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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 expensi

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.
hinkley 6y ago
Also, AWS doesn't get much PR value from landing Zoom. Nor would Google. Azure I couldn't say but let's assume 'moderate' and put Oracle at 'high'. From a PR standpoint it makes sense for Oracle to offer Zoom a deal that they initially make no money off of, bask in the PR value, and prioritize work that reduces the labor and equipment cost for managing a customer like Zoom until they do make money. What work is AWS or Google going to do to reduce overhead on a Zoom-sized customer today? Wouldn't they have already done it?
- enitihas 6y ago
  Google needs good PR fare more than Azure though. Azure is doing very well, much better than GCP.
- txcwpalpha 6y ago
  To reinforce your point, Zoom is already heavily on both AWS and Azure, and I’m sure they’ve both seen massive increased spend from Zoom over the last couple months. But of course you don’t hear any of that from a PR standpoint because it’s really just business as usual as far as they are concerned. The Oracle news is news because it’s a deviation from the business as usual, I suppose.
  - hinkley 6y ago
    Sure. If I'm overpaying to the tune of 3 FTE's salaries due to an overpriced vendor that's not very good, but I can rationalize it. I might even be able to make a story about productivity. It's not great but what's the opportunity cost of fixing it now? If my traffic goes up by 10x and now I'm overpaying 30 FTE's worth of cash, I am going to have a hard time stomaching that fact, and now the opportunity cost situation is reversed. What could I do with another team?
- hyperpape 6y ago
  While it's possible, even likely that Oracle might give Zoom a sweet deal, I think it's subtly different from what Quinn describes. 1. "AWS/GCP/Azure are price competitive with Oracle for this use case, but Oracle will give Zoom a better deal because they're trying to get business" is pretty boring. 2. "AWS/GCP/Azure overprice their bandwidth and Oracle doesn't" is interesting.

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.

hinkley 6y ago

Also, AWS doesn't get much PR value from landing Zoom. Nor would Google. Azure I couldn't say but let's assume 'moderate' and put Oracle at 'high'. From a PR standpoint it makes sense for Oracle to offer Zoom a deal that they initially make no money off of, bask in the PR value, and prioritize work that reduces the labor and equipment cost for managing a customer like Zoom until they do make money. What work is AWS or Google going to do to reduce overhead on a Zoom-sized customer today? Wouldn't they have already done it?

enitihas 6y ago
Google needs good PR fare more than Azure though. Azure is doing very well, much better than GCP.
txcwpalpha 6y ago
To reinforce your point, Zoom is already heavily on both AWS and Azure, and I’m sure they’ve both seen massive increased spend from Zoom over the last couple months. But of course you don’t hear any of that from a PR standpoint because it’s really just business as usual as far as they are concerned. The Oracle news is news because it’s a deviation from the business as usual, I suppose.
- hinkley 6y ago
  Sure. If I'm overpaying to the tune of 3 FTE's salaries due to an overpriced vendor that's not very good, but I can rationalize it. I might even be able to make a story about productivity. It's not great but what's the opportunity cost of fixing it now? If my traffic goes up by 10x and now I'm overpaying 30 FTE's worth of cash, I am going to have a hard time stomaching that fact, and now the opportunity cost situation is reversed. What could I do with another team?
hyperpape 6y ago
While it's possible, even likely that Oracle might give Zoom a sweet deal, I think it's subtly different from what Quinn describes. 1. "AWS/GCP/Azure are price competitive with Oracle for this use case, but Oracle will give Zoom a better deal because they're trying to get business" is pretty boring. 2. "AWS/GCP/Azure overprice their bandwidth and Oracle doesn't" is interesting.