7 ms·

While Graviton is impressive and probably an indication of things to come, you can't outright use "Amazon rents them cheaper to me" as an indication of the pric

While Graviton is impressive and probably an indication of things to come, you can't outright use "Amazon rents them cheaper to me" as an indication of the price performance of the chips themselves. Amazon is exactly the kind of company that would take 50% margin on their x86 servers and 0% margin on their Graviton servers in order to engineer a long term shift that's in their favor - the end of x86 server duopoly (or monopoly depending on how the wind is blowing).

delfinom 6y ago
Long term, Amazon is also the exact kind of company that would start making "modifications" to Graviton requiring you to purchase/use/license a special compiler to run ;)
- whoisthisfor 6y ago
  Can you point to a time Amazon did something like that? Not saying they won't, just any company can do it, it's more likely when they've done it in the past.
deleted 6y ago
[deleted]
013a 6y ago
I don't feel as sure about this; there's very little evidence that Amazon is putting a "50% margin", or any significant percent, on x86 servers. Sure, they're more expensive than, just for comparisons' sake, Linode or DigitalOcean, but EC2 instances are also roughly the same cost per-core and per-gb as Azure compute instances, which is a far more accurate comparison. Many people complain about AWS' networking costs, but I also suspect these are generally at-cost. A typical AWS region has terabits upon terabits of nano-second scale latency fiber ran between its AZs and out to the wider internet. Networking is an exponential problem; AWS doesn't overcharge for egress, they just simply haven't invested in building a solution that sacrifices quality for cost. Amazon really does not have a history of throwing huge margins on raw compute resources. What Amazon does is build valuable software and services around those raw resources, then put huge margins on those products. EC2 and S3 are likely very close to 0% margin; but DynamoDB, EFS, Lambda, etc are much higher margin. I've found AWS Transfer for SFTP [1] to be the most egregious and actually exploitative example of this; it effectively puts an SFTP gateway in front of an S3 bucket, and they'll charge you $216/month + egress AND ingress at ~150% the standard egress rate for that benefit (SFTP layers additional egress charges on-top-of the standard AWS transfer rates). [1] https://aws.amazon.com/aws-transfer-family/pricing/ https://aws.amazon.com/aws-transfer-family/pricing/
- discobean 6y ago
  Building managed applications is where the money is at for AWS for sure, Elasticache is another good example. The beauty is their managed services are great and worry free. Shameless plug - partly because of the high cost of sftp in AWS, and lack of ftp (understandable), and a bunch of people wanting the same in Azure / GCS, that made us start https://docevent.io https://docevent.io which has proved quite popular.
- reitzensteinm 6y ago
  A 32 core EPYC with 256gb will cost you $176/mo at Hetzner, and $2,009/mo on EC2. Obviously it's on demand pricing and the hardware isn't quite the same, with Hetzner using individual servers with 1P chips. Amazon also has 10gbps networking. But still, zero margin? Let's call it a factor of two to bridge the monthly and on demand gap - does it really cost Amazon five times as much to bring you each core of Zen 2 even with all their scale? I don't think Amazon overcharges for what they provide, but I bet their gross margins even on the vanilla offerings are pretty good, as are those of Google Cloud and Azure.
  - deleted 6y ago
    [deleted]
  - 013a 6y ago
    Very few of AWS's costs are in the hardware. Nearly all of Hetzner's costs are in the hardware. That's why AWS, and Azure, and GCP are so much more expensive. Margin is a really weird statistic to calculate in the "cloud". Sure, you could just mortgage the cost of the silicon across N months and say "their margin is huge", but realistically AWS has far more complexity: the costs of the datacenter, the cost of being able to spin up one of these 32 core EPYC servers in any one of six availability zones within a region and get 0 cost terabit-scale networking between them, the cost of each of those availability zones not even being one building but being multiple near-located buildings, the cost of your instance storage not even being physically attached to the same hardware as your VM (can you imagine the complexity of this? that they have dedicated EBS machines and dedicated EC2 machines, and yet EBS still exhibits near-SSD like performance?), the cost of VPC and its tremedous capability to model basically any on-prem private network at "no cost" (but, there's always a cost); that's all what you're paying for when you pay for cores. Its the stuff that everyone uses, but its hard to quantify into just saying "jeeze an EPYC chip should be way cheaper than this" And, again, if all you want is a 32 core EPYC server in your basement, then buy a 32 core EPYC server and put it in your basement. But, my suspicion is not that a 32 core EPYC server on AWS makes zero margin; its that, if the only service AWS ran was EC2, priced how it is today, they'd be making far less profit than when that calculation includes all of their managed services. EC2 is not the critical component of AWS's revenue model.
9OzUIvDwF4LvfUM 6y ago
Why would they want to shift people to ARM based instances if they weren't more efficient?
gpderetta 6y ago
even if it were the case, it is still a saving for the end user and it is a threat to Intel.

delfinom 6y ago

Long term, Amazon is also the exact kind of company that would start making "modifications" to Graviton requiring you to purchase/use/license a special compiler to run ;)

whoisthisfor 6y ago
Can you point to a time Amazon did something like that? Not saying they won't, just any company can do it, it's more likely when they've done it in the past.

deleted 6y ago

[deleted]

013a 6y ago

I don't feel as sure about this; there's very little evidence that Amazon is putting a "50% margin", or any significant percent, on x86 servers. Sure, they're more expensive than, just for comparisons' sake, Linode or DigitalOcean, but EC2 instances are also roughly the same cost per-core and per-gb as Azure compute instances, which is a far more accurate comparison. Many people complain about AWS' networking costs, but I also suspect these are generally at-cost. A typical AWS region has terabits upon terabits of nano-second scale latency fiber ran between its AZs and out to the wider internet. Networking is an exponential problem; AWS doesn't overcharge for egress, they just simply haven't invested in building a solution that sacrifices quality for cost. Amazon really does not have a history of throwing huge margins on raw compute resources. What Amazon does is build valuable software and services around those raw resources, then put huge margins on those products. EC2 and S3 are likely very close to 0% margin; but DynamoDB, EFS, Lambda, etc are much higher margin. I've found AWS Transfer for SFTP [1] to be the most egregious and actually exploitative example of this; it effectively puts an SFTP gateway in front of an S3 bucket, and they'll charge you $216/month + egress AND ingress at ~150% the standard egress rate for that benefit (SFTP layers additional egress charges on-top-of the standard AWS transfer rates). [1] https://aws.amazon.com/aws-transfer-family/pricing/ https://aws.amazon.com/aws-transfer-family/pricing/

discobean 6y ago
Building managed applications is where the money is at for AWS for sure, Elasticache is another good example. The beauty is their managed services are great and worry free. Shameless plug - partly because of the high cost of sftp in AWS, and lack of ftp (understandable), and a bunch of people wanting the same in Azure / GCS, that made us start https://docevent.io https://docevent.io which has proved quite popular.
reitzensteinm 6y ago
A 32 core EPYC with 256gb will cost you $176/mo at Hetzner, and $2,009/mo on EC2. Obviously it's on demand pricing and the hardware isn't quite the same, with Hetzner using individual servers with 1P chips. Amazon also has 10gbps networking. But still, zero margin? Let's call it a factor of two to bridge the monthly and on demand gap - does it really cost Amazon five times as much to bring you each core of Zen 2 even with all their scale? I don't think Amazon overcharges for what they provide, but I bet their gross margins even on the vanilla offerings are pretty good, as are those of Google Cloud and Azure.
- deleted 6y ago
  [deleted]
- 013a 6y ago
  Very few of AWS's costs are in the hardware. Nearly all of Hetzner's costs are in the hardware. That's why AWS, and Azure, and GCP are so much more expensive. Margin is a really weird statistic to calculate in the "cloud". Sure, you could just mortgage the cost of the silicon across N months and say "their margin is huge", but realistically AWS has far more complexity: the costs of the datacenter, the cost of being able to spin up one of these 32 core EPYC servers in any one of six availability zones within a region and get 0 cost terabit-scale networking between them, the cost of each of those availability zones not even being one building but being multiple near-located buildings, the cost of your instance storage not even being physically attached to the same hardware as your VM (can you imagine the complexity of this? that they have dedicated EBS machines and dedicated EC2 machines, and yet EBS still exhibits near-SSD like performance?), the cost of VPC and its tremedous capability to model basically any on-prem private network at "no cost" (but, there's always a cost); that's all what you're paying for when you pay for cores. Its the stuff that everyone uses, but its hard to quantify into just saying "jeeze an EPYC chip should be way cheaper than this" And, again, if all you want is a 32 core EPYC server in your basement, then buy a 32 core EPYC server and put it in your basement. But, my suspicion is not that a 32 core EPYC server on AWS makes zero margin; its that, if the only service AWS ran was EC2, priced how it is today, they'd be making far less profit than when that calculation includes all of their managed services. EC2 is not the critical component of AWS's revenue model.

9OzUIvDwF4LvfUM 6y ago

Why would they want to shift people to ARM based instances if they weren't more efficient?

gpderetta 6y ago

even if it were the case, it is still a saving for the end user and it is a threat to Intel.