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> Auto manufacturers use machines built by other businesses and parts built by other businesses. Yeah but they generally aren't renting those machines. Renting

> Auto manufacturers use machines built by other businesses and parts built by other businesses. Yeah but they generally aren't renting those machines. Renting critical pieces of business infrastructure that aren't easily replaceable is opening yourself up to rent seeking on the part of your supplier. Remember the Oracle business model--lock people in and then keep raising the price just below what it would cost to rebuild from scratch.

weberc2 7y ago
Why is it better to be locked into your own company’s IT department rather than AWS? I would argue AWS gives a better ROI than 95% of corporate IT departments, and generally less hostile to boot.
- greglindahl 7y ago
  One hopes you're not arguing that companies shouldn't bother trying to figure out if they're in the 95% or the 5%.
  - weberc2 7y ago
    No, it wouldn’t make sense for me to make the 95/5 distinction only to prescribe a 100/0 response. My post was a call for sober judgment, which is admittedly not very popular here.
    - greglindahl 7y ago
      Making up opinions and then arguing against them is not popular here.
      - weberc2 7y ago
        No straw men here Greg. Looks like you’ve confused this thread with another.
- StreamBright 7y ago
  Many people did not realize that IT infrastructure is a utility, it should not be owned all the time by most of the companies but purchased when needed. AWS couldn’t exist if it wasn’t better than on-prem IT. How better is defined is different case by case. Usually it includes TCO, ROI, turn around time, efficiency in terms of capacity management and fee more. These are the things many small companies do not have to deal with or easily solved. Yet there are many companies choosing AWS to solve these problems for them. In my experience AWS really start to make sense if you are spending more than 100.000 / month on infrastructure.
txcwpalpha 7y ago
I don't think the renting example is that true. AFAIK auto manufacturers certainly do "rent" many of the factory machinery they use, and they certainly "rent" the maintenance contracts from the companies who service them (the big exception I'm aware of being Toyota, which makes their own factory robotics). In other examples, many airlines do lease airplanes, and even among the airlines that do own the planes, they still usually lease the engines. As the GP said, there's a balance to be struck. Delta doesn't have the expertise or the economies of scale necessary to build their own engines from scratch, but they do have the ability to lease those engines and then have their own teams maintain them. Similarly, most companies don't have the know-how or the EoS to run their own data center, so instead they buy cloud services and then have a smaller team to maintain it. It's a win-win. Some companies like BofA might be big enough where they can run their own cloud and it be cheaper than using a cloud provider, but that's definitely not a common thing.
- eesmith 7y ago
  Could you clarify "AFAIK auto manufacturers certainly do "rent" many of the factory machinery they use, and they certainly "rent" the maintenance contracts from the companies who service them (the big exception I'm aware of being Toyota, which makes their own factory robotics)."? Rental only makes sense if there is a marketplace for used machines. Eg, planes and plane engines are components that aren't really tied to one place or company. (The "that aren't easily replaceable" from the parent post.) But industrial robots for car manufacturing seems like rather specific hardware. If, say, the Ford plant in Claycomo, Missouri no longer needs a machine for making the F-150, who is going to rent it? How is rental a better cost-savings for Ford than buying the machine and later selling it? I tried looking this up, but failed. The closest I found was that "over half of industrial robot purchases in North America have been made by automakers" at https://www.robotics.org/blog-article.cfm/The-History-of-Robotics-in-the-Automotive-Industry/24 https://www.robotics.org/blog-article.cfm/The-History-of-Rob... . Also, '"rent" the maintenance contracts' doesn't make sense to me. I sell maintenance contracts to my customers, I don't rent them, and I don't understand what "rent" could even mean in that context.
  - dodobirdlord 7y ago

weberc2 7y ago

Why is it better to be locked into your own company’s IT department rather than AWS? I would argue AWS gives a better ROI than 95% of corporate IT departments, and generally less hostile to boot.

greglindahl 7y ago
One hopes you're not arguing that companies shouldn't bother trying to figure out if they're in the 95% or the 5%.
- weberc2 7y ago
  No, it wouldn’t make sense for me to make the 95/5 distinction only to prescribe a 100/0 response. My post was a call for sober judgment, which is admittedly not very popular here.
  - greglindahl 7y ago
    Making up opinions and then arguing against them is not popular here.
    - weberc2 7y ago
      No straw men here Greg. Looks like you’ve confused this thread with another.
StreamBright 7y ago
Many people did not realize that IT infrastructure is a utility, it should not be owned all the time by most of the companies but purchased when needed. AWS couldn’t exist if it wasn’t better than on-prem IT. How better is defined is different case by case. Usually it includes TCO, ROI, turn around time, efficiency in terms of capacity management and fee more. These are the things many small companies do not have to deal with or easily solved. Yet there are many companies choosing AWS to solve these problems for them. In my experience AWS really start to make sense if you are spending more than 100.000 / month on infrastructure.

txcwpalpha 7y ago

I don't think the renting example is that true. AFAIK auto manufacturers certainly do "rent" many of the factory machinery they use, and they certainly "rent" the maintenance contracts from the companies who service them (the big exception I'm aware of being Toyota, which makes their own factory robotics). In other examples, many airlines do lease airplanes, and even among the airlines that do own the planes, they still usually lease the engines. As the GP said, there's a balance to be struck. Delta doesn't have the expertise or the economies of scale necessary to build their own engines from scratch, but they do have the ability to lease those engines and then have their own teams maintain them. Similarly, most companies don't have the know-how or the EoS to run their own data center, so instead they buy cloud services and then have a smaller team to maintain it. It's a win-win. Some companies like BofA might be big enough where they can run their own cloud and it be cheaper than using a cloud provider, but that's definitely not a common thing.

eesmith 7y ago
Could you clarify "AFAIK auto manufacturers certainly do "rent" many of the factory machinery they use, and they certainly "rent" the maintenance contracts from the companies who service them (the big exception I'm aware of being Toyota, which makes their own factory robotics)."? Rental only makes sense if there is a marketplace for used machines. Eg, planes and plane engines are components that aren't really tied to one place or company. (The "that aren't easily replaceable" from the parent post.) But industrial robots for car manufacturing seems like rather specific hardware. If, say, the Ford plant in Claycomo, Missouri no longer needs a machine for making the F-150, who is going to rent it? How is rental a better cost-savings for Ford than buying the machine and later selling it? I tried looking this up, but failed. The closest I found was that "over half of industrial robot purchases in North America have been made by automakers" at https://www.robotics.org/blog-article.cfm/The-History-of-Robotics-in-the-Automotive-Industry/24 https://www.robotics.org/blog-article.cfm/The-History-of-Rob... . Also, '"rent" the maintenance contracts' doesn't make sense to me. I sell maintenance contracts to my customers, I don't rent them, and I don't understand what "rent" could even mean in that context.
- dodobirdlord 7y ago