7 ms·

> Google's choice to bump these prices made me realize that they could do the same thing with their compute cloud pricing or other APIs, again with little notic

by stiray 6y ago

> Google's choice to bump these prices made me realize that they could do the same thing with their compute cloud pricing or other APIs, again with little notice. That, in turn, led to the realization that we needed to remove our reliance on Google's entire stack, and quickly, or we'd be in a terrible bargaining position later. Yes. You are right. The whole cloud deal is a try to rule out on premise infrastructure and once it is gone and everyone is dependent on it (due to lost of knowledge, and for cloud providers ideally when hardware vendors are no longer selling hardware to non cloud entities) harvest the dependent businesses left at their mercy and charge dearly (including for all the years before that). It is actually not even a complicated plan but it is staggering how many people are putting cloth over their eyes.

jimkleiber 6y ago
These two comments make me see SaaS more like paying rent for housing: If we become fully dependent on a service (shelter) and then the provider (landlord) jacks up the price, we may be quickly forced to switch services (homes) or be out of business (homeless).
- thesz 6y ago
  Do not forget that in the case of cloud services you have to pay "landlord" for the stuff you move (bandwidth and volume needed to migration).
  - jimkleiber 6y ago
    Ha, good point, perhaps that'd be like paying your landlord for utilities like water or electricity usage, but could also be paying for every time you have guests visit the house or you go up and down the stairs.
- franklampard 6y ago
  I like this analogy. I think a good idea is to sign a long term (1 year to multiple years) contract with cloud providers.
  - jfim 6y ago
    A long term contract pretty much guarantees that the company will lose the institutional knowledge to run things on premises. Think about it, if the company has sysadmins that have been with the company for some years, have racked and are running most of their infrastructure, and all of a sudden they sign a long term contract with a cloud provider, why would they stay?
    - robertlagrant 6y ago
      This is a danger, although the cloud is still just VMs and networks that still need configuring and patching. Agreed people who would run physical hardware would be gone.
    - franklampard 6y ago
      There are different use cases. It’s possible that the company do not have all that infrastructure at all. I also don’t see the importance of ‘knowledge to run things on premise’ for most people. Technologies change very fast and if I can pay a reliable provider with a fixed price for the years that I intend to use it, why do I have to know how to use it? If I can hire a gardener to take care of things for a reasonable price, I don’t care if I have any knowledge.
- bryanrasmussen 6y ago
  unfortunately when we switch services(homes) all of our electrical devices(code) now need to be changed to work with the different way the new service(home) is wired. At this point the analogy breaks down.
  - jimkleiber 6y ago
    Hmm. Maybe it's a spectrum, where some situations are like moving homes and others are like like moving cities (need to find a new dentist, doctor, etc) or moving countries (need to learn a new language, learn new laws, get new electrical outlet adapters, etc). Do you think those resonate better?
    - bryanrasmussen 6y ago
      I think as the size of the application increases and the API you are switching out increases in importance to the functioning of that application then the analogy of moving from home goes up from moving apartments(my small side project), to moving cities (my small side project turned into a startup that has been running half a year but isn't especially profitable yet), to moving countries (my application that many large organizations use with all sorts of different functionality built in to support the needs of those organizations)
      - jimkleiber 6y ago
        Well said. As it becomes more complex and intertwined, technologically and socially (employees, customers, etc), then it becomes harder to change. Thanks for helping to refine the analogy!
- Joeri 6y ago
  In many places landlords cannot suddenly jack up the price, but can only increase it in small amounts year by year. One could similarly imagine rent controls on digital services, where sudden price hikes are simply not allowed, and terminating the rental agreement one-sided is similarly restricted. The practical downsides of that kind of legislation would probably end up quite similar to rent controls.
  - jimkleiber 6y ago
    Yes! I've found that I sometimes will keep a subscription, even if I'm not currently using it, because I've been locked in at the old price, and can feel really annoyed when they increase the price by a significant amount or percentage and force me to adopt it. About rent control, yup, it may have the ups and downs of real estate rent control :-) I'm also wondering, with physical real estate, there is a tangible limit to how many people can rent the space, whereas SaaS seems to make up arbitrary user limits. But maybe I'm wrong, and there is a limited number of users because each user has variable costs—in the housing analogy, utilities like water, space, wear & tear on the place, etc., and in the SaaS space, customer service, server space...I can't think of any more but maybe they're there...
entee 6y ago
I think there's a risk here but I'm not sure it goes as far as you suggest. There are still plenty of entities, particularly larger ones, that buy their own metal because at some scales it becomes far cheaper to run in a COLO (at least acc to near monthly articles posted on HN). I'd therefore put the risk that only big vendors will be able to buy hardware as low. That said, as ARM or custom chips gain market share within cloud providers, there's a risk that x86 or standard suppliers will struggle, but AMD/Intel see this too and surely one or both will adapt. On skills I think there's a small risk of people not knowing how to manage/set up their own racks, but doing a passable job there isn't that hard. On general sys-admin stuff, cloud infrastructure seems to have parallels to hardware infrastructure, so it shouldn't be completely unfamiliar to set up a hardware router/network/linux server. There are definitely skills and details missing (remote admin tools for hardware maybe), but this doesn't seem like a big gap to bridge if $$$ is on the line?
- stiray 6y ago
  If those entities would be any risk, they would already be bought. Or they will be long gone due to google/aws/microsoft price dumping. In meanwhile, the openly accessible technology / know-how will be gone or hired by them and there will be no one left. Just look around, how many people you know that are capable of handling on-premise server? What about farm of servers without using any of google/aws/microsoft technology? This just isn't something new. It is just another case of "historia magistra vitae". We had this, 30-40 years back, we had centralized environment (have you heard about mainframes before?), due to huge price pumping the decentralized environment came in (personal computers, internet, on premise servers, storage, ...). IT needed almost 20 years to get out of the hooks of corporations and now we are all diving in into the latest "cool" thing - centralization, now backed up by advertising revenues and shady practices like not showing your company on google search. This is not a joke: https://en.wikipedia.org/wiki/Google_litigation https://en.wikipedia.org/wiki/Google_litigation And you can bet the history repeats itself. --- Let me show you my point and where it is going, lets do a tiny experiment - use your router/firewall/whatever you are fond of and block the following ASNs: AS40873,AS396982,AS395973,AS394639,AS394507,AS36492,AS36385,AS36384,AS36040,AS36039, AS26910,AS26684,AS22859,AS22577,AS19527,AS16550,AS15169,AS13949,AS6432, AS19448,AS16591,AS45566,AS43515,AS41264,AS394699,AS36987,AS139190,AS139070 then: AS16509,AS14618,AS7224,AS19047,AS395343,AS62785,AS58588,AS9059,AS8987,AS39111,AS38895,AS10124,AS264167,AS17493,AS135630 and: AS8075,AS8074,AS8073,AS8072,AS8071,AS8070,AS8069,AS8068,AS6584,AS63314,AS6291,AS6194, AS6182,AS5761,AS45139,AS40066,AS397996,AS397466,AS396463,AS395851,AS395524, AS395496,AS36006,AS3598,AS32476,AS31792,AS30575,AS30135,AS26222,AS25796,AS23468, AS22692,AS20046,AS17345,AS14719,AS13811,AS13399,AS12076,AS35106,AS8812,AS200517, AS58862,AS59067,AS52985 Now try to surf the internet. Casual style. As nothing happened. Baidu (China) and Yandex (Russia) will still work from search engines. Duckduckgo not (shame on you). As any other you know. "The internet" as you know it will stop to exist for you. You know what you have blocked with those ASNs? Only 3 companies. Google. Amazon. Microsoft. For complete experience you can also throw in AS714,AS6185,AS2709 and AS63293,AS54115,AS32934 (Apple, Facebook), but those two are not really relevant. Maybe this will be eye opening how much we have f* up the internet, something that should survive 3rd world war is now mostly in the hands of 3 companies. Now imagine they pull the switch. Oh yeah, that bad it is.
rorykoehler 6y ago
If that happens I know of a few young companies who will step in and fill the void at a cheaper price.
- deleted 6y ago
  [deleted]
baskire 6y ago
That’s one of the arguments for multi vendor sourcing. The same price negotiation tactic occurs in other industries. It’s why google buys non intel chips. Come negotiation time there’s a serious threat they can leave. And there’s a serious rfp out to other vendors for pricing. Bringing their intel chip costs down.
tybit 6y ago
AWS is already incredibly profitable while continuing to lower prices over time. What makes you think they would choose to run this scheme and forever ruin their reputation?
- multjoy 6y ago
  The point is that nobody expected Google to just hike their price for mapping by 1400% overnight. If they can do it with one product, what’s stopping anyone else in a similar dominant market position doing the same?
  - danielheath 6y ago
    Culture, and the reputation it earns. I’m no amazon apologist, but one thing I trust them to do is keep my things running as they are.
    - multjoy 6y ago
      And what’s your contingency if they decide that they’re going to hike the price because Jeff’s underwater lair has sprung a leak?
      - regularfry 6y ago
        This got downvoted for (I presume) triteness, but there's an important underlying point: Amazon's actions (or anyone else's) don't have to look rational from the outside to really mess up your day.
      - katbyte 6y ago
        I’d actually worry more about post bezos Amazon, he’s been running the show for years, it’s predictable- after..
    - panta 6y ago
      In a world where there are three players, culture and reputation are not worth much, if not only at the beginning. Maybe 5/10/15 years from now the software and competencies to manage bare metal will be only behind the doors of those three companies, and at that point it will be economically convenient for them to act as a cartel and increase prices.
mjgs 6y ago
I wonder whether there will emerge some design patterns in apps to enable easy switching between on-premises and cloud infra. Thinking about it logically, the safest approach is always going to be build for on-premises infra first (or standard VPSs), then modify the code to support cloud services in addition, to get the added benefits of scaling at cheaper costs. That way you can always switch back to on-premises if the cloud provider starts behaving terribly. Perhaps there is a performance hit, but at least you have an option. Worth mentioning that there are some use cases that are only possible using cloud infra due to scaling constraints. This is the approach I took building my SaaS. It’s more difficult initially, but I had an infra that could easily be moved. I was using my own version of backend queues etc, so modifying the code to switch to Amazon SQS would theoretically have been possible: https://blog.markjgsmith.com/2020/11/26/looking-back-at-linkblogdotio.html https://blog.markjgsmith.com/2020/11/26/looking-back-at-link...
TeMPOraL 6y ago
> It is actually not even a complicated plan but it is staggering how many people are putting cloth over their eyes. These are changes that are happening on a timescale much larger than the average lifespan of a cloud-based product/system. I think people building things in the cloud know it, or at least feel it, and so just don't care about long-term - because in the long term they expect to be rich and/or doing something else. In the meantime, ooh cheap compute, billable as opex - let's build everything on it!

by stiray 6y ago

jimkleiber 6y ago

These two comments make me see SaaS more like paying rent for housing: If we become fully dependent on a service (shelter) and then the provider (landlord) jacks up the price, we may be quickly forced to switch services (homes) or be out of business (homeless).

thesz 6y ago
Do not forget that in the case of cloud services you have to pay "landlord" for the stuff you move (bandwidth and volume needed to migration).
- jimkleiber 6y ago
  Ha, good point, perhaps that'd be like paying your landlord for utilities like water or electricity usage, but could also be paying for every time you have guests visit the house or you go up and down the stairs.
franklampard 6y ago
I like this analogy. I think a good idea is to sign a long term (1 year to multiple years) contract with cloud providers.
- jfim 6y ago
  A long term contract pretty much guarantees that the company will lose the institutional knowledge to run things on premises. Think about it, if the company has sysadmins that have been with the company for some years, have racked and are running most of their infrastructure, and all of a sudden they sign a long term contract with a cloud provider, why would they stay?
  - robertlagrant 6y ago
    This is a danger, although the cloud is still just VMs and networks that still need configuring and patching. Agreed people who would run physical hardware would be gone.
  - franklampard 6y ago
    There are different use cases. It’s possible that the company do not have all that infrastructure at all. I also don’t see the importance of ‘knowledge to run things on premise’ for most people. Technologies change very fast and if I can pay a reliable provider with a fixed price for the years that I intend to use it, why do I have to know how to use it? If I can hire a gardener to take care of things for a reasonable price, I don’t care if I have any knowledge.
bryanrasmussen 6y ago
unfortunately when we switch services(homes) all of our electrical devices(code) now need to be changed to work with the different way the new service(home) is wired. At this point the analogy breaks down.
- jimkleiber 6y ago
  Hmm. Maybe it's a spectrum, where some situations are like moving homes and others are like like moving cities (need to find a new dentist, doctor, etc) or moving countries (need to learn a new language, learn new laws, get new electrical outlet adapters, etc). Do you think those resonate better?
  - bryanrasmussen 6y ago
    I think as the size of the application increases and the API you are switching out increases in importance to the functioning of that application then the analogy of moving from home goes up from moving apartments(my small side project), to moving cities (my small side project turned into a startup that has been running half a year but isn't especially profitable yet), to moving countries (my application that many large organizations use with all sorts of different functionality built in to support the needs of those organizations)
    - jimkleiber 6y ago
      Well said. As it becomes more complex and intertwined, technologically and socially (employees, customers, etc), then it becomes harder to change. Thanks for helping to refine the analogy!
Joeri 6y ago
In many places landlords cannot suddenly jack up the price, but can only increase it in small amounts year by year. One could similarly imagine rent controls on digital services, where sudden price hikes are simply not allowed, and terminating the rental agreement one-sided is similarly restricted. The practical downsides of that kind of legislation would probably end up quite similar to rent controls.
- jimkleiber 6y ago
  Yes! I've found that I sometimes will keep a subscription, even if I'm not currently using it, because I've been locked in at the old price, and can feel really annoyed when they increase the price by a significant amount or percentage and force me to adopt it. About rent control, yup, it may have the ups and downs of real estate rent control :-) I'm also wondering, with physical real estate, there is a tangible limit to how many people can rent the space, whereas SaaS seems to make up arbitrary user limits. But maybe I'm wrong, and there is a limited number of users because each user has variable costs—in the housing analogy, utilities like water, space, wear & tear on the place, etc., and in the SaaS space, customer service, server space...I can't think of any more but maybe they're there...

entee 6y ago

I think there's a risk here but I'm not sure it goes as far as you suggest. There are still plenty of entities, particularly larger ones, that buy their own metal because at some scales it becomes far cheaper to run in a COLO (at least acc to near monthly articles posted on HN). I'd therefore put the risk that only big vendors will be able to buy hardware as low. That said, as ARM or custom chips gain market share within cloud providers, there's a risk that x86 or standard suppliers will struggle, but AMD/Intel see this too and surely one or both will adapt. On skills I think there's a small risk of people not knowing how to manage/set up their own racks, but doing a passable job there isn't that hard. On general sys-admin stuff, cloud infrastructure seems to have parallels to hardware infrastructure, so it shouldn't be completely unfamiliar to set up a hardware router/network/linux server. There are definitely skills and details missing (remote admin tools for hardware maybe), but this doesn't seem like a big gap to bridge if $$$ is on the line?

stiray 6y ago
If those entities would be any risk, they would already be bought. Or they will be long gone due to google/aws/microsoft price dumping. In meanwhile, the openly accessible technology / know-how will be gone or hired by them and there will be no one left. Just look around, how many people you know that are capable of handling on-premise server? What about farm of servers without using any of google/aws/microsoft technology? This just isn't something new. It is just another case of "historia magistra vitae". We had this, 30-40 years back, we had centralized environment (have you heard about mainframes before?), due to huge price pumping the decentralized environment came in (personal computers, internet, on premise servers, storage, ...). IT needed almost 20 years to get out of the hooks of corporations and now we are all diving in into the latest "cool" thing - centralization, now backed up by advertising revenues and shady practices like not showing your company on google search. This is not a joke: https://en.wikipedia.org/wiki/Google_litigation https://en.wikipedia.org/wiki/Google_litigation And you can bet the history repeats itself. --- Let me show you my point and where it is going, lets do a tiny experiment - use your router/firewall/whatever you are fond of and block the following ASNs: AS40873,AS396982,AS395973,AS394639,AS394507,AS36492,AS36385,AS36384,AS36040,AS36039, AS26910,AS26684,AS22859,AS22577,AS19527,AS16550,AS15169,AS13949,AS6432, AS19448,AS16591,AS45566,AS43515,AS41264,AS394699,AS36987,AS139190,AS139070 then: AS16509,AS14618,AS7224,AS19047,AS395343,AS62785,AS58588,AS9059,AS8987,AS39111,AS38895,AS10124,AS264167,AS17493,AS135630 and: AS8075,AS8074,AS8073,AS8072,AS8071,AS8070,AS8069,AS8068,AS6584,AS63314,AS6291,AS6194, AS6182,AS5761,AS45139,AS40066,AS397996,AS397466,AS396463,AS395851,AS395524, AS395496,AS36006,AS3598,AS32476,AS31792,AS30575,AS30135,AS26222,AS25796,AS23468, AS22692,AS20046,AS17345,AS14719,AS13811,AS13399,AS12076,AS35106,AS8812,AS200517, AS58862,AS59067,AS52985 Now try to surf the internet. Casual style. As nothing happened. Baidu (China) and Yandex (Russia) will still work from search engines. Duckduckgo not (shame on you). As any other you know. "The internet" as you know it will stop to exist for you. You know what you have blocked with those ASNs? Only 3 companies. Google. Amazon. Microsoft. For complete experience you can also throw in AS714,AS6185,AS2709 and AS63293,AS54115,AS32934 (Apple, Facebook), but those two are not really relevant. Maybe this will be eye opening how much we have f* up the internet, something that should survive 3rd world war is now mostly in the hands of 3 companies. Now imagine they pull the switch. Oh yeah, that bad it is.

rorykoehler 6y ago

If that happens I know of a few young companies who will step in and fill the void at a cheaper price.

deleted 6y ago
[deleted]

baskire 6y ago

That’s one of the arguments for multi vendor sourcing. The same price negotiation tactic occurs in other industries. It’s why google buys non intel chips. Come negotiation time there’s a serious threat they can leave. And there’s a serious rfp out to other vendors for pricing. Bringing their intel chip costs down.

tybit 6y ago

AWS is already incredibly profitable while continuing to lower prices over time. What makes you think they would choose to run this scheme and forever ruin their reputation?

multjoy 6y ago
The point is that nobody expected Google to just hike their price for mapping by 1400% overnight. If they can do it with one product, what’s stopping anyone else in a similar dominant market position doing the same?
- danielheath 6y ago
  Culture, and the reputation it earns. I’m no amazon apologist, but one thing I trust them to do is keep my things running as they are.
  - multjoy 6y ago
    And what’s your contingency if they decide that they’re going to hike the price because Jeff’s underwater lair has sprung a leak?
    - regularfry 6y ago
      This got downvoted for (I presume) triteness, but there's an important underlying point: Amazon's actions (or anyone else's) don't have to look rational from the outside to really mess up your day.
    - katbyte 6y ago
      I’d actually worry more about post bezos Amazon, he’s been running the show for years, it’s predictable- after..
  - panta 6y ago
    In a world where there are three players, culture and reputation are not worth much, if not only at the beginning. Maybe 5/10/15 years from now the software and competencies to manage bare metal will be only behind the doors of those three companies, and at that point it will be economically convenient for them to act as a cartel and increase prices.

mjgs 6y ago

I wonder whether there will emerge some design patterns in apps to enable easy switching between on-premises and cloud infra. Thinking about it logically, the safest approach is always going to be build for on-premises infra first (or standard VPSs), then modify the code to support cloud services in addition, to get the added benefits of scaling at cheaper costs. That way you can always switch back to on-premises if the cloud provider starts behaving terribly. Perhaps there is a performance hit, but at least you have an option. Worth mentioning that there are some use cases that are only possible using cloud infra due to scaling constraints. This is the approach I took building my SaaS. It’s more difficult initially, but I had an infra that could easily be moved. I was using my own version of backend queues etc, so modifying the code to switch to Amazon SQS would theoretically have been possible: https://blog.markjgsmith.com/2020/11/26/looking-back-at-linkblogdotio.html https://blog.markjgsmith.com/2020/11/26/looking-back-at-link...

TeMPOraL 6y ago

> It is actually not even a complicated plan but it is staggering how many people are putting cloth over their eyes. These are changes that are happening on a timescale much larger than the average lifespan of a cloud-based product/system. I think people building things in the cloud know it, or at least feel it, and so just don't care about long-term - because in the long term they expect to be rich and/or doing something else. In the meantime, ooh cheap compute, billable as opex - let's build everything on it!