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I thought Corey Quinn's take was very smart: https://news.ycombinator.com/item?id=23013960 https://news.ycombinator.com/item?id=23013960. According to him, the

I thought Corey Quinn's take was very smart: https://news.ycombinator.com/item?id=23013960 https://news.ycombinator.com/item?id=23013960. According to him, the cost of bandwidth is probably the issue, and would make Oracle a compelling choice even if Zoom didn't have negotiating leverage. Nota bene: it gives me no joy to say good things about Oracle. I hope it will not happen again.

eloff 6y ago
Yeah, the other clouds charge way too much for bandwidth. For zoom this is probably their dominant cost. Also transfer between zones is expensive: $0.02/GB at AWS. And you typically need that if you're going to make any highly available system.
tthrowaway365 6y ago
Zoom wouldn’t pay list. Realize cloud providers can provide offline pricing to Zoom that would match or beat the oracle network pricing for a “like” offering. Things like fixed cost throughput links, and fixed network pricing is available with contracting for large companies. It’s likely oracle simply “bought the business” and is loosing money on the hosting. Hoping to make it up with a co-sell commission based contract, or by leveraging this as PR/marketing. Cory Quinn is right. List price is expensive. But if you spend 1mil/year or more you shouldn’t be paying list. If you are zoom getting 90% off egress is totally negotiable.
- hyperpape 6y ago
  Of course, Zoom won't pay list. But they also won't pay list on Oracle either. I wouldn't trust the "10x" comparison, but the bottom line that it's more expensive seems reasonable. Corey Quinn seems like a smart guy with a lot of connections. If he doesn't regularly have big fish in the AWS ecosystem telling him (off the record!) "here's the deals we got", he's not doing his job right. If someone similarly knowledge comes back and say "actually, Oracle doesn't beat AWS on bandwidth when you're a big fish", I'll say not to trust this article.
  - jedberg 6y ago
    I’ve never done a negotiation with Oracle, but I’ve seen the AWS bills of a couple of their biggest customers. AWS technically doesn’t do discounts. They just invent new usage tiers with phenomenal pricing. Which effectively means bulk discounts. I’m sure Zoom is getting a great deal on outbound bandwidth. Especially since they are multi-cloud and can shift traffic between providers at a whim to squeeze their providers. Ironically they would probably qualify for much bigger discounts if all of their workloads were in a single cloud.
    - hyperpape 6y ago
      Thanks, this is interesting. But it's not 100% clear to me: are you saying it's likely their AWS bill is low enough to invalidate this analysis? Also, if they're as cloud agnostic as it sounds, wouldn't they have evaluated the cost-savings of single cloud while negotiating?
      - jedberg 6y ago
        I have no idea since I've never tried to negotiate with Oracle Cloud. I don't know how hard they negotiate (but it's Oracle so probably pretty hard). I'd say the analysis is accurate in directionality but maybe not magnitude. But more importantly I think it's just Corey's way of poking Amazon about their high prices. :) But I will say that Amazon is pretty clear that you'll get a better discount if your workload is 100% with them. Like if you put 1/3 of your workload in AWS, it will be more than 1/3 the price of putting your whole workload there. Or to put another way, if you triple your workload you won't triple your price.
        user5994461 6y ago
        >>> I don't know how hard they negotiate (but it's Oracle so probably pretty hard). Can't be too hard. It's Oracle so they let you in nicely enough, then they screw you later when you're locked in, increasing cost substantially on every renewal, changing terms and billing arbitrary things. I think Zoom could get away with any terms really (AWS is not hard to beat on bandwidth to begin with). Oracle cloud is desperate for customers, even more than Azure and GCP, but Oracle has the willingness to increase costs tenfold and change terms arbitrarily later unlike competitors, so all things considered don't expect them to have too much regards for the (initial) terms. On the database they are notorious for trying to charge test databases (normally don't need a full license), any server they can find (up to you to evidence it's not running oracle) or even your entire virtualized datacenter because VMs can migrate so the entire datacenter should be the machine when it comes to billing and they bill by core.
nakodari 6y ago
I agree with Corey Quinn. This should be a wake-up call for the dominant players in this field. The high outbound bandwidth cost of AWS, Azure, and Google Cloud makes no sense in 2020. I hope this causes AWS and others to reduce their outbound bandwidth and inbound accelerated transfer cost to at least half or more after watching Zoom migrate to Oracle.
- closeparen 6y ago
  The cloud providers are optimized for the corporate datacenter use case: internal applications that talk to each other and employees. That stuff is harder to do with traditional web hosts, which are built around each server being exposed to the internet and until recently had no answer to VPC. The kinds of websites that could easily be hosted on the likes of Linode and DigitalOcean still ought to be.
  - rhizome 6y ago
    >traditional web hosts, which are built around each server being exposed to the internet and until recently had no answer to VPC This is absolutely wrong unless you have rank n00bz leading your technology. This isn't even touching the implication that anything is harder to do outside of cloud hosting providers, it's just accounting for, well, the entire industry prior to, oh, let's say 10 years ago. It's not as prehistoric as it sounds, and in many (if not most) cases, the cloud providers are just slapping new trademarkable names on those classic architecture choices.
    - closeparen 6y ago
      Web hosts. There were of course other infrastructure providers that would support more complex architectures, but mostly of the “call us” variety.
      - rhizome 6y ago
        That is a distinction without a difference for me here, but the people have spoken regardless.
deleted 6y ago
[deleted]
jandrese 6y ago
So the upshot is that they're barely using the database product and went with Oracle because they're much more competitive on bandwidth? I guess that makes sense. I wonder how stable that will be long term. Oracle probably has cheap bandwidth so you'll put down your first child on the database transaction costs, but if you're only using them for the bandwidth they'll probably won't be happy to let so much potential profit sit on the table.
- enitihas 6y ago
  In this case, they will be far more happy with the popularity associated with Zoom using them, much more than whatever money zoom will pay them. This gives their marketing/sales folks far more material than the money from Zoom can buy them.
  - ineedasername 6y ago
    I wouldn't count on Oracle as a whole, and especially individual Oracle sales managers that would benefit from turning the screws--- I wouldn't count on any of them to think all that long-term about things.
SteveNuts 6y ago
We're an outbound bandwidth heavy shop also and have been shopping Oracle cloud for the same reason. We've been told over and over that we don't spend enough with AWS to start seeing any discounts so to hell with it.
- user5994461 6y ago
  Have you considered IBM SoftLayer? That would be the more serious contender in my opinion if one doesn't want AWS/GCP.
  - 1cvmask 6y ago
    Do you use Softlayer? If so how has your experience been to date?
ApolloFortyNine 6y ago
All bandwidth isn't created equal, but I'd assume Oracle bandwidth won't be bottom tier. It is still something to think about though when shopping providers, I assume any major cloud provider will have great peering, but a gigabit line from a random dedicated server provider will be noticeably slower for many customers.
deanCommie 6y ago
Genuine question coming from a lack of understanding of building a many-to-many video chatting app. Wouldn't you want to send the data peer-to-peer between the users rather than funneling everything through the Zoom server? You'd get better latency, and you wouldn't have to pay for the network streaming costs...
- user5994461 6y ago
  Peer to peer has been dead for more than a decade. Computers are all behind firewall/NAT, they can't connect to one another. Mobiles are behind whatever is the mobile network nowadays, it's outbound only, nothing can connect in.
  - boredgamer2 6y ago
    > Peer to peer has been dead for more than a decade. Source? Some apps like bittorrent have increased in the past decade, have they not?
    - user5994461 6y ago
      I shall say peer to peer in the context of legit software like video conference, not for downloading movies. Peer to peer simply doesn't work since NAT. Skype used to be peer to peer but they backpedaled a while ago because this and more reasons that simply made p2p obsolete and broken. It's too long to cover in one message. Would you be interested if I write a blog post? How peer to peer architecture became obsolete and why no software is using it.
      - buzzdenver 6y ago
        I would read that blog post in a heartbeat.
      - buttersbrian 6y ago
        If I am understanding the premise: In a scenario of 12 people video chatting around the world, I don't believe you could guarantee consistent high-speed connections between the involved parties.
vardump 6y ago
I'm sure Oracle will find ways to somehow screw their new cloud customers given enough time.
- kbenson 6y ago
  At first this sounds like a flippant bash against Oracle, but it may very well be worth considering carefully. Everything I've ever heard about Oracle makes me think the culture is about making the customer think they got a good deal and completely screwing them when the actual details come out, but by then there's the sunk-cost fallacy and the actual cost of migrating to a different solution working for them. So, if that reputation is well earned, it's important to consider whether you'll actually come out ahead in the negotiations. One thing that's almost certain is that Oracle has a lot more experience in negotiating this particular form of contract (where one side tries to screw the other while still somehow retaining their business) than you or your company does.
ralphc 6y ago
Oracle laid me off in 2012, then Ellison bought a volcanic island. He truly is a Bond villain.

eloff 6y ago

Yeah, the other clouds charge way too much for bandwidth. For zoom this is probably their dominant cost. Also transfer between zones is expensive: $0.02/GB at AWS. And you typically need that if you're going to make any highly available system.

tthrowaway365 6y ago

Zoom wouldn’t pay list. Realize cloud providers can provide offline pricing to Zoom that would match or beat the oracle network pricing for a “like” offering. Things like fixed cost throughput links, and fixed network pricing is available with contracting for large companies. It’s likely oracle simply “bought the business” and is loosing money on the hosting. Hoping to make it up with a co-sell commission based contract, or by leveraging this as PR/marketing. Cory Quinn is right. List price is expensive. But if you spend 1mil/year or more you shouldn’t be paying list. If you are zoom getting 90% off egress is totally negotiable.

hyperpape 6y ago
Of course, Zoom won't pay list. But they also won't pay list on Oracle either. I wouldn't trust the "10x" comparison, but the bottom line that it's more expensive seems reasonable. Corey Quinn seems like a smart guy with a lot of connections. If he doesn't regularly have big fish in the AWS ecosystem telling him (off the record!) "here's the deals we got", he's not doing his job right. If someone similarly knowledge comes back and say "actually, Oracle doesn't beat AWS on bandwidth when you're a big fish", I'll say not to trust this article.
- jedberg 6y ago
  I’ve never done a negotiation with Oracle, but I’ve seen the AWS bills of a couple of their biggest customers. AWS technically doesn’t do discounts. They just invent new usage tiers with phenomenal pricing. Which effectively means bulk discounts. I’m sure Zoom is getting a great deal on outbound bandwidth. Especially since they are multi-cloud and can shift traffic between providers at a whim to squeeze their providers. Ironically they would probably qualify for much bigger discounts if all of their workloads were in a single cloud.
  - hyperpape 6y ago
    Thanks, this is interesting. But it's not 100% clear to me: are you saying it's likely their AWS bill is low enough to invalidate this analysis? Also, if they're as cloud agnostic as it sounds, wouldn't they have evaluated the cost-savings of single cloud while negotiating?
    - jedberg 6y ago
      I have no idea since I've never tried to negotiate with Oracle Cloud. I don't know how hard they negotiate (but it's Oracle so probably pretty hard). I'd say the analysis is accurate in directionality but maybe not magnitude. But more importantly I think it's just Corey's way of poking Amazon about their high prices. :) But I will say that Amazon is pretty clear that you'll get a better discount if your workload is 100% with them. Like if you put 1/3 of your workload in AWS, it will be more than 1/3 the price of putting your whole workload there. Or to put another way, if you triple your workload you won't triple your price.
      - user5994461 6y ago
        >>> I don't know how hard they negotiate (but it's Oracle so probably pretty hard). Can't be too hard. It's Oracle so they let you in nicely enough, then they screw you later when you're locked in, increasing cost substantially on every renewal, changing terms and billing arbitrary things. I think Zoom could get away with any terms really (AWS is not hard to beat on bandwidth to begin with). Oracle cloud is desperate for customers, even more than Azure and GCP, but Oracle has the willingness to increase costs tenfold and change terms arbitrarily later unlike competitors, so all things considered don't expect them to have too much regards for the (initial) terms. On the database they are notorious for trying to charge test databases (normally don't need a full license), any server they can find (up to you to evidence it's not running oracle) or even your entire virtualized datacenter because VMs can migrate so the entire datacenter should be the machine when it comes to billing and they bill by core.

nakodari 6y ago

I agree with Corey Quinn. This should be a wake-up call for the dominant players in this field. The high outbound bandwidth cost of AWS, Azure, and Google Cloud makes no sense in 2020. I hope this causes AWS and others to reduce their outbound bandwidth and inbound accelerated transfer cost to at least half or more after watching Zoom migrate to Oracle.

closeparen 6y ago
The cloud providers are optimized for the corporate datacenter use case: internal applications that talk to each other and employees. That stuff is harder to do with traditional web hosts, which are built around each server being exposed to the internet and until recently had no answer to VPC. The kinds of websites that could easily be hosted on the likes of Linode and DigitalOcean still ought to be.
- rhizome 6y ago
  >traditional web hosts, which are built around each server being exposed to the internet and until recently had no answer to VPC This is absolutely wrong unless you have rank n00bz leading your technology. This isn't even touching the implication that anything is harder to do outside of cloud hosting providers, it's just accounting for, well, the entire industry prior to, oh, let's say 10 years ago. It's not as prehistoric as it sounds, and in many (if not most) cases, the cloud providers are just slapping new trademarkable names on those classic architecture choices.
  - closeparen 6y ago
    Web hosts. There were of course other infrastructure providers that would support more complex architectures, but mostly of the “call us” variety.
    - rhizome 6y ago
      That is a distinction without a difference for me here, but the people have spoken regardless.

deleted 6y ago

[deleted]

jandrese 6y ago

So the upshot is that they're barely using the database product and went with Oracle because they're much more competitive on bandwidth? I guess that makes sense. I wonder how stable that will be long term. Oracle probably has cheap bandwidth so you'll put down your first child on the database transaction costs, but if you're only using them for the bandwidth they'll probably won't be happy to let so much potential profit sit on the table.

enitihas 6y ago
In this case, they will be far more happy with the popularity associated with Zoom using them, much more than whatever money zoom will pay them. This gives their marketing/sales folks far more material than the money from Zoom can buy them.
- ineedasername 6y ago
  I wouldn't count on Oracle as a whole, and especially individual Oracle sales managers that would benefit from turning the screws--- I wouldn't count on any of them to think all that long-term about things.

SteveNuts 6y ago

We're an outbound bandwidth heavy shop also and have been shopping Oracle cloud for the same reason. We've been told over and over that we don't spend enough with AWS to start seeing any discounts so to hell with it.

user5994461 6y ago
Have you considered IBM SoftLayer? That would be the more serious contender in my opinion if one doesn't want AWS/GCP.
- 1cvmask 6y ago
  Do you use Softlayer? If so how has your experience been to date?

ApolloFortyNine 6y ago

All bandwidth isn't created equal, but I'd assume Oracle bandwidth won't be bottom tier. It is still something to think about though when shopping providers, I assume any major cloud provider will have great peering, but a gigabit line from a random dedicated server provider will be noticeably slower for many customers.

deanCommie 6y ago

Genuine question coming from a lack of understanding of building a many-to-many video chatting app. Wouldn't you want to send the data peer-to-peer between the users rather than funneling everything through the Zoom server? You'd get better latency, and you wouldn't have to pay for the network streaming costs...

user5994461 6y ago
Peer to peer has been dead for more than a decade. Computers are all behind firewall/NAT, they can't connect to one another. Mobiles are behind whatever is the mobile network nowadays, it's outbound only, nothing can connect in.
- boredgamer2 6y ago
  > Peer to peer has been dead for more than a decade. Source? Some apps like bittorrent have increased in the past decade, have they not?
  - user5994461 6y ago
    I shall say peer to peer in the context of legit software like video conference, not for downloading movies. Peer to peer simply doesn't work since NAT. Skype used to be peer to peer but they backpedaled a while ago because this and more reasons that simply made p2p obsolete and broken. It's too long to cover in one message. Would you be interested if I write a blog post? How peer to peer architecture became obsolete and why no software is using it.
    - buzzdenver 6y ago
      I would read that blog post in a heartbeat.
    - buttersbrian 6y ago
      If I am understanding the premise: In a scenario of 12 people video chatting around the world, I don't believe you could guarantee consistent high-speed connections between the involved parties.

vardump 6y ago

I'm sure Oracle will find ways to somehow screw their new cloud customers given enough time.

kbenson 6y ago
At first this sounds like a flippant bash against Oracle, but it may very well be worth considering carefully. Everything I've ever heard about Oracle makes me think the culture is about making the customer think they got a good deal and completely screwing them when the actual details come out, but by then there's the sunk-cost fallacy and the actual cost of migrating to a different solution working for them. So, if that reputation is well earned, it's important to consider whether you'll actually come out ahead in the negotiations. One thing that's almost certain is that Oracle has a lot more experience in negotiating this particular form of contract (where one side tries to screw the other while still somehow retaining their business) than you or your company does.

ralphc 6y ago

Oracle laid me off in 2012, then Ellison bought a volcanic island. He truly is a Bond villain.