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The expensive part is the capacity per dollar. It's not cloud vs on prem. The real value play is colocation. Imagine operational costs at $100/mo for a terabyte

The expensive part is the capacity per dollar. It's not cloud vs on prem. The real value play is colocation. Imagine operational costs at $100/mo for a terabyte of RAM and 32 cores on unmetered bandwidth compared to the equivalent at aws. Most sv startups don't care about operational costs but they do care about capital costs of buying the hardware. Primarily due to the very short term focus. I think their own resumes are important too vs their employers' long term viability so everyone pushes aws or azure etc because it's hot tech. Thinking long term is not a silicon valley thing. It's a totally different mindset.

kbenson 7y ago
At the very lowest end, colocation is a clear winner in value, even up to a few servers, it stands up well. Once you have multiple servers, and need to start load-balancing some sets of servers to deal with load spikes, cloud-based infrastructure starts to have some benefits that make it competitive and possible cheaper in some instances, because of load scaling and ease of turn-up of new systems. If you're increasing load by 20% or more a month, you likely will have major problems provisioning servers fast enough unless you gamble that trend will increase for a year or more and make a much larger investment than your normal monthly spend to account for it up front. Once you get really large though you can actually just colocate a bunch of systems and storage and throw a hypervisor manager on them and get almost all the benefits of a cloud based system for an up-front cost that's probably not much more than a dew months of your cloud costs (it looks like 3-4 months is the break-even on some large AWS instances I just looked at compared to some 64-core/512GB boxes I specced out recently). You won't be able to scale quite as immediately to large load increases unless you under-provision, but at that point you're large enough that you should have a handle on what your load spikes are like, and maybe even be able to supplement with could offerings in a pinch. In a way, cloud-based offerings allow medium-to-large businesses to have a sort of insurance on scaling, in that they are paying more for it, but they can stop at the right amount for their need or even back-off because of problems (or engineering coming up with a better way to handle some load).

kbenson 7y ago

At the very lowest end, colocation is a clear winner in value, even up to a few servers, it stands up well. Once you have multiple servers, and need to start load-balancing some sets of servers to deal with load spikes, cloud-based infrastructure starts to have some benefits that make it competitive and possible cheaper in some instances, because of load scaling and ease of turn-up of new systems. If you're increasing load by 20% or more a month, you likely will have major problems provisioning servers fast enough unless you gamble that trend will increase for a year or more and make a much larger investment than your normal monthly spend to account for it up front. Once you get really large though you can actually just colocate a bunch of systems and storage and throw a hypervisor manager on them and get almost all the benefits of a cloud based system for an up-front cost that's probably not much more than a dew months of your cloud costs (it looks like 3-4 months is the break-even on some large AWS instances I just looked at compared to some 64-core/512GB boxes I specced out recently). You won't be able to scale quite as immediately to large load increases unless you under-provision, but at that point you're large enough that you should have a handle on what your load spikes are like, and maybe even be able to supplement with could offerings in a pinch. In a way, cloud-based offerings allow medium-to-large businesses to have a sort of insurance on scaling, in that they are paying more for it, but they can stop at the right amount for their need or even back-off because of problems (or engineering coming up with a better way to handle some load).