4 ms·

Is it just me or is Total Cost of Ownership being talked about way less often these days?

by JanisL 6y ago

blaser-waffle 6y ago
It's easy to game. Source: was a sales engineer for ISPs and Data Centers. So assume you're doing a 3-year or 5-year TCO -- you build in credits, discounts, and bundled options. Execs are looking for a 3-year apples-to-apples spend, and you make your TCO look fucking amazing. They see the low price and decent technical options and they bite. 3 years later those credits vanish and they're paying full OpEx costs. And after 3 years they're now invested -- stuck -- in their space/circuit/whatever. You can start raising the price or negotiating new contracts. Same thing with the cloud, for that matter. Cut a glorious bulk deal with Microsoft for Azure space, and then after you've moved everything to MS they can start nickle and diming you -- cuz the cost of moving that load to AWS or GCP isn't cheap, and you're not going out and buying more hardware and going back to CoLo are you?
- JanisL 6y ago
  Thanks for this perspective, I guess the gameability of the metrics explains a lot.
- jesterson 6y ago
  Exactly that. A lot of people do not understand that and get into trap of those credits "thousands of dollars worth" just to be scalped by their vendor-locked costs after those credits vanish. After all people who make decision on customer side are in same trap - in 3-5 years if not earlier they won't be at the company anymore and it won't be their problem.
StreamBright 6y ago
Yes and also there is a ton of hand-wavy, without any merit bullcrap floating on HN. Without any in-depth analysis, numbers, apple-to-apple comparisons. AWS and Azure would not exist if moving to the cloud was a bad move. There are so many companies whose primary business is not to build data centers, yet they require some computational resources. These are the companies that are the primary users of cloud computing. Based on my experience, most of the financial companies fall into this category, including banks. Other industries that I have experience with include, travel, gaming, pharmaceutical, logistics, and a few more. Microsoft is doing a great job to get the most enterprise customers, while AWS has stronger offerings. The biggest winners with cloud migrations are the companies who can start to auto-scale while previously was impossible because the on-prem datacenter had no such features, even if they had, they could not sell the extra capacity to other companies like AWS. Other great cost optimization opportunities include the option to try to run the workload on different node types and find the best fit. Also not an option with most on-prem DCs. S3 itself can solve problems that are very hard to solve. For example, you have different security zones and you need to copy data around in your DC. This becomes not necessary anymore with S3, just give different users different access level and you do not need to copy the data around anymore. This was one of the big selling points for one of your customers. I could go on and on. In the last 5 years, we have saved several millions of EURs for our clients and made businesses possible that was impossible using on-prem resources. But some HN knows better and they argue that all of these companies which are rolling on AWS are morons and they should have built they own DCs because it is cheaper while AWS became a ~10 billion income business unit. There is some irony in this, I guess.

Is it just me or is Total Cost of Ownership being talked about way less often these days?

by JanisL 6y ago

Is it just me or is Total Cost of Ownership being talked about way less often these days?

It's easy to game. Source: was a sales engineer for ISPs and Data Centers. So assume you're doing a 3-year or 5-year TCO -- you build in credits, discounts, and bundled options. Execs are looking for a 3-year apples-to-apples spend, and you make your TCO look fucking amazing. They see the low price and decent technical options and they bite. 3 years later those credits vanish and they're paying full OpEx costs. And after 3 years they're now invested -- stuck -- in their space/circuit/whatever. You can start raising the price or negotiating new contracts. Same thing with the cloud, for that matter. Cut a glorious bulk deal with Microsoft for Azure space, and then after you've moved everything to MS they can start nickle and diming you -- cuz the cost of moving that load to AWS or GCP isn't cheap, and you're not going out and buying more hardware and going back to CoLo are you?

JanisL 6y ago
Thanks for this perspective, I guess the gameability of the metrics explains a lot.
jesterson 6y ago
Exactly that. A lot of people do not understand that and get into trap of those credits "thousands of dollars worth" just to be scalped by their vendor-locked costs after those credits vanish. After all people who make decision on customer side are in same trap - in 3-5 years if not earlier they won't be at the company anymore and it won't be their problem.

StreamBright 6y ago

Yes and also there is a ton of hand-wavy, without any merit bullcrap floating on HN. Without any in-depth analysis, numbers, apple-to-apple comparisons. AWS and Azure would not exist if moving to the cloud was a bad move. There are so many companies whose primary business is not to build data centers, yet they require some computational resources. These are the companies that are the primary users of cloud computing. Based on my experience, most of the financial companies fall into this category, including banks. Other industries that I have experience with include, travel, gaming, pharmaceutical, logistics, and a few more. Microsoft is doing a great job to get the most enterprise customers, while AWS has stronger offerings. The biggest winners with cloud migrations are the companies who can start to auto-scale while previously was impossible because the on-prem datacenter had no such features, even if they had, they could not sell the extra capacity to other companies like AWS. Other great cost optimization opportunities include the option to try to run the workload on different node types and find the best fit. Also not an option with most on-prem DCs. S3 itself can solve problems that are very hard to solve. For example, you have different security zones and you need to copy data around in your DC. This becomes not necessary anymore with S3, just give different users different access level and you do not need to copy the data around anymore. This was one of the big selling points for one of your customers. I could go on and on. In the last 5 years, we have saved several millions of EURs for our clients and made businesses possible that was impossible using on-prem resources. But some HN knows better and they argue that all of these companies which are rolling on AWS are morons and they should have built they own DCs because it is cheaper while AWS became a ~10 billion income business unit. There is some irony in this, I guess.