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Just as a reminder: You are not Dropbox. You personally need to run the numbers with both scenarios. Depending on your use case, it may be cheaper to be in AWS,

Just as a reminder: You are not Dropbox. You personally need to run the numbers with both scenarios. Depending on your use case, it may be cheaper to be in AWS, and it may be cheaper to be co-located. If you are as big as Dropbox, it may be cheaper to build your own data center. It reminds me of the arguments for and against K8s. Most of the discussion is based on use case, and not considering the solution space for all solutions. E.g. if I'm running an Erlang solution in K8s, or have a small number of servers, I may have better options. It isn't only about scale. It takes understanding your system and your needs in depth, and any short cuts lead to cost inefficiencies.

macspoofing 6y ago
>You are not Dropbox That may actually work the opposite way. The big guys can negotiate pricing with the cloud providers to the point where they may be running at close to cost. It's the small and mid tiers that get hosed with cloud pricing. >You personally need to run the numbers with both scenarios. Depending on your use case, it may be cheaper to be in AWS I'm not sure about that. Certainly cloud infrastructure provides a level of flexibility which may be advantageous if you're going through high rate of growth. Outside of that, I'm not sure you'd see any cost savings.
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- vinay_ys 6y ago
  In fact it is easier to get bigger discounts if you are a mid-size customer than if you are a big customer. If you are a very big customer, then any discount given to you will directly affect the cloud business bottomline. A public cloud inherently/structurally has more costs because it is built to be truly multi-tenant and has lots of elastic capacity. A single tenant private cloud can cut out a lot of bells and whistles and can be tailored to the needs of the company's private use-case – this brings down the cost significantly. If your compute/storage bill is greater than $10 million per year, then it is highly likely that for the same money you will get much higher compute/storage capacity in a private cloud. And that gives you more headroom for growth/elasticity etc. If your bill is greater than $30 million per year, then you will likely save significantly as well as get other strategic advantages – especially if your infra scale continues to grow over next 2-5 years.
evrydayhustling 6y ago
Here's another way that you're not Dropbox (unless you are): you are not a public company that gets points from investors for removing [$35M] dollars from COGS (cost of goods sold), even if you spend [$40M] on R&D + capitalized expenditures to replace it. Stories like this can be really misleading because large companies almost can't help but trick themselves into financial shenanigans. It's very possible that Dropbox just spent $100M upfront to start saving $35M / year relative to AWS current prices... but discovers in year 3 that they are no longer saving money because AWS has reduced prices via their own R&D, which is spread over a massively larger customer base. Now, because Dropbox is a storage company, it may well make since for them to continue R&D and try to keep pace with AWS, at least for their own needs. But 99% of other companies - of any size - would likely fall on the wrong side of the scenario above.
- dswalter 6y ago
  Why must Amazon pass off its savings to your org, in this example, rather than taking most of those realized R&D savings to their own investors? Sure, AWS may be constantly innovating on doing things more cheaply and scalably. Sometimes, those savings get passed off to the customer; but not most of it, and not necessarily all that frequently.
  - richardwhiuk 6y ago
    Because Google and Microsoft are competing against them.
  - HatchedLake721 6y ago
    > ... and not necessarily all that frequently. Did you miss where AWS reduces prices multiple times a year? I don't know the latest figure, but as of 2018, they reduced prices 67 times since launch in 2006.
    - justincormack 6y ago
      There have been 6 price reductions this year https://aws.amazon.com/blogs/aws/category/price-reduction/ https://aws.amazon.com/blogs/aws/category/price-reduction/ you are probably not using any of the services in question. The only S3 price reduction I can find was in 2012 https://aws.amazon.com/blogs/aws/amazon-s3-price-reduction/ https://aws.amazon.com/blogs/aws/amazon-s3-price-reduction/
data_spy 6y ago
Agreed. I work at a company that does 150 Billion transactions a day and it is cheaper being in the cloud than on prem for us. Maybe the variable cost is more but the fixed cost is a lot less for the business.
- ryanlol 6y ago
  Cloud vs on prem is a ridiculous comparison. The sweet spot is almost always in the middle.
mike_d 6y ago
> ...and it may be cheaper to be co-located. If you are as big as Dropbox, it may be cheaper to build your own data center. Nothing I have seen indicates dropbox "built its own datacenter." It looks like they are in Equinix, CoreSite, and DRT colocation.
- ebiester 6y ago
  You're right - I misspoke, and that likely makes more sense at their scale. At some point, I am sure they will again run the numbers.

macspoofing 6y ago

>You are not Dropbox That may actually work the opposite way. The big guys can negotiate pricing with the cloud providers to the point where they may be running at close to cost. It's the small and mid tiers that get hosed with cloud pricing. >You personally need to run the numbers with both scenarios. Depending on your use case, it may be cheaper to be in AWS I'm not sure about that. Certainly cloud infrastructure provides a level of flexibility which may be advantageous if you're going through high rate of growth. Outside of that, I'm not sure you'd see any cost savings.

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vinay_ys 6y ago
In fact it is easier to get bigger discounts if you are a mid-size customer than if you are a big customer. If you are a very big customer, then any discount given to you will directly affect the cloud business bottomline. A public cloud inherently/structurally has more costs because it is built to be truly multi-tenant and has lots of elastic capacity. A single tenant private cloud can cut out a lot of bells and whistles and can be tailored to the needs of the company's private use-case – this brings down the cost significantly. If your compute/storage bill is greater than $10 million per year, then it is highly likely that for the same money you will get much higher compute/storage capacity in a private cloud. And that gives you more headroom for growth/elasticity etc. If your bill is greater than $30 million per year, then you will likely save significantly as well as get other strategic advantages – especially if your infra scale continues to grow over next 2-5 years.

evrydayhustling 6y ago

Here's another way that you're not Dropbox (unless you are): you are not a public company that gets points from investors for removing [$35M] dollars from COGS (cost of goods sold), even if you spend [$40M] on R&D + capitalized expenditures to replace it. Stories like this can be really misleading because large companies almost can't help but trick themselves into financial shenanigans. It's very possible that Dropbox just spent $100M upfront to start saving $35M / year relative to AWS current prices... but discovers in year 3 that they are no longer saving money because AWS has reduced prices via their own R&D, which is spread over a massively larger customer base. Now, because Dropbox is a storage company, it may well make since for them to continue R&D and try to keep pace with AWS, at least for their own needs. But 99% of other companies - of any size - would likely fall on the wrong side of the scenario above.

dswalter 6y ago
Why must Amazon pass off its savings to your org, in this example, rather than taking most of those realized R&D savings to their own investors? Sure, AWS may be constantly innovating on doing things more cheaply and scalably. Sometimes, those savings get passed off to the customer; but not most of it, and not necessarily all that frequently.
- richardwhiuk 6y ago
  Because Google and Microsoft are competing against them.
- HatchedLake721 6y ago
  > ... and not necessarily all that frequently. Did you miss where AWS reduces prices multiple times a year? I don't know the latest figure, but as of 2018, they reduced prices 67 times since launch in 2006.
  - justincormack 6y ago
    There have been 6 price reductions this year https://aws.amazon.com/blogs/aws/category/price-reduction/ https://aws.amazon.com/blogs/aws/category/price-reduction/ you are probably not using any of the services in question. The only S3 price reduction I can find was in 2012 https://aws.amazon.com/blogs/aws/amazon-s3-price-reduction/ https://aws.amazon.com/blogs/aws/amazon-s3-price-reduction/

data_spy 6y ago

Agreed. I work at a company that does 150 Billion transactions a day and it is cheaper being in the cloud than on prem for us. Maybe the variable cost is more but the fixed cost is a lot less for the business.

ryanlol 6y ago
Cloud vs on prem is a ridiculous comparison. The sweet spot is almost always in the middle.

mike_d 6y ago

> ...and it may be cheaper to be co-located. If you are as big as Dropbox, it may be cheaper to build your own data center. Nothing I have seen indicates dropbox "built its own datacenter." It looks like they are in Equinix, CoreSite, and DRT colocation.

ebiester 6y ago
You're right - I misspoke, and that likely makes more sense at their scale. At some point, I am sure they will again run the numbers.