decision in an objective way. Sort of, but not quite, similar to making software budget and timeline estimates. If software is eating the world, and every company is turning into a software company, why would you be surprised that orgs above a certain size wouldn't also turn into an infrastructure company? You don't have to compete against Amazon, you just need to satisfy your engineering needs for your vertical and the software that drives it. Amazon needs to be everything to everyone.
- thorwasdfasdf 7y agobut why aren't those fat profit margins being competed away by competitors?
- sairahul82 7y agoIf you know your traffic well, private cloud saves a lot of money. Few years back i bet hybrid clouds will take over and for some reason it did not happen. I still believe hybrid cloud is the solution for mid size and up companies. You definitely need cloud provides for handling traffic spikes.
- api 7y agoNobody ever got fired for using AWS.
- m0xte 7y agoYet
- thrower123 7y agoI'm sure at least a few companies have gone bankrupt or people have gotten pink-slipped for using AWS and not paying attention to auto-scaling settings... It's scarily easy to accrue huge bills if you're not watching things closely.
- shrubble 7y agoI am not at liberty to say the company name, but i do directly know of one person at a director level who was fired for using AWS. They turned on encryption for an option and did not realize the huge price difference between the encrypted and unencrypted option meant $9000 per day in additional charges. After 1 month (30 days) this came to light, and he was fired.
- brokensegue 7y agothat's not what people mean by the phrase "Nobody ever got fired for using AWS." http://wiki.c2.com/?NobodyEverGotFiredForBuyingMicrosoft http://wiki.c2.com/?NobodyEverGotFiredForBuyingMicrosoft
- shrubble 7y ago
- reilly3000 7y agoIs this a story about virtualization? I fail to see the distinction between data center and private cloud in this context.
- rolltiide 7y agoI was going to explain how there's no difference but then I thought about the more facetious terminology cloud - someone else's computers private cloud - someone else's computers that you own???? or that nobody else uses, but in this context you also own???
- rlpb 7y agoCloud also means access on-demand by API. Private cloud usually refers to that same abstraction layer. Hardware provisioning is abstracted away from use and available on-demand from a pool, and likewise deployment works automatically via the same or an equivalent API. That's very different from the operation of a typical company-owned datacenter from a couple of decades ago.
- stestagg 7y agoI think in this context it relates to the overheads of provisioning new services. Traditional virtualized hosting environments typically also come with varying levels of technical overheads when setting up new boxes. What bofa have is a virtually self-service (some business approvals needed) user interface with the ability for devs to set up new virtual servers with little/no knowledge of the underlying hosting infrastructure.
- Someone1234 7y agoI think a strong argument can be made either way. There's definitely financial savings to be had by doing it in-house (either literally or utilizing existing data centers as here). But what I've experienced is that companies are often attracted to Big Cloud™ not just for financial reasons but to flatten/simplify their corporate reporting structure. It is the ultimate delegation. This isn't simply about having fewer staff (although that can reduce internal politics and inefficiencies), but making fewer decisions and more importantly reducing the potential for making the wrong decisions (which can be career-costly, regardless of right decisions made previously). These "soft" costs/savings are rarely discussed because they cannot be measured, unlike a balance sheet. But there's definitely a whole other dimension to infrastructure outsourcing that is worthy of note. In this case BoA are saving money but in exchange retain additional layers of staffing, that require oversight, and ultimately decision makers willing to take risks.
- mywittyname 7y agoAlso reducing friction in getting products to market. A small team with their own BigCloud account is probably going to deliver a product to market much faster than one that needs to go through the friction of dealing with the various IT departments which invariably exist at large companies. There is absolutely value to delivering a product to market a year or more sooner than otherwise.
- McAtNite 7y agoThe friction from various IT departments are often beneficial. I’m probably speaking from a point of bias as I’m one of those departments, but we often have to sanity check the implementation of things and review the security implications. I’ve encountered quite a few devs whose only focus is on achieving the specified goal without considering the full security scope. I don’t blame them, that’s what they are there for. Stepping in for ensuring the customer security and regulation requirements is what I’m here for.
- testplzignore 7y agoBut at a large company, how likely is it that a team is going to have their own AWS account AND have free rein over it? You'll still have all of the friction for compliance and security. And turf battles. It's like using package managers like Maven and npm. Sure, they make going to market much faster for small organizations. But at companies that have strict security procedures, downloading unvetted stuff from the internets and putting it into production does not fly. You'll have internal repos that work with your package manager tools, but nothing gets into those repos without at least a cursory review.
- vkaku 7y agoIn my opinion, a company can save money on a cloud if it has these things: - Access to cheap real estate - Access to enough human capital, especially a team of 80+ to operate all aspects of a cloud: hardware, switches, openstack / kubernetes - Requires scale of 20k+ servers = 320k+ VMs and a strong inclination to not host on AWS/Azure/Others. - Lease to servers costing about $250 / server / mo. With AMD, you could go half of that, with VMs costing $10 a month. Add network costs of $15 / 2 ports / server / month.
- gumby 7y agoI'm not really sure why this should be a surprise. Just as big companies use a mixture of owned and rented real estate for various reasons, the same is true of other large expenses. If you have a large, predictable, core workload it makes sense to bring it in house, and use the elastic (rented) resources for unpredictable stuff (e.g. new efforts). It's not like Amazon doesn't know this too (e.g. they try to make the transition harder by offering lots of proprietary services that help you ramp up faster, but can't be used elsewhere)
- notyourwork 7y agoI don’t think proprietary is offered to make transition harder. In a lot of cases they simply offer a better option.
- gumby 7y agoWell that's definitely what they will tell you! There are plenty of reasons to choose a point in the space denominated by the axes make/adapt-existing X insource/outsource X proprietary/open . None are zero cost unless you really think your platform is good enough that enough others will write for it without you doing anything. It's possible that you would chose to write your own because nothing in the market is even close to good. It's possible that you would open source it in the hopes that it becomes standard and that others will add new features that you will benefit from too (this is not a zero-cost option either). It's possible that you would even keep it proprietary because that's cheaper. But given the way Amazon operates it's pretty clear that they offer their own proprietary services to lower the barriers to adoption ("simply offer a better option") and raise the barriers to switching. I don't see anything wrong with this strategy legally or morally, though I mostly avoid amazon proprietary tools because the risk of locking is one I'm not willing to embrace. There are of course situations where they aren't a problem (e.g. a tool with an anticipated finite lifetime: the cost of lock in in that case is essentially nil).
- davnicwil 7y agoAgreed - past a certain (probably fairly massive) threshold of predictable long term load, it seems clear renting resources is going to be more expensive than the all-in cost of owning and operating your own. Were the opposite true, you'd wonder about the economics of the cloud business model. I think a more interesting way to look at this is, are the other advantages of cloud services (e.g. lots more flexibility and bundled proprietary technologies that you can't economically build yourself) actually worth the extra money? Yes, by not using a cloud service you might save $2B a year, but does that cost you the opportunity to make even more than that, given you're probably moving slower or at least less efficiently than you otherwise could?
- manigandham 7y ago> "Now, it's pared that down to 70,000 servers, of which 8,000 of those are handling the bulk of the load." I wonder what the other 62000 servers are doing.
- eitally 7y agoLots of dev/test, storage, R&D, BI/reporting, and miscellaneous internal business apps most likely.
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- carlsborg 7y agoIndeed. One of the big advantages of the cloud is you provision just the number of servers you need. And scale out to handle temporary spikes in load.
- Havoc 7y agoMinecraft
- vshastry 7y agoYou’re also neglecting TTM as a consideration. As an example, I’m stuck having to wait 6 weeks to get new hardware provisioned into an available slot in one of my data centers to spin up a new Hadoop cluster, something my team could probably do in a couple of hours in the cloud. That being said, we control the HW and SW stacks end to end so I don’t have to worry as much about the nightmare scenarios the NordVPN folks went public about today. Critical given we’re in fintech ...
- tbyehl 7y agoFriend of mine at a payroll processor you've all heard of was excited to migrate to AWS because it took 4-6 weeks for IT to provision a new VM. On their app team's dedicated hardware! So much of the Fortune 500 lust for public cloud seems to come down to working around inefficient IT procurement and provisioning processes. They haven't automated, they don't maintain enough excess capacity, they haven't managed vendor relationships to assure fast order turn-around, financial controls are too onerous, etc. Everything's virtualized but otherwise they're still operating like it's 1995.
- mfer 7y ago> Right now, the bank estimates its private cloud is 25% to 30% cheaper than public providers, though it also recognizes that probably won't last forever. I am glad they shared this situation. We often here marketing telling us that public cloud is always better. It's nice to see different perspectives being shared and some details around them.
- vinay_ys 7y agoIf you have $50million+ you can deploy on capex in one shot (economies of scale negotiation doesn't work well at lower numbers), and you can hire systems engineers (C/C++/Go/Rust 5+ years systems experience x 20 engineers), you can put together a single tenant compute cloud needed to run a typical Internet facing web/mobile application with all the bells and whistles (lots of app server clusters, db clusters, big data clusters, GPU clusters etc with HA, scalability, security, DR etc). At this point, capex/opex cost will be easily 30% lower than the best negotiated bulk price from public cloud. It is worth doing this if your in-house engineering team is at least 100+ app service developers and have high feature churn rate. But be warned, your systems engineering / shared technology team should be level-headed and mature and rest of your app service engineering should be good too to pull this off well. If not, you will be in serious developer productivity pain and there won't be quick and easy fixes once you have put down the capex.
- jariel 7y agoFolks are generally misinterpreting the 'cost' of the cloud by mostly looking at data centre costs, margins etc.. The 'TCO' or 'Total Cost of Ownership' of cloud services is generally much lower than otherwise. The cloud is valuable because of the variety of features, immediately available, at very large scale, run by very credible people with $0 in capital expenditures. In most cases, it's worth far more than the price, which is why it's so popular. In very, very few cases is it 'cheaper' to run one's own cloud given the massive operational overhead of hiring people with very specialised skills, risks all over the board, the enormous planning, extensive investments. Wallmart must have 1000's of trucks but they don't 'roll their own' delivery vehicles, because there's an inherent degree of specialisation in making vehicles. So yes - in some specific cases it makes sense to 'host': say Dropbox, just wants massive cheap storage, or Google, has special needs & scale & ability, or some entity has very specific privacy requirements - and of course I wish there were more variety in providers, especially localised ... but the cloud is essentially now the default hosting option and that's not going away because it makes a lot of sense. The surpluses generated by such services are vast - it's a big step forward for everyone. Companies using AWS are probably profiting more in surplus than the margins in AWS.
- commandlinefan 7y agoI continue to be amazed that any business of more than a few hundred employees would ever consider using off-prem hosting. Cloud services are there to bootstrap a business, not maintain it.
- sjg007 7y agoWell the issue is that you bootstrap on AWS and then have a hard time going on premise without a major rewrite or initiative. That and you want to keep adding features and driving the product forward... it is easy to see how this happens. Plus you can have 200 people focused on things other than running ESX boxes or docker or whatever you need.
- cltsang 7y agoUsing cloud services saves a business from having to have a whole vertical stack of expertise in house. And for banks, these infrastructure engineers have to be available 24*7. For many companies, hiring and talent retention is a problem. There are some risks that are not as superficial as dollar signs on the balance sheet.
- caublestone 7y agoLooks like the anti AWS submarine is being deployed. Arr.
- kerkeslager 7y agoObviously small businesses don't have the option of building their own cloud, but there is a middle ground: use public clouds, but avoid coupling yourself to them. Most cloud providers provide servers that can be treated like a barebones Linux server, and that's all you really need to be productive with most server applications.
- scarface74 7y agoCongratulations, you’re now spending more on barebones servers than a colo and you’re still spending just as much on managing resources - now you have the worse of both worlds.
- qaq 7y agoSmall businesses have an option to not overengineer in the first place.
- bcrosby95 7y agoThen just use a colo center. It's worked for us for close to 20 years. Last time someone had to perform hardware maintenance was at least 3 months ago. If you're small enough (20-30 servers for us) the things mostly run themselves. Any other overhead we have would be present if we were just using something like EC2. The bulk of our hardware is 10 years old. We have some servers that are 17 years old and still chugging along.
- kerkeslager 7y ago> Last time someone had to perform hardware maintenance was at least 3 months ago. If you're small enough (20-30 servers for us) the things mostly run themselves. If those servers are production servers, I'd say that's not small--you're already scaled to the point where you have hired a whole person (or two) to do server work, no? I've worked at places where I'm the only technical person. I know enough to set up a Django server, but the reality is I'm not an IT guy, I'm a developer. Paying for a few cloud servers means we don't have to hire anyone to do server maintenance, which gives me an entire person's salary as a server budget before we have to consider whether hiring a person would be better. A lot of companies never reach the size where that becomes a concern. Of course everybody wants to get big enough that they need a server farm, but as long as you don't vendor-lock yourself, moving from a virtual Linux server on the cloud to a physical server in a colo center is fairly trivial. My personal website has been running on a single $10/mo Digital Ocean server for 5 years. I think it would be very difficult to beat that price with a colo center and physical hardware. Most businesses are obviously larger than that, but I think it's a bit of an overreach to claim that it's always more expensive to run on the cloud. It just isn't, for many real-life situations.
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- trident1000 7y ago"the cloud" = your data is now our data on our computers (I think we all know this). When companies like Microsoft start saving my files to their personal servers as default, I hate you. Stop.
- cltsang 7y agoWhen did that happen? Assuming we are not talking about Azure China.
- kfk 7y agoThe appeal of the cloud is less IT politics which in big company is a serious problem. Business Units can sidestep IT and go “self service” and spare a lot of pain and time in dealing with IT. I don’t think any serious manager going into the cloud is doing it for the savings. But of course this is a bank and technology is their future so it makes sense that they want to keep a tight loop on the cloud activities.
- not_a_cop75 7y agoGet outta my dreams. Get into my cloud.
- LatteLazy 7y agoIt saved 2bn compared to what it spend on its old infrastructure right? Not 2bn compared to the (totally unknown) cost of AWS instead. Full disclosure, I've had baml as a client and dealt with their desktop support, fix and brokerage tech support and their TRP systems. I wouldn't trust them to point out the window at a cloud let alone build and maintain one. So I'm more than a bit dubious of this story...
- sam0x17 7y agoThat's almost as much as they make on overdraft fees!
- mindslight 7y agoThat's unfair - they were only fined $67 million for fraudulent overdraft fees! Though I have to wonder how much they're currently making by inducing every one of their customers to write fraudulent checks. Though there is something comforting about a predictably evil company though. Much more straightforward than "do no evil" while building a surveillance machine that would make a Stasi officer blush, or "this helps our users" while hindering Hong Kong's protests.
- neonate 7y agohttps://web.archive.org/web/20191021160628/https://www.businessinsider.com/bank-of-americas-350-million-internal-cloud-bet-striking-payoff-2019-10 https://web.archive.org/web/20191021160628/https://www.busin...
- qorrect 7y agoHey cool trick thank you.
- beardedman 7y agoFor what it's worth, I really don't like AWS - aside from their S3/Route53/CloudFront products. There is a layer of abstraction that is so minimal that you may as well roll out the services yourself & save a ton of money. Of course, if you like that layer, then that's fine too.
- Aperocky 7y agoIf you look beyond that, AWS offer layers of services that you might not realize existed. Cloud DB with no worry about physical hardware (in addition to S3 buckets which is mostly for files). lambdas when you don't want to manage a server, cloudformation when you don't want to manually start your stack by clicking, API gateway for quick ways to create APIs without worrying about stuff. And powerful orchestration layer that connects all of these together. In fact, a lot of these services are bootstrapped on AWS itself. If you know your way around AWS, you can really find a sweet spot where it's cheap scalable and mostly worry free. The problem is that AWS domain knowledge in itself is _deep_ and not many people know enough about AWS to avoid large amount of pitfall and inefficiencies that a knowledgeable people can quickly spot and fix/alternate.
- pmoriarty 7y agoMany large companies save money by having their own cloud, but those clouds sometimes really suck compared to AWS. I know of one very large company where any request for a change in their cloud infrastructure always required a minimum two week advanced notice. In AWS such a change is just a mouse click away, and could be done in seconds. AWS also has a really amazing integration of a large variety of services which is really hard for in-house clouds to match. I wonder how many AWS services the BoA cloud has, and how their own integration of those services matches that of AWS.
- chaosbutters 7y agoour internal cloud requires months in advance to get changes done :(
- Aperocky 7y agoIt should be named 'server in a remote place' instead of cloud.
- huslage 7y agoThat sounds like a Cloud in name only.
- jjav 7y agoThat's not a comparison of external cloud vs. self hosted though. It is a comparison of different operating models with respect to change control. Either one can exist in both external vs. self-hosted infrastructure. I've been in places where the engineering team plugs in an old PC under a desk somewhere, gives it a public IP address of there's the production server. That's the self-hosted equivalent of the engineering team having full AWS access and any change is a mouse click away. I've also experienced places where any change does take a week or two of approvals even though it is hosted on public cloud. There is a time and place for all approaches. What works best with a three person startup putting up a MVP is quite different from what is best in a very large corporation operating in a regulated environment.
- 7y ago
- shakil 7y agoLooks like $2B of savings are from reducing the number of servers (200,000 servers earlier to 70,000 now). That has nothing to do with the advantages of a private cloud over public, etc. They were just over-deployed and by reducing the number of servers they would have enjoyed similar savings no matter where they were running them. In fact they could have saved even more, and earlier, if they had already been in the public cloud, where you can just spin down the VMs and stop paying for them. In your own data center, a server is already sunk cost that you cannot entirely eliminate just by shutting it down.
- dbcfd 7y agoBut the results have been dramatic. The company once had 200,000 servers and roughly 60 data centers. Now, it's pared that down to 70,000 servers, of which 8,000 are handling the bulk of the load. And they've more than halved their data centers down to 23. They say they save 25%-30% over the cloud, which is to be expected since the cloud has a profit margin. They also say that might not last. I'm going with clickbait title. Nothing to see here other than someone getting a temporary savings which we will see as a write off in 5 years.
- Skunkleton 7y agoIs $15,000 per server normal?
- reilly3000 7y agoI would imagine switches, firewalls, UPS, temp control, fixtures, and facility security are also significant cost factors.
- nasalgoat 7y agoOnce you get into the TB range with memory and disk, and 64+ cores, easily.
- nwallin 7y agoYes. "Server" implies redundant power supplies, 4-?? disks, an excess of high quality capacitors, a heavy steel case, a motherboard probably 4x the area of a typical ATX motherboard, ECC RAM, far more RAM slot capacity, etc. Furthermore, extended service contacts are the norm. Five year same day on site service isn't unusual. Five year 24/7 on call/next day replacement is typical. One year warehouse service is unheard of. That's just the device itself. Servers also imply a rack to put them in, real estate for said racks, 24/7 HVAC for said real estate set to substantially below room temperature, and an expectation to run it (and consume electricity) continuously. You also need network architecture to support them. This isn't even getting into the realm of stupid specced servers. 512GB RAM? Easy. 128 cores? Sure. Disk space, network capacity are cost limited: if your server is limited by network speed or disk capacity you can simply punt a briefcase full of money at your supplier and get more. You want all of that arbitrary capacity disk space to be SSD that's just an accounting problem.
- bloody-crow 7y ago> The bank, which has a $10 billion annual tech budget Am I the only one completely befuddled by this number? What the fuck are they doing with these money and 200k servers? These are facebook numbers. For a bank. What?
- airstrike 7y agoPen-and-paper banking doesn't exist. Everything is done electronically, and BofA is a massive behemoth of a bank. Tech companies also aren't subject to the same level of scrutiny / regulatory requirements as big banks, plus the need to support old processes and software, etc
- fonix 7y agoany software the bank is licensing can run into the 10's of millions per year, for anything they use: loan orignation, underwriting, etc. they have a lot of users also so just think about their basic workspace cost per user for all the software necessary.
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- walshemj 7y agoMight well have small systems at branch level that they are counting as servers. Apparently BOA has 4344 branches so the local infrastructure costs will add up both for branch kit and the networking costs.
- gpm 7y agoI'm not sure why you find this surprising, a bank has a much more complicated problem space than Facebook. - They have a reasonably similar number of users (a fraction, but a large one). - Mistakes cost a lot, so they have to be a lot more careful. It's a lot easier to make money hacking a bank than hacking facebook. - They have to comply with all sorts of regulations. - They probably don't trust their own employees to not be trying to commit fraud. - They have to parse data on a scale that is likely similar or greater than facebook's. To detect fraud/lost credit cards/.... To decide who to give loans to. To price insurance. To decide how to trade stocks. ... - They have to run a physical fleet of devices in the field, outside of their control, that have to give people the right amount of money ~100% of the time. At a glance I see that Facebook has something like 300 petabytes of data [0]. I've worked at a bank, my team had something more like 10, but I don't think much of it was things like video that are just naturally huge. BOA is also approximately an order of magnitude bigger than the bank I was at. One rumor I heard while there was that there had been a bug in one of our mobile apps that had been costing us a million dollars a day in server time. [0] https://www.brandwatch.com/blog/facebook-statistics/ https://www.brandwatch.com/blog/facebook-statistics/
- swedish_mafia 7y agoCan anyone who has worked on Bank of America comment on if any of the things they build actually worked?
- theincredulousk 7y agoThis must be a jab, but obviously yes. Last year they had $28 billion in net income. With that kind of money you can hire the best in the world to build literally whatever you want. They could go build a space shuttle if they felt like it - probably without much trouble. In the unlikely situation that it didn't work, they'd pay someone else to fix it or re-do it. The least likely (albeit not unprecedented) end situation is that 'none of the things actually work'.
- brokensegue 7y agoBoeing can't even make an airplane without trouble and you think BoA could churn out a space shuttle? The space shuttle program was estimated to have cost $200B.
- swedish_mafia 7y agoYou give them €200B to change a lightbulb and it still won’t work.
- theincredulousk 7y agoBoeing has made literally tens of thousands of airplanes "without trouble". One debacle doesn't mean they "can't even make an airplane". "Space Shuttle" was rhetorical, but yeah, they could churn out a space shuttle. They could buy SpaceX and use their engineers to do it. BofA has $2.3 TRILLION in assets. The point is you can buy expertise. It's not like a bunch of bank tellers coded up a cloud platform. Nor would you have a regional branch manager running an aerospace program. You'd hire people that know how to do those things the same as any other expert at any other company.
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- blunderkid 7y agoPublic cloud is definitely a great value for startups. When you are small and want the flexibility and speed and the sophistication that cloud providers make possible. The premium they charge is well worth up to a certain point at least. When you are an established business with mature tech and of the size of BoA, it is a whole different math. Your investment in your own cloud if done right can be a huge saving that can give more mileage (on Wall Street) than your competitors speed in execution, esp if you are a bank, where time to market isn’t exactly a winner.
- grantseltzer 7y agoI'm not so convinced how great of a job they did.Bank of America has by far the worst user experience I've ever seen. I had an experience recently where I changed my password, and after 2 days my new password stopped working and my old one did.
- mcv 7y agoThat's not good, but it's also only one of the many, many things a bank does, though. The most important one is keeping the money safe of course. It's entirely possible for a bank to do some things right and other things wrong.
- crawdog 7y ago"Building its own cloud" = leasing data centers from Equinix or other large data center providers. Financial services have challenges using public cloud due to regulatory and compliance requirements. Most of these challenges are self made - artifacts of moving their teams from "This is how we currently do it" to a shared services model. Curious if they are all in on providers like Redhat Openshift or Pivotal Cloud Foundry as their PaaS layer.
- coredog64 7y agoGiven how little money Pivotal was making from Cloud Foundry and how expensive each license was, I’d bet a large sum that the answer is no. (Some context: My last employer had an AWS bill of about $3m/year that was mostly EC2. Running PCF on top of that would have been another $2m/year in licensing. And that was after the volume discount.)
- formercoder 7y agoThis is simply a fixed cost vs variable cost decision. Fixed costs give you operating leverage which amplified your earnings in good times and bad. Variable costs don’t have the downside, but impact your margins.
- petarb 7y ago“Right now, the bank estimates its private cloud is 25 to 30% cheaper than public providers, though it also recognizes that probably won't last forever.”
- hinkley 7y agoAfter a meetup this spring, someone talked my ear off about how Dell is highly motivated to have a private cloud solution that works for people. Having Dell and Amazon in a bidding war over your next project is probably the best world you can be in. For my money, you should run one data center in the same location with most of your tech talent, and a second one geographically distant, and regionally load balanced. But we typically don’t write our software for this, and you can’t get the business to do a rewrite until they see how stupid expensive a lift and shift ends up being. I think these narratives about saving money are typically covering up a story of how much was squandered starting five quarter ago...
- coredog64 7y agoUnfortunately, Dell’s private cloud solution exists today, and it’s an 18 layer shit sandwich of all the disparate companies that Michael Dell has stitched together into his holding empire.
- deleted 7y ago[deleted]
- Account123481-x 7y agowhy do I not believe this?
- lsllc 7y agoSerious question: Why is it that everyone believes that going to the cloud is cheaper? How is it that AWS can buy the same servers, same switches same everything, make a fat profit and somehow it's sell it cheaper than you can do it? I get that there are economies of scale, but not 2-3x right? Sure, you don't need those admins to rack up new servers, but don't you just trade those costs for costs around AWS "devops"? (IAM / authentication anyone?). I keep hearing execs telling me that moving from self-hosted to AWS is going to save a ton of money ... but I just don't believe it. I would assume if you're that bad at running an IT business in-house, you'll be just as bad at it in the cloud.
- vijucat 7y agoI have a bullet proof plan to earn a $10m bonus in my two years as CTO at <Large Firm>: 1. Identify retarded firm that uses AWS or Azure like money grows on trees AND without too much AWS lock-in 2. Join as CTO and move infra to OVH (2.1 Convince OVH to not irritate international customers by making my browser show "Translate this page?" for EVERY SINGLE page, even on us.ovhcloud.com, because they HAVE to show their French lineage at all times instead of just having English pages in English! They've already improved their Customer Service a lot, so I have great hopes) 3. Reduce server costs by 4X 4. Profit! Seriously. Unless you really need auto-scaling or one of the other unique features of AWS / Azure products, you don't need to pretend you're the next Facebook or Netflix. Also seriously: de-cloudification is a great business idea.
- hnthrowawaybofa 7y agoI used to work for BofA as a quant in their Charlotte HQ. Their cloud decision is the least surprising. You really have to see it from their pov. My boss used to say - "Charlotte is a 2-horse town. You either work for Bank of America, or you walk across the street to Wells Fargo"! Compared to these 2, the other companies are much smaller along most axes (market cap,employee count, or just sheer heft). There's an uptown walkway( like a private overhead glass tunnel) that safely escort bank workers from downtown to bank without coming into contact with riffraff :) Its just a whole new level of planned design. Imagine if all the FAANGs had an interconnected private glass tunnel walkway that looked down upon the unfortunate denizens of MV/PA/SF,while the chosen ones swiftly segwayed from FAANG to FAANG whilst checking in their latest git commit into kubernetes or whatever it is you guys do :) That's what it was like. Quite unreal. But all this clout leads to a rather head in sand mindset on most strategic items, like technology choice, programming language choice, cloud choice (or non-choice in this case), version control choice etc. Everything was done in-house, in the most boring safest way possible tech ( mostly Java about 3 versions behind, some strange python lib where any function call was automatically logged!, and Excel & Matlab all over the quant land. I mostly sftp-ed financial data from some Quartz cloud...felt very quaint to do these sort of things in 201X. All laptops were locked down windows dell boxes on which you couldn't install anything, & ran some strange norton antivirus which hogged all the memory. My interview itself was so old fashioned. I thought since it was a Quant job, I'd get questions on math & finance. They trotted out their "chief developer" who wanted to know how to model a chair with 4 legs using Java OO. You know the 1990s Grady Booch garbage full of UML, with parent Table class & child Table & Leg Class & friend function & all that jazz. I was like Jesus this regressive inheritance based OO shit is still alive! Its a deeply old fashioned slow moving place. Very large IT budget with pretty much half of Charlotte working in some capacity for the bank. So yeah, if you had all the personnel & all the money, why wouldn't you build your own cloud. You are paying for all these people anyway, might as well give them something to do. Of all the employers I've worked for in my lifetime, this was the one place where I was personally asked NOT to work so hard, because I stayed at my desk after 5:30 pm. (Sorry I have a regular 4 digit HN account but the bank doesn't like it if you talk about them. One of their lawyers once tracked me down because I mentioned some harmless datapoint about a technical problem I had worked on.)
- 7y ago
- julienfr112 7y agoI work for banks, and I can tell you that when you are doing devops with their "own cloud", you are miles away from a real cloud experience : no os choice, no hardware choice, slow provisioning, no access to repo, low and inconstant virtual disk (EBS) speed... I guess that you get what your paied for, and maybe the 2B saved on cloud are spend on IT service that suffer from such a poor own cloud experience. If they have 50 000 IT employees payed 100k, that's 5b a year. Including professional services and you are maybe at 10b. Just increase the productivity of this 10b by 20% and the money "saved" is not such a good deal...
- 0000011111 7y agoExactly.
- codingslave 7y agoProbably more than half of the engineers writing the code for their cloud are either based out of india, making 40k a year, or in the USA, making 50% of the market rate.
- sundbry 7y ago50,000 engineers just to run a bank? I don't think so.
- SomeOtherThrow 7y agoBank of America should really not brag about the quality of the software it makes based on its consumer website. Maybe they should consider spending more.
- cbsmith 7y agoThat implies their business would have data center costs beyond most tech companies (Lyft for example is spending $300 million with AWS over three years, Snap is spending $3 billion over five years). Something doesn't add up here.
- cortesoft 7y agoTech companies don't necessarily spend more on computing resources than non-tech companies. The article says they had 200,000 servers in 60 datacenters. That is certainly more than most tech companies, and is not surprising. A large bank probably has more computing needs than someone like Lyft.
- cbsmith 7y ago200,000 servers isn't actually that many. 200,000 c5.xlarge's at on demand rates (which nobody with 200,000 servers pays) will cost you about $300 million a year. So they are realizing savings at about an order of magnitude higher than you'd expect cost wise. I used to work in banking... their compute needs are actually quite basic. I think what we're really seeing here is some creative accounting around how operations and costs are accounted for. They've got to be talking about costs of managing and operating their cloud as well, and most of those costs would be in terms of training & workforce retooling.
- gamesbrainiac 7y agoSomething does not make sense here. The main cost savings seem to come from using fewer servers. Why could you simply not do this on Azure or GCP or AWS? Are the advantages coming from leveraging bare metal servers? I'm a little confused.
- robocat 7y agoIf the 2 billion were saved over two years, that is an increase in profit of ~4% over those 8 quarters ((75-56)÷56÷8)§. That's a pretty good outcome. § = Q3: "The bank said Wednesday that net income excluding an impairment charge rose 4% to $7.5 billion, or an adjusted 75 cents a share. When including the $2.1 billion charge tied to the end of a partnership with First Data, net income fell to 56 cents a share"
- gowld 7y agoCounteractual: Suppose BofA wasted $2B per year by building its own cloud. Or is BofA decided to migrate from woncloud to AWS, and wasted $2B in the process? Would a CEO make a public statement about that? Or would they fiddle the numbers (which are impossible for an outsider to verify) to make their decision look like a winner?
- KaiserPro 7y agoI used to work at a very large financial publishing company. I joined just at the point where they were moving from VMware to AWS. It was never a cost saving exercise. It was a way to completely change the culture of the IT department. As they were one of the very first news websites, they had at the time ~18 years of cruft to deal with. The drive to the cloud was about flexibility, and if we are honest, shaking the staffing tree to get rid of the ossified staff. They went from three data centres (mixture of SUN and Intel blades all backed by FC) to pure AWS/heroku. The running costs went up significantly, the opex was close to £3mil in AWS bills alone, all to put text on a web page. It will continue to rise because it offers flexibility, and as each product now has its own account, standards are difficult to enforce. This means lots of snowflake installs of X that are now critical to Y. The cloud is more expensive for large companies, for most workloads. For SMEs its the total opposite.
- mumblemumble 7y agoI used to work at a very large and entrenched publishing-cum-tech company, too. Sounds like they were different companies, but very much the same rationale for migrating to a well-known cloud service provider. The ossified and entrenched IT department was becoming one of the biggest challenges to quickly reacting to market challenges and opportunities, and was long overdue for a few boots planted firmly to the rear end. The cloud was probably always more expensive if you only considered the cost of computers. But it was about so much more than that. Mostly, it was about creating a hostile environment for the BOFHs who were creating a hostile environment for everyone else.
- bonesss 7y agoAnother way of framing that: BOFHs went from being necessary to the business to preventing the business from acheiving its goals, and got replaced by competition that was more amenable at a higher price. They weren't seen as so unprofitable they had to be eliminated, but unprofitable enough that competition could triangulate their price vs pain.
- cpeterso 7y ago> mixture of SUN and Intel blades all backed by FC What is FC?
- gowld 7y agoITT: people who didn't read the article and believed the false headline that Business Insider made up. The 3rd sentence of the article, in bold, explains that the savings were from consolidating on-prem hardware, not from eschewing external cloud. The article cites BofA itself at sayignthat savigns vs external cloud is tenuous at best: > Right now, the bank estimates its private cloud is 25 to 30% cheaper than public providers, though it also recognizes that probably won't last forever. Still, the company believes the architecture it has built will give it leverage in negotiating contracts with these companies
- cm2187 7y agoAll the flexibility that the cloud offers is wasted on a large bank. I remember one of the selling points of cloud computing for developpers is that it takes months to provision a physical server in a large organisation. With [enter cloud name here] a developper can create a VM in only a few minutes! Well, enters a typical bank bureaucracy, cost controls, approvals, etc. And now we are back to taking months to provision a VM!
- narcindin 7y agoJPM's Jamie Dimon talks about his cloud strategy on the most recent shareholders letter, page 34. (https://www.jpmorganchase.com/corporate/investor-relations/document/ceo-letter-to-shareholders-2018.pdf https://www.jpmorganchase.com/corporate/investor-relations/d...) Note that he leaves open the option for both public and private cloud.
- AlexCoventry 7y agoDo banks using third-party cloud services just trust that the provider won't abuse their data? Do they actually store financial data there, or just use them for front-end stuff like websites?
- cortesoft 7y agoMost of the cloud providers are PCI compliant: https://aws.amazon.com/compliance/pci-dss-level-1-faqs/ https://aws.amazon.com/compliance/pci-dss-level-1-faqs/
- lmkg 7y agoThe trust will come from very stringent contracts (beyond the regular contracts that other customers would use), third-party certifications that the provider achieves, and the provider being covered by certain aspects of the regulations that cover banks (or healthcare or whatever).
- bpchaps 7y agoI used to work at Bank of America as a level 2 app analyst back when they first started building Quartz. At the time, it was advertised internally as a system to be used for reporting, and so it had lots of built-in functionality to connect to databases, etc. Pretty neat. That said. The method of encoding production database credentials was rot-13. No joke. In the Quartz interface, you could double click on a starred-out set of credentials, and it would run rot-13 on it and display the password. This was for FX, rates, credit card, mortgage, etc etc etc. Having access to this cloud system gave effective access into all of Bank of America and Merrill Lynch. They probably save a lot of their money by using very, very bad practices. Still only the second worst security fail I've seen.
- pouta 7y agoCould you share the winner?
- betherebel 7y agoProbably Goldman Sachs! Tech of big banks sucks.
- Scramblejams 7y agoI'll bite. And the first?
- qorrect 7y agoDon't leave us hanging, whats #1?
- graycat 7y agoI have a question: I'm doing an ambitious Web site startup; current status, rushing to alpha test; and from this thread and more I wonder about servers and our server farm and in-house network, that is, for the options here, in-house, co-location, AWS, Azure, etc. I'm using Microsoft's software, Windows, .NET, SQL Server, etc. Q. For many of the reasons given in this thread, etc., I'm leaning to having our own in-house servers, server farm, etc. For that, is there a source of information I will be able to use, say, as consulting, depending on the issue, an hour, day, week, month at a time, to get us past the chuckholes in the road on the usual work -- system and network planning, installation, configuration, monitoring, diagnosis, correction, etc.? E.g., can I just call Microsoft for such issues, CloudFlare, VMWare, Cisco, etc.? Assume that money to pay for the products and consulting will not be a problem. If the broad answer is "Yes", then that will take a lot of entries off my TODO list and let me sleep better. Thanks.
- fukpaywalls 7y agoavoid business insider! they throw up a pay wall even after they prompt you to turn off ads for viewing!
- fukpaywalls 7y agoavoid businessinsider.com! they throw up paywall after prompting you to turn off adblocker!
- pg_is_a_butt 7y agoIf you are spending $2B per year on cloud infrastructure, you should own the entire internet.
- m0zg 7y ago200K servers to serve ~50M households? Seems rather inefficient. What were they doing with all this hardware?
- gok 7y agoThat BofA had >$2B/year of IT spending is the real story here.
- jtlienwis 7y agoTo quote Steve Oberlin of Nvidia ( quoting House M.D.) about cloud customers... "Everybody lies."
- spicyramen 7y agoFor BoA we need to consider that is a Bank and many of the information they store may be too sensitive to pass it to a third party which as we know always have security issues. Better to deal with those internally. Many factors to consider in this case: real estate, expertise in-house to build data centers, budgeting, technology required. In our case without Cloud would have been very difficult to bootstrap our business and manage it, as most of the budget was to hire engineers to work in our product and pay bill.
- xrd 7y agoMy experience working at an aging e-commerce company that has their own cloud: totally shitty. They used off the shelf management software that they misconfigured. Getting VMs was so painful and they never worked correctly. When I came back from paternity leave, they had gotten no response from their automated system and deleted all my VMs even though they could have seen heavy usage. If they had manually followed up they would have gotten an out of office email but they didn't. Those are just two of the examples of how terrible it was to use their internal cloud. You are always going to be five years behind if you do it internally. That might be a good cost calculation and I wasn't in a position to argue. But, it meant innovation was terrible there.
- safog 7y agoSo one thing people seem to be ignoring is that cloud != automated provisioning of VMs by engineers. There’s so much more AWS, GCP and Azure offer these days that trading away all the stuff like metrics, monitoring, dynamo-dB, s3, lambda, scalable RDS, Spark pipelines and generally a whole suite of products that go into building a modern web app for some scripts that can provision on demand seems to be a poor choice.
- ivanjaros 7y agocloud will always be more expensive than bare metal. period. cloud is great to start out when you have no clue about how much power you will need to satisfy your customers and to be flexible enough to cover some unexpected spikes. but once you're out there earning, the only reason to stay on cloud is comfort. business-wise it is a black hole for money. many will argue that cost of personnel to manage your own infra does not favour it over cloud. but if you do the math you will see that savings when renting only three bare metal servers each month will pay a full-time salary for a sysadmin. you don't even need to own your own hardware. the bare metal rentals these days are insanely low and if you truly want to save each penny, you buy your own because in a matter of months you get yor investment back on saved fees alone. the thing is that these big tech companies convinced so many people these days that cloud is the only way that they cannot even fathom how anybody can run on their own hardware. the new sysadmins are already "brainwashed" and inexperienced this way and the old school guys that have experienced managing their own hardware are slowly "dying" out. soon, just a mention of managing your own hardware will become a joke to these newcommers when in reality the cloud was never-ever a cheaper option to go with in the first place. not to mention that these days we have so much technology to make things easy(kubernetes, rancher, proxmox, docker, lxc..) that it is quite laugable to fear bare metal and religiously praise the cloud like some kind of savior.
- vinay_ys 7y ago70000 servers in 23 datacenters – sounds awful. Why have it spread out so much? 350 million capex for 70k high end server DC setup may make sense. $2B = 40% savings means their opex was $5B and now it's $3B. That is high expense. Guessing most of it is licensed software costs? Like Oracle on every single core?!?