6 ms·

Snap was spending 2B over 5 years - so 400M/yr. By comparison, Uber, who operates under managed colo, spends nearly 200M/yr alone on real estate for their datac

Snap was spending 2B over 5 years - so 400M/yr. By comparison, Uber, who operates under managed colo, spends nearly 200M/yr alone on real estate for their datacenters. Who knows how much they are paying in engineering salaries so manage those datacenters. Personally I don't think there's a one size fits all solution, you will have to do the math (like I'm sure Snap, Netflix and others have done) to see if cloud is worth it. However, I agree, for most teams the default should be cloud.

objclxt 7y ago
400M/yr was just Snap’s Google Cloud spend, they also signed a 1B deal with AWS for redundancy.
avifreedman 7y ago
Unless that's capex for building, or includes server capex that they depreciate, that seems way high given Uber's scale. A pretty dense cabinet should only cost ~$1400/mo at wholesale (1MW+ rooms) rates, and $200M is 143,000 cabinets. And it's public that Uber uses multiple clouds as well. Disclaimer: I haven't reviewed public Uber filings, would be very interested if there's any data that indicates they're really spending $200M on opex for real estate (which would be equivalent to $400M/year on cloud, which is either opex or potentially mix if there is some reserved instance-type cloud spend).
- user5994461 7y ago
  The 42U rack might be only $1400 per month but the servers to put inside are $5000 upfront per U.
  - wongarsu 7y ago
    42U times $5000 divided by 3 years is still only $5833 per month per rack. Add the $1400 and we have a total amortized rack cost of $7233 per month. (naively assuming you could fill every spot in the rack with servers). But servers can't be included in a "Uber spends nearly 200M/yr alone on real estate for their datacenters" figure anyway.
    - user5994461 7y ago
      The rack is $2800 per month, not $1400. The lowest advertised pricing does not include enough power to supply half of what's in the rack. Add $200 per server per month to have a gigabit uplink. Add $4000 per server per lifetime for VmWare licenses. These are reasonable estimates of course. Could be multiple of that depending on what hardware is used and what colo. Physical hardware easily gets as expensive as any cloud.
      - dijit 7y ago
        Not easily; you’re making the argument that there can be high expenses for collocating but you’re talking about a -lot- of computational power. I know that hardware varies a lot for sure, but for context I put together 3 racks 50% density with an 800gbit backplane for around 18k eur/mo. I spared no expense, official juniper QSFPs (which are egregiously overpriced) and top of the line Dell servers with full out of band licenses. And once there: interconnected bandwidth and IOPs became “free” (or, no extra charge). We put the same application in cloud And it costs us 40k eur/mo with a heavy amount of optimisation, with half-sized instances and an aggressive optimisation in bandwidth/iops. Clouds “sticker price” to us is 4x that of physical. You can buy a lot of human time for that price.
        user5994461 7y ago
        Physical infrastructure is always overprovisioned because it has to be planned long in advance and the smallest unit is huge (8 cores? 128 GB of RAM? for a small server). If anything that's an argument against physical infra, not in favor of. Although it's fine if one wants a lot of the same big servers (an Hadoop cluster, or video computing cluster, or a CDN), which are the few use cases where physical can make sense (and hybrid cloud probably makes even more sense). With AWS, you'd never spin half of that infra upfront. You'd spin a few VMs and start running stuff. If the project goes well, spin more or bigger VMs, otherwise spin down. Cost is very dynamic and the company doesn't have to spend half a million upfront, which is a big financial problem for many companies. Anyway. We can both agree on AWS being overpriced. The reference on costs should be Google Cloud if one is cost conscious, not AWS. Google Cloud is often half the costs of AWS for the same thing. AWS vs Google comparison, bit old and instance types have changed but relative pricing has not moved https://thehftguy.com/2018/11/13/2018-cloud-pricing-aws-now-cheaper-than-softlayer/ https://thehftguy.com/2018/11/13/2018-cloud-pricing-aws-now-... And this one more recent since they've released high memory instances to compete with SoftLayer: https://thehftguy.com/2018/11/13/2018-cloud-pricing-aws-now-cheaper-than-softlayer/ https://thehftguy.com/2018/11/13/2018-cloud-pricing-aws-now-...
  - avifreedman 7y ago
    As the others say in the comments, understand completely re: servers. And network. And some management overhead. I will write a blog post laying out our COGS at Kentik including all these factors, hope it'll wind up helpful.
- twic 7y ago
  > A pretty dense cabinet should only cost ~$1400/mo at wholesale (1MW+ rooms) rates, and $200M is 143,000 cabinets. The 200M is for a year - at $1400/mo, that's 11905 cabinets.
raverbashing 7y ago
Well those numbers are... weird Also Uber seems to be much less computing/BW demanding than Snap
twic 7y ago
> Uber, who operates under managed colo, spends nearly 200M/yr alone on real estate for their datacenters 200 million a year, huh. The cost of commercial office space in the U.S. can range from $6 per square foot in low cost regions to over $12 per square foot in New York City. On average, a 50-cabinet data center will occupy about 1,700 square feet. At a median cost of $8 per square foot, the space alone would cost about $13,600 per month. [1] Are Uber renting on the order of two million square feet of data centre? Do they have sixty thousand cabinets of hardware? If they do, i would absolutely love to see a quote for how much it would cost them to run in the cloud. I think it's far more likely that number is bullshit. [1] https://npifinancial.com/blog/data-center-pricing/ https://npifinancial.com/blog/data-center-pricing/
- nemothekid 7y ago
  >Office and data center rent expense was $194 million and $221 million for the years ended December 31, 2017 and 2018, respectively. https://s23.q4cdn.com/407969754/files/doc_financials/2019/ar/Uber-Technologies-Inc-2019-Annual-Report.pdf https://s23.q4cdn.com/407969754/files/doc_financials/2019/ar... Page 124
  - ptomato 7y ago
    So that number includes (and is almost certainly dominated by) the cost of their office space.
StreamBright 7y ago
Exactly. Calculating TCO for on-prem vs cloud is tricky. Any time we have done it cloud came out the winner. I also found exceptions: predictable static workloads requiring a huge amount of bandwidth, mostly outgoing. An average company that needs some CPU and storage for various unpredictable workloads benefits from cloud services greatly.
junkilo 7y ago
disclaimer: former uber engineer we ran the numbers continually and like others mentioned, it was a no-brainer to build on-prem. that said, there are a few use cases where aws/gcp are a great fit. people selling cloud without putting in real engineering work to enterprises generally make my life harder than it already is.

objclxt 7y ago

400M/yr was just Snap’s Google Cloud spend, they also signed a 1B deal with AWS for redundancy.

avifreedman 7y ago

Unless that's capex for building, or includes server capex that they depreciate, that seems way high given Uber's scale. A pretty dense cabinet should only cost ~$1400/mo at wholesale (1MW+ rooms) rates, and $200M is 143,000 cabinets. And it's public that Uber uses multiple clouds as well. Disclaimer: I haven't reviewed public Uber filings, would be very interested if there's any data that indicates they're really spending $200M on opex for real estate (which would be equivalent to $400M/year on cloud, which is either opex or potentially mix if there is some reserved instance-type cloud spend).

user5994461 7y ago
The 42U rack might be only $1400 per month but the servers to put inside are $5000 upfront per U.
- wongarsu 7y ago
  42U times $5000 divided by 3 years is still only $5833 per month per rack. Add the $1400 and we have a total amortized rack cost of $7233 per month. (naively assuming you could fill every spot in the rack with servers). But servers can't be included in a "Uber spends nearly 200M/yr alone on real estate for their datacenters" figure anyway.
  - user5994461 7y ago
    The rack is $2800 per month, not $1400. The lowest advertised pricing does not include enough power to supply half of what's in the rack. Add $200 per server per month to have a gigabit uplink. Add $4000 per server per lifetime for VmWare licenses. These are reasonable estimates of course. Could be multiple of that depending on what hardware is used and what colo. Physical hardware easily gets as expensive as any cloud.
    - dijit 7y ago
      Not easily; you’re making the argument that there can be high expenses for collocating but you’re talking about a -lot- of computational power. I know that hardware varies a lot for sure, but for context I put together 3 racks 50% density with an 800gbit backplane for around 18k eur/mo. I spared no expense, official juniper QSFPs (which are egregiously overpriced) and top of the line Dell servers with full out of band licenses. And once there: interconnected bandwidth and IOPs became “free” (or, no extra charge). We put the same application in cloud And it costs us 40k eur/mo with a heavy amount of optimisation, with half-sized instances and an aggressive optimisation in bandwidth/iops. Clouds “sticker price” to us is 4x that of physical. You can buy a lot of human time for that price.
      - user5994461 7y ago
        Physical infrastructure is always overprovisioned because it has to be planned long in advance and the smallest unit is huge (8 cores? 128 GB of RAM? for a small server). If anything that's an argument against physical infra, not in favor of. Although it's fine if one wants a lot of the same big servers (an Hadoop cluster, or video computing cluster, or a CDN), which are the few use cases where physical can make sense (and hybrid cloud probably makes even more sense). With AWS, you'd never spin half of that infra upfront. You'd spin a few VMs and start running stuff. If the project goes well, spin more or bigger VMs, otherwise spin down. Cost is very dynamic and the company doesn't have to spend half a million upfront, which is a big financial problem for many companies. Anyway. We can both agree on AWS being overpriced. The reference on costs should be Google Cloud if one is cost conscious, not AWS. Google Cloud is often half the costs of AWS for the same thing. AWS vs Google comparison, bit old and instance types have changed but relative pricing has not moved https://thehftguy.com/2018/11/13/2018-cloud-pricing-aws-now-cheaper-than-softlayer/ https://thehftguy.com/2018/11/13/2018-cloud-pricing-aws-now-... And this one more recent since they've released high memory instances to compete with SoftLayer: https://thehftguy.com/2018/11/13/2018-cloud-pricing-aws-now-cheaper-than-softlayer/ https://thehftguy.com/2018/11/13/2018-cloud-pricing-aws-now-...
- avifreedman 7y ago
  As the others say in the comments, understand completely re: servers. And network. And some management overhead. I will write a blog post laying out our COGS at Kentik including all these factors, hope it'll wind up helpful.
twic 7y ago
> A pretty dense cabinet should only cost ~$1400/mo at wholesale (1MW+ rooms) rates, and $200M is 143,000 cabinets. The 200M is for a year - at $1400/mo, that's 11905 cabinets.

raverbashing 7y ago

Well those numbers are... weird Also Uber seems to be much less computing/BW demanding than Snap

twic 7y ago

> Uber, who operates under managed colo, spends nearly 200M/yr alone on real estate for their datacenters 200 million a year, huh. The cost of commercial office space in the U.S. can range from $6 per square foot in low cost regions to over $12 per square foot in New York City. On average, a 50-cabinet data center will occupy about 1,700 square feet. At a median cost of $8 per square foot, the space alone would cost about $13,600 per month. [1] Are Uber renting on the order of two million square feet of data centre? Do they have sixty thousand cabinets of hardware? If they do, i would absolutely love to see a quote for how much it would cost them to run in the cloud. I think it's far more likely that number is bullshit. [1] https://npifinancial.com/blog/data-center-pricing/ https://npifinancial.com/blog/data-center-pricing/

nemothekid 7y ago
>Office and data center rent expense was $194 million and $221 million for the years ended December 31, 2017 and 2018, respectively. https://s23.q4cdn.com/407969754/files/doc_financials/2019/ar/Uber-Technologies-Inc-2019-Annual-Report.pdf https://s23.q4cdn.com/407969754/files/doc_financials/2019/ar... Page 124
- ptomato 7y ago
  So that number includes (and is almost certainly dominated by) the cost of their office space.

StreamBright 7y ago

Exactly. Calculating TCO for on-prem vs cloud is tricky. Any time we have done it cloud came out the winner. I also found exceptions: predictable static workloads requiring a huge amount of bandwidth, mostly outgoing. An average company that needs some CPU and storage for various unpredictable workloads benefits from cloud services greatly.

junkilo 7y ago

disclaimer: former uber engineer we ran the numbers continually and like others mentioned, it was a no-brainer to build on-prem. that said, there are a few use cases where aws/gcp are a great fit. people selling cloud without putting in real engineering work to enterprises generally make my life harder than it already is.