13 ms·

The Impending Cloud Reshuffle

205 points by pierremenard 5y ago

dusted 5y ago
"Let's say a customer is spending $1M/year on Redshift. That nets AWS about6 $500-700k in gross profits..." Can AWS seriously buy and operate infrastructure for half the price than anyone else ? I can't imagine that being cheaper than running the datacenter yourself.
- mvanbaak 5y ago
  Yes. They simply call city/state/country X, and tell them: Yo, we are going to build a datacenter farm here for AWS. You are not going to tax us, provide half the funds, and we will try to source the workforce in your region mkay? And that is how their datacenter is almost gratis, and ours costs millions. Once you are at the AWS scale, things are differen.
theamk 5y ago
In the bigger companies, the effort of bringing in new vendor is substantial. There are contracts that need to be approved by legal, security assessments from IT, billing arrangements from finance, user database integration, and so on. If the company already using AWS, then any product offered by AWS has a huge advantage. I am sure that even if independent services are more loved by programmers, there will still be substantial amount of companies using AWS versions. And since the bigger companies would prefer them, I would not be surprised to know that AWS earns more money from them than startups do.
- ineedasername 5y ago
  Definitely this: If I had to guess, Snowflake gets a lot more customers from organizations with pre-existing balkanized data silos that need to be fixed than from Redshift churn. Just a guess though.
wmf 5y ago
This seems like a mix of wishful thinking and extrapolating from a single outlier (Snowflake).
- ineedasername 5y ago
  I agree there's too much emphasis on Snowflake, but I think the article still makes a good point, which I interpreted as something like this: 1) Cloud provider core competency is basically IaaS 2) Some level of SaaS was baked in to attract or lock-in customers, but isn't really a core competency 3) This leaves room for faster more agile startups to come in and build best of breed SaaS solutions on top of the IaaS, including those areas where cloud providers already have their own solutions. I don't see a tipping point on the horizon to warrant language like "impending reshuffle", but I think it's an interesting trend to keep tabs on.
darkerside 5y ago
Not to detract from the point, but I don't think you can take revenue numbers from RedShift to Snowflake like that. We made that move and ended up with 20x the monthly cost (after budgeting for 10x). Seems like AWS is still making their money on the underlying layer in our case.
- 1cvmask 5y ago
  Did you spend more than 20x more on Snowflake? Where there any benefits to justify that massive increased cost?
klodolph 5y ago
Ahhh... maybe. > There's some sort of folk wisdom that the lowest layer of cloud services is a pure commodity service. > Cloud vendors might be pretty happy making money just in the lowest layer. Margins aren't so bad and vendor lock-in is still pretty high. It may be folk wisdom, but big customers look at stuff like storage and CPU pricing when picking a vendor, because they need lots of storage and CPU. These services, in turn, are priced close to the actual cost of the underlying storage and CPU because of the high volume of storage and CPU involved. I have worked at cloud vendors. Margins aren't great. Cloud vendors are always asking questions like, "How does vendor X sell this for so cheap? We can't make a profit at that price! How can we make our costs for X lower?" The lock-in is seen as a way to sell the higher-level services. However, the high-level services, the stuff that start-ups compete with, also face competition with open-source projects. Things that used to be SaaS are now DIY with open-source projects running on IaaS. Ten years ago you had no Kubernetes, and you didn't have columnar storage out of the box on PostgreSQL. Cassandra was immature. Nowadays, open-source software running on IaaS has killed the need for bigger segments of the SaaS market, assuming you have enough expertise in-house to run it.
- pierremenard 5y ago
  > assuming you have enough expertise in-house to run it. Most small to mid-sized companies would almost always opt to pay a bit more for a managed offering and not have to bring in expertise in-house for things that are not their core competency.
  - klodolph 5y ago
    For a small company, that's sensible. For a mid-size company, I think it's short-sighted. I'd argue that mid-size tech companies need the expertise that comes with running more of their own stack. If you don't have the expertise, then you're going to be dealing more with support engineers to solve your problems, and you won't have as much insight into your tech stack as you'd want. There's a big difference between the experience of opening a support ticket to fix a problem with your database and paging one of your salaried engineers to fix it--someone who actually runs the service to begin with.
mr_toad 5y ago
> What happened? Marketing. Everyone has heard of Snowflake. And not just IT people. Finance, marketing, I’m sure even the cleaners have heard how wonderful it is. Redshift on the other hand is something that a lot of IT people and even some data warehousing people seem unaware of. There are many people who seem to think that Snowflake is the only option.
- macintux 5y ago
  Maybe, but I've not heard of either.
- pid-1 5y ago
  Snowflake legit has some features Redshift doesn't, the killer one IMO being auto scaling for computing resources. That is really awesome for infrequent workloads. Last week AWS uncovered Redshift Serverless, but still on technical preview. Another point, Snowflake is just easier to use. I've seen young developers who knew a bit of database stuff setup and play with it with little help. Redshift on the other hand is much more entrenched in the whole AWS mess and requires one to understand shit like VPCs, security groups, IAM, cloud watch, etc....
thinkingkong 5y ago
There are a few factors involved but the biggest ones we aren't discussing are demographic shifts and fashion. We've got an entire new generation of developers entering into the marketplace that have no idea what life was like _before_ cloud computing was a thing, and their priorities are different than simply avoiding some capex and some graybeard sysadmins. In terms of strategy, AWS is completely and totally unapologetic about copying companies built on top of their platform if it helps them in the future. The author suggest that there haven't been this many companies aimed at the vendors before but that's a lack of insight into the history of how they came about in the first place. When AWS was first launched there were dozens and dozens of vendors competing with, building on top of, and partnering with cloud vendors. Almost none of them exist today. Snowflake is an incredible exception but not a rule. The reason they succeeded (and the reason I personally believe fly will succeed) is because they're building hard to implement underlying technology and focusing on DX. That's basically it. If you're going to compete on economics you're absolutely hooped.
- dustintrex 5y ago
  "fly"?
  - arpa 5y ago
    probably fly.io
- mellavora 5y ago
  Don't forget that Snowflake (implicitly) supports a paradigm where all of your data ends up locked into AWS. It would just cost too much to move it elsewhere. Note the (current) top post on this article: > hodgesrm 4 hours ago | next [–] > I'm at AWS re:Invent this week and ... Two themes really stand out in the keynotes and associated presentations: > 1.) Becoming a home for data and ML services backed by hardware technologies like Graviton, Trainium, and stupid fast network connectivity. Amazon has dozens of value-added services from S3 to analytic databases. So if Snowflake is helping AWS succeed in AWS goal 1 ("home for data"), I think AWS is smart enough to help Snowflake grow and prosper.
falaki 5y ago
There is some truth to this argument: https://sigops.org/s/conferences/hotos/2021/papers/hotos21-s02-stoica.pdf https://sigops.org/s/conferences/hotos/2021/papers/hotos21-s...
dustintrex 5y ago
This might happen, but Cloud vendors will fight tooth and nail to stop it from happening, because the lower layers are commodities and a race to the bottom pricewise. Also, many companies want a single neck to wring if anything goes wrong, and are thus unwilling to deal with a patchwork of third-party vendors. That said, telcos used to mint money from overseas calls, SMS, ringtones etc, until the Internet came along and everything went "over the top" (over data and thus outside operator billing). They didn't take that lying down, either (IIRC Skype was still banned in the UAE until COVID finally whacked some sense into them), but in the end telcos were still reduced to dumb pipes they are today.
- raffraffraff 5y ago
  The "single neck to wring" doesn't really exist unless you're a Salesforce / Atlassian / ServiceNow sized customer. Below a certain size, good luck getting support from AWS beyond "read the docs". The thing is, most of the time your outages are because you screwed up. "Shared responsibility" means that unless AWS actually loses a whole region for the day, or S3 actually loses your data forever, it is still "your fault". Because you didn't balance across AZs, take backups, test backup recovery, understand point-in-time recovery or egress charges etc. As the article says, CTOs don't change cloud providers. I've been on the hook for DR exercises where the same stack is running on the same cloud and they've failed because engineers make crazy number of invisible hard-coded design choices. Once you build your product on AWS, you're pretty much stuck there. K8s offers kinda-of an escape hatch, because it's possible to build your SaaS on EKS in such a way that it could be migrated to AKS or GKE, but it's still a ton of work for the plumbers. So the reason that AWS has this proliferation of ready-made services (and there are tons of them - try sitting an AWS professional certification) is that you'll generally use them in favour of deploying your own FOSS thing (even if it's "just a helm chart away"). Because running a database cluster (for example) is never as simple as just deploying it. Once your engineers decide to use Cognito, Lambda, Kinesis, Aurora instead of doing a DIY, you're locked in. Hell, it would even cost a fortune to simply download the data to close your account (because AWS Snowball doesn't have an egress option where they'll drive a few PB of your data to your data center in a semi-truck)
- pid-1 5y ago
runako 5y ago
This analysis ignores the reality that most teams do not want to spend time optimizing each component in their stacks. As a CTO/CIO, you have to pick your battles, and the "more future vendors" box in the stack made my hair stand on end. Nobody wants their vendor stack to keep growing! I need a managed PostgreSQL database; my needs would have to be relatively exotic for e.g. RDS to not be a good solve. AWS has deployment options for the big stacks. Tools like Vercel do not yet address the solid majority of Web developers who primarily write code for .NET or Java, and thus are not even in the conversation at most organizations (and nobody really wants 2+ PaaS vendors). This is not to say the point solution vendors will not be able to build solid businesses. MongoDB is doing well alongside platform solutions like DynamoDB. But the gravity is clearly with the platforms, and nothing Mongo can do (short of becoming a hyperscaler cloud provider with lots of offerings) will change that. Snowflake is a special snowflake; it's entirely possible that the lessons of Snowflake apply only to Snowflake.
- Toine 5y ago
  I think most of us, senior included, SEVERELY underestimate the cost of having a deeply fragmented stack. I believe having 1 or 2 max vendors, providing most of your services, is immensely beneficial in the long run, for many reasons. cf http://boringtechnology.club http://boringtechnology.club
hodgesrm 5y ago
> What if cloud vendors focus on the lowest layer, and other (pure software) vendors on the layer above? I'm at AWS re:Invent this week and I can tell you this absolutely not what Amazon is doing. Two themes really stand out in the keynotes and associated presentations: 1.) Becoming a home for data and ML services backed by hardware technologies like Graviton, Trainium, and stupid fast network connectivity. Amazon has dozens of value-added services from S3 to analytic databases. By my count they have at least 16 managed data services. 2.) Extend Amazon cloud wherever possible into non-cloud environments. Specifically: push to on-prem through technologies like AWS Outposts and Container Marketplace Anywhere as well as integrate with IoT. #2 looks like a pump fake to defuse customer lock-in concerns. The real play is #1, which is to become the preferred home for data, taking the maximum possible share of revenue in the market. Taken as a whole, Amazon has the best data story of any company I know of.
- WaxProlix 5y ago
  I worked at AWS Systems Manager, which has a hybrid on-prem solution that lets you integrate non-aws resources into the IAM/HOSM world (sometimes just called Managed Instances). There was a bit of pushback internally around what kind of play we were allowed to make in the on-prem/hybrid space, and eventually the product just got KTLO'd. Kind of a shame, it was neat.
  - noduerme 5y ago
    This seems prophetic. I'd be really curious what you could do with that kind of "Managed Instance" and why it was killed.
    - WaxProlix 5y ago
      It wasn't killed, the feature just never got the kind of marketing and traction that we felt it could/should have. IAM went off and built their own blessed version later, I think.
- simonh 5y ago
  I don't think the contention is that they will give up on these services, or publicly acknowledge that this is happening. A lot of AWS customers will be very happy with the native vendor services, it's just that the premium and corporate end of the market will go with more sophisticated ISV services. Also this is a forward looking prediction, it's happening in certain segments now, and will become prevalent in other segments over time. That's the claim anyway. Take Elasticsearch for example, AWS is offering a clone service, but if you want the best Elasticsearch experience on the latest code base maybe you're better off using Elastic's own Elastic Cloud service that's also within AWS. If things play out as Erik predicts (and Elastic doesn't screw up) they should do just fine. We'll see if that's how it plays out.
ocdtrekkie 5y ago
I think this guy is very optimistic on cloud if he thinks in ten years people will still view it as the right way to go. A bunch of monopolies are using various levers to push companies to shift to a model with uncapped spending (literally), with a huge extra profit margin. Cloud has benefits for two narrow segments of business: Rapidly scaling new companies and extremely globalized companies, and makes basically no sense for anyone else. As regulations catch up, national borders continue to impact how businesses operate across networks, etc., I doubt the cloud model will still look good in ten years. Half the benefit of the cloud is just being... newer. Interfaces are often more modern simply because, well, the Windows Server team all started working on Azure instead. A decade from now, people will look at the pains and problems of working with AWS and Azure the way people look at dealing with Windows Server and hardware maintenance today: Looking a little rough.
benjaminwootton 5y ago
This is the polar opposite of what is happening in cloud. All vendors are moving up the stack, with the eventual endpoint being even business productivity apps aligned with Azure, GCP, AWS. They all see IAAS as the commodity end with less value add and lock-in. This is undeniable through actions and PR statements and has been the observed direction of travel for a decade at least.
0fuchs 5y ago
I’m waiting for graphics cards to be accessible again so we can do ML generative art, music, and multimedia at home and implode the cloud for anything but storage and recovery of algorithmic libraries that regenerate seeds. Sorry/not sorry but I’m sick of this bizarre startup fetish for syntax art and finance as usual. The algorithms are public domain. It’s still feudal property ownership. We call caste cohort now, having conjured another abstraction to confuse the rubes. We send kids to college to define statistical objects of unknowable information network effects in many contexts to keep them busy. We’ll probably just morph to supporting the logistics network in the abstract. I can see teens and 20-something basically nationalizing that approach once enough old people die. It’ll all be boxed up behind tidy APIs
samwillis 5y ago
I always assumed AWS had the same model as the Amazon store, if they see something gaining in popularity on their platform (or off it), copy it and do it themselves. It’s inevitable that things like Vercel, Netlify, Fly, and Render are copied by Amazon. It’s what they do, they want the full stack top to bottom fully integrated. The thing they will never compete in though is developer UX, that’s where the smaller vendors (like those mentioned above) will always shine. AWS is now about 100x to big to have a good developer UX, there is just to much there. The company that is really shaking things up is CloudFlare, they don’t seem to be afraid of playing with the business model to undercut AWS.
- crate_barre 5y ago
  Their big money comes from enterprise. Enterprise does not care about developer quality of life.
  - samwillis 5y ago
    Exactly, and it shows in how overly complex the whole system has become.
justicezyx 5y ago
The article has a eye-grabbing title that is quite larger than what's covered in the content, which has become a norm nowadays. My read: the article builds on 1 core thesis --- the big 3 are moving into infrastructure focused vendors, and more and more software layers, when moved to Cloud, will be owned by vertical aligned vendors with gradually refined market focuses (data warehouse, streaming/messaging, app hosting, etc.; and the pattern repeats itself along even higher levels). I cannot say I have enough data to agree or disagree with the prediction. Mostly, the Cloud is still very early in its development. The Cloud today only changes how the underlying business model works in provisioning computing. I.e., people now by default goes to Cloud for machines. That's a generational transition from the old DC/on-prem model. But on top of this new model, the software only start to gain some properties that are distant from the old model fundamentally. Lambda is one such example. Docker/Kubernetes, as the article points out, is actually very incremental development over the old models (thinking about Vsphere puppet scripts etc.). My sentiment is that fundamental shift like Cloud, only manifest itself after it gives birth to fundamental shift in how applications are developed and run. There are a lot of relatively new trends in this area, but none of them give me the impression of a killer paradigm. I am looking for something like PC + windows, Internet + Google, Cloud + ? type of thing. Let's see in 10 years.
hardwaresofton 5y ago
This theory and the conclusion on what the landscape will look like is spot on -- it's so spot on it's already obvious. In fact, it doesn't go far enough. People are overlooking another angle -- the evaporation of the moat around the larger providers in terms of infrastructure they provide. Every year it gets easier and easier to run core AWS offerings (ex. S3 or EC2-like services) as long as you don't need 5 9s of availability (I'd argue most businesses actually don't need that and don't have it even if the underlying infra does). Smaller players can run that infra at much smaller scale than AWS with higher relative margins. Software is easier to administer these days (don't say buzzwords like "cloud native" never did anything for you), and the startling thing is that the larger clouds still have a near monopoly on robustness/service choice. Of course I'm lying a bit here -- OVH has managed databases, and there are Managed Service Providers (MSPs) that run in places that are not the major clouds but the point here is that fundamentally technological leverage and hardware prices are actually chipping away at the moats of the large clouds every day. Larger clouds have to move up the value chain, and that is exactly where smaller companies can have an advantage (not in pricing, but in quality). Hetzner has just opened it's first US data center in Ashburn, Virginia -- and IMO was worth using when it was only in Germany. Time to interactive is really important, but almost no one worries about this when it comes to dealing with backends. Deploying your frontend to cloudfront/vercel/any other CDN and leaving your relatively simple backend (what you might use for a simple three tier ruby/django app) is extremely cost effective but requires know-how. Hetzner starting operations in the US is going to introduce new competition in the lower layers of this vertical, and there's absolutely no reason that the Managed Service Providers (MSPs) can't take advantage of this and grow their customer base. I'm trying to start making the know-how portable -- building a cloud that runs on many providers (starting with Hetzner) and I'm calling it Nimbus Web Services[0] with a launch early next year. [0]: https://nimbusws.com https://nimbusws.com
torginus 5y ago
I generally never understood the appeal of the cloud, and the particular way the 3 big vendors sold proprietary services as a means of vendor lock-in. I mean, I understand the appeal to them, seeing how they made ungodly amounts of money doing it, and given the choice you never want to be in a commodity market, but as user/developers, the value proposition has always been unclear to me. - The term 'containerization' implies in theory (and somewhat in practice) that you package your software in such a way, that it can run on commodity hardware with enough resources. - The huge success of open source means that for any given problem domain (KV stores, SQL, Web Server,LB, caches etc.). There exists a best-in-class solution that's free as in speech. In fact, cloud providers' solutions use these libraries as well. - The development of languages that combine productivity and performance (Go/Java etc.) and with Moore's law enabling ridiculous core counts/RAM sizes etc. means that there's less of an incentive to run a server farm when you can easily fit 128 peak-performance cores under your desk. Stackoverflow did this/has been doing this model with quite some success.
- edem 5y ago
  To me the ease of use is key. I don't want to deal with outages, hardware failures, networking issues, etc. I only want to focus on the software. That's why I don't understand why would anybody (apart from some special cases) would run their own servers.
  - darkwater 5y ago
    You will still have to deal with outages (even if probably at a much lower rate). Just today I got a confirmation from AWS that the 1h outage that our production, multi-AZ RDS database suffered *three months ago* was due to an underlying failure in their storage subsystem. I didn't have to fix any SAN or fiber issue, true, but I lost hours puzzling and debugging things to understand why it failed, with no good answer (until today).
    - edem 5y ago
      Let's be honest. It is much different than having to sit in the car in the middle of the night to change a hard drive in the server that just failed because of a power surge.
planetjones 5y ago
Not sure about this. Take Microsoft for example. Databricks runs on Azure, but they are investing heavily on Synapse workspaces so they own both the underlying infrastructure and the application stack on top. I think the cloud providers have incredible amounts of engineering resources. Their aim is to do anything to get everyone onto the platforms. I don’t see any clear trend coming out in the years ahead. There will be a myriad of solutions (some wholly owned by the cloud provider and some with a third party like snowflake or databricks involved) and customers can choose what works for them.
TruthWillHurt 5y ago
I disagree. The profit margin/markup cloud providers make increases the higher you climb the abstraction layer. 1GB of RAM is 10X more expensive in Lambda than in EC2, but costs AWS the same to provide. Second - services offered are a key selling point and driver of competition between clouds. they all want more features. Third - considering point 1 & 2, clouds prefer to offer their own versions of things. i.e AWS and the Elasticsearch fork.
paulsutter 5y ago
Obviously the cloud vendors will try hard to foist lock-in on customers, and savvy customers should be trying hard to avoid those proprietary high level services But what percentage of cloud programmers are wise to this? The individual programmers make the decisions that cause lock in Cloud vendors know how locked in you are when you negotiate discounts, but by that time the key decisions are long past
- simonh 5y ago
  Erik's contention is that the second part after the 'and' isn't obvious at all. There's no point avoiding lock in because you're locked in anyway. You might as well just use the features and services that best suit your needs, because that way you'll make best use of your developer time and resources. I think he's right, the costs of any migration to a new cloud service are so high that it's pointless making gestures pretending you're preparing for it.
  - paulsutter 5y ago
    There are huge discounts available. You don’t get them by moving, you get them because you’re not locked in
    - simonh 5y ago
      Every now and then you need to stand up a completely new system, or replace an existing system. At those times you get to pick what platform you will build it on, and Amazon wants you to pick AWS. Therefore AWS needs to be competitive. In the vast majority of cases that decision really isn't going to be influenced by whether your existing system on AWS does or doesn't use Amazon specific tech. If you're "moving" your service from AWS to Azure those kinds of implementation details just don't matter, in most cases you're effectively going to build a replacement system and not really migrate an existing one. The costs of such a migration would in most cases dwarf any possible savings, no matter how carefully you tried to avoid lock-in. I'm obviously generalising a fair bit, but the exceptions are likely to be less complex systems that are perfectly fine using fairly generic services.
loosescrews 5y ago
I think one thing that articles like this miss is that not all cloud services run, themselves, in VMs. For example, most of Google's don't. While virtualization has improved a lot, it wouldn't be possible to replicate many of Google's cloud offerings with competitive performance and cost on Google's Compute Engine. Cloud Storage, BigQuery, serverless (Cloud Run, App Engine, Cloud Functions), Spanner, Bigtable, and Firestore all come to mind. One big challenge for cloud workloads is multi-tenancy. If you want to run arbitrary untrusted code on the cloud, your only option is something like gVisor (which isn't exactly a compromise-free solution). Nested virtualization is not secure and will likely even preform worse.
- markgavalda 5y ago
  I agree, however I really like what https://firecracker-microvm.github.io/ https://firecracker-microvm.github.io/ is doing to change the above.
  - loosescrews 5y ago
    Can you elaborate on how Firecracker is changing the situation? My claim is that it isn't possible to build services on top of GCE/EC2 that compete with 1st party cloud offerings in important ways. The problems with nested virtualization are mostly in silicon and to some extent in kvm. Firecracker doesn't really have much to do with it as the VMM isn't the problem. You could use Firecracker to build your own GCE/EC2 competitor on bare metal, but that solves a different problem.
    - cthalupa 5y ago
      You can get bare metal instances without a hypervisor on EC2
rambambram 5y ago
> There's never been this many companies going after services that traditionally belonged to the cloud vendors Interesting article. The words 'traditional' and 'cloud' in one sentence... I can't stand that. The cloud is just marketing speak for the internet. Make it vague on purpose so you can sell the same sh!t in another package to more people. And grab all the data in the meantime. HN is smarter than this, right!?
starfallg 5y ago
His whole argument more or less hinges on the fact that the 3 services he picked only had AWS, GCP and Azure as options, and hence the big 3 are content to defend their market position. But that's not a done deal as things can change on a dime and the cloud vendors are being vigilant. Their 50-60% margin will be spent on developing more lock-in. On one side you have Cloudflare. Cloudflare is the Apple of cloud. They're gunning for the big 3 by vertical integration and proprietary products and hence changing the way the market operates. On the other side you have up-and-coming IAAS and MAAS providers chipping away at the margins. These are either commodity providers that cut the fat, or owners of DC and/or connectivity so has the synergy to undercut the cloud platforms. This plays into the open platform push such as cloud native / kubernetes. It's almost certain that the cloud providers will lose marketshare in the IAAS space as they simply can't compete on cost. Regulation is also going to catch up to prevent cloud lock-in. So the only play these platforms have is to fight on scale and features which means continuous expansion on all fronts, including higher-level services.
dustingetz 5y ago
monopolies consolidate, and no tech company wants to be just a utility. my prediction is the monopoly dark age deepens, innovation stagnates. cloud is really monetized technical debt
noduerme 5y ago
To me, if you cut out all the garbage, this sounds like going back to managed dedicated hosting. All things are new! Managed hosting is so much better than designing your own stack! Look, you can pay us to just do it and it's like magic. Seriously? I hate the fact that most of my projects live on AWS right now. But I don't feel locked in; I can jump off if I want. I don't buy into the entire ecosystem (read: the parts that are difficult to migrate away from), but AWS is just an amazing way to manage lots of resources and patch them together in any way you can imagine. And therein lies the creativity and control -- and cost savings. Because no two projects scale in the same way. The fantastic thing about self-managed cloud environments is that you can find the right size and scalability for each thing, and everything is where you put it. Zero-downtime is up to you. The biggest drag on downtime is people in between you and access to restarting or working directly on those services. In the 2000's, I used to have to put in a fucking ticket with tech support to reboot a server in a datacenter six timezones away, and it wouldn't happen until someone had breakfast. Do you think people who write code and handle the optimization of it across databases and servers around the world, want to pay a middleman to "magically" do everything - and see why it doesn't scale, and find out who to call when it breaks? No, of course they want control over how their organization runs. I mean, part of my job is just identifying services we're currently overpaying for. I can take that down to a very fine-grained level with AWS. Why would I want to pay someone else to hide that information from me? "The edge" is like "no-code visual programming language". No one seriously wants convenience over power; but it's a great marketing pitch. 2030 will not be the revenge of managed hosting brought to you by lazy corporations like Cloudflare. It will be distributed self-managed stacks running everywhere.
otabdeveloper4 5y ago
Seems like Americans live in some sort of other parallel reality Internet where Hetzner et al., don't exist.
- jokethrowaway 5y ago
  This so much. Seeing cloud spend in companies always make me laugh. I could do all that for a fraction of the cost with dedicated servers outside of EC2. I don't know where this guy worked but I've seen at least 10 cloud migrations in my career, across different clients. It's not that uncommon and not too expensive unless you're relying on weird services on top of your cloud.
  - CSDude 5y ago
    Cloud =/= Just EC2, VMs. Why stop with the dedicated services? We can do much cheaper in colocation, or even building a datacenter /s
    - otabdeveloper4 5y ago
      Yes? Not sure why the '/s'. Options exist, and not just "AWS or GCP".
      - jokethrowaway 5y ago
        Sure aws, gcp and azure are interchangeably expensive
    - jokethrowaway 5y ago
      You're kidding but I've seen migrations from data centers to aws (despite committing to much larger expenses) and from aws to data centers (mainly to save money). In practical terms, the hassle of managing the hardware is far greater than having to manage software, especially now that everyone is on the container boat. Not that it was necessarily different for people on bsd + jails in the past, but that wasn't widespread. I think dedicated server are a sweet spot of complexity / cost.
xbar 5y ago
I don't think so.
wayoutthere 5y ago
This ignores a major factor driving usage of cloud-native services — namely that you don’t have to go through a corporate procurement process to use them, you can just use them. Which is why you’ll see any service offered by the major cloud providers achieve meaningful market share, even with an inferior product.
mherdeg 5y ago
There's a very particular kind of writing style happening here that I think I attribute to Matt Levine: > If that customer switches their $1M/year budget to Snowflake, then about $400k7 goes back to AWS, making AWS about $200k in gross profits. > That seems kind of bad for AWS? I don't know, we ignored a bunch of stuff here. > … > I'm not so sure? I spent six years as a CTO and moving from one cloud to another isn't something I even remotely considered. My company, like most, spent far more money on engineer salaries than the cloud itself. Putting precious eng time on a cloud migration isn't worth it unless cloud spend starts to become a significant fraction of your gross margins. Which is true for some companies! But those are in a minority. I like this style -- conversational, well-cited, like an industry insider giving you an off-the-cuff read on their discipline at a party -- and I'm glad we're seeing more of it. Do I misattribute it to Money Stuff? Was someone doing it before? (Some of my formative reading experiences were with Art Buchwald and Erma Bombeck and I think I see a hint of that too.)
- erikbern 5y ago
  haha, author here, I do admit that Matt Levine is one of my favorite writers today
  - agseward 5y ago
    Sorry to hijack the thread here. Why is your prediction that IBM gives up "hybrid multi-cloud"? Isn't hybrid multi-cloud exactly aligned with the future that you are portraying here (sans IBM's bet on k8s, which we could have another debate on) that what runs on top of cloud infrastructure will be available across multiple clouds? Disclaimer: I work for IBM, and my opinions are my own.
cblconfederate 5y ago
> Other pure-software providers will build all the stuff on top of it. I was just watching the AWS keynote and it seems they are doing the opposite, offering more and more ready-made services so that startups don't need to write software at all. What's the end goal of this? In the future amazon will use ML to auto-generate startups and offer them for sale. Then startup entrepreneurs will not need to hire programmers anymore, they will just buy a premade startup from AWS and become traveling salesmen. Basically gig worker CEOs for Bezos.
- randcraw 5y ago
  The end goal is proprietary lock-in, AKA The Microsoft Strategy. The reality of auto-ML is that you don't need garbage data to learn garbage. All you need is a "developer" who has no idea how dirty or unstable their data is, how accurate/precise the results should be, or where bias and edge cases manifest before GIGO becomes your project's mantra. The claims of auto-ML and auto-programming are two sides of the same coin. They're both silicon snake oil.
specialist 5y ago
I couldn't really follow this thesis. This observation popped out to me: > [Redshift] was a brilliant move by AWS, because it immediately lowered the bar for a small company to start doing analytics. Every sales organization I've ever seen collected too much data. What the kids today call "analytics". And these orgs don't know what to do with it all. So much so that they delude themselves. Convincing themselves they're divining wisdom from noise. I have no idea what this phenomenon is called. In fact, most recently, my last gig had decades of data hosted on Teradata, was migrating to Redshift. I worked on the Recommendations team, which was trying to evolve into Personalization. Teams of data scientists. So much data. A cultural legacy of batch processing hidden behind ML pipelines. So much effort. It took me a while to figure out most of the "work" my team did was completely fictional. Our most effective recommender algorithm was just showing people what they'd already looked at in the last 6 months. But this simple truth was hidden behind a massive rube goldberg machine. So. What was true of CRM and ERP systems in the 90s remains true today. Collecting data without purpose, without a working hypothesis, without experiments validating the effort, is just wasted effort. In my time, I've worked with two very smart marketing people. Knew how to design a survey, how to crunch the numbers, validated their own work. Once you see how a pro does it, you realize most everyone is just faking it, fooling themselves along with every one else. Pretty much just like every other discipline. -- Oh. How does my cynicism relate to the OC's prediction about a cloud shuffle? For the users of cloud stuff, making data collection, aggregation, and analysis easier and more accessible is a net negative. Which I suppose is great for cloud providers.
- tenebrisalietum 5y ago
  > Inferring wisdom from noise. I have no idea what this phenomenon is called. That's called projection.
- zcw100 5y ago
  > I have no idea what this phenomenon is called. It's called either pereidolia or apophenia
  - specialist 5y ago
jrochkind1 5y ago
> Cloud vendors might be pretty happy making money just in the lowest layer. Margins aren't so bad and vendor lock-in is still pretty high. But will vendor lock-in will be significantly lowered if the scenario predicted comes to pass?
intrasight 5y ago
I read the article and the comments here. Regarding the article: "Kubernetes will be some weird thing people loved for five years" What will replace it? It seems to me that people are moving towards K8 because it's the right abstraction. Regarding suggestions to use Herzner. I just looked because, while I knew the name, I didn't know the offerings. All I see is web hosting and Linux VMs.
oars 5y ago
Great post, thank you for sharing. I look forward to seeing this being reposted on HN in 2025, then again in 2030 for us to discuss.

205 points by pierremenard 5y ago

"Let's say a customer is spending $1M/year on Redshift. That nets AWS about6 $500-700k in gross profits..." Can AWS seriously buy and operate infrastructure for half the price than anyone else ? I can't imagine that being cheaper than running the datacenter yourself.

mvanbaak 5y ago
Yes. They simply call city/state/country X, and tell them: Yo, we are going to build a datacenter farm here for AWS. You are not going to tax us, provide half the funds, and we will try to source the workforce in your region mkay? And that is how their datacenter is almost gratis, and ours costs millions. Once you are at the AWS scale, things are differen.

theamk 5y ago

In the bigger companies, the effort of bringing in new vendor is substantial. There are contracts that need to be approved by legal, security assessments from IT, billing arrangements from finance, user database integration, and so on. If the company already using AWS, then any product offered by AWS has a huge advantage. I am sure that even if independent services are more loved by programmers, there will still be substantial amount of companies using AWS versions. And since the bigger companies would prefer them, I would not be surprised to know that AWS earns more money from them than startups do.

ineedasername 5y ago
Definitely this: If I had to guess, Snowflake gets a lot more customers from organizations with pre-existing balkanized data silos that need to be fixed than from Redshift churn. Just a guess though.

wmf 5y ago

This seems like a mix of wishful thinking and extrapolating from a single outlier (Snowflake).

ineedasername 5y ago
I agree there's too much emphasis on Snowflake, but I think the article still makes a good point, which I interpreted as something like this: 1) Cloud provider core competency is basically IaaS 2) Some level of SaaS was baked in to attract or lock-in customers, but isn't really a core competency 3) This leaves room for faster more agile startups to come in and build best of breed SaaS solutions on top of the IaaS, including those areas where cloud providers already have their own solutions. I don't see a tipping point on the horizon to warrant language like "impending reshuffle", but I think it's an interesting trend to keep tabs on.

darkerside 5y ago

Not to detract from the point, but I don't think you can take revenue numbers from RedShift to Snowflake like that. We made that move and ended up with 20x the monthly cost (after budgeting for 10x). Seems like AWS is still making their money on the underlying layer in our case.

1cvmask 5y ago
Did you spend more than 20x more on Snowflake? Where there any benefits to justify that massive increased cost?

klodolph 5y ago

Ahhh... maybe. > There's some sort of folk wisdom that the lowest layer of cloud services is a pure commodity service. > Cloud vendors might be pretty happy making money just in the lowest layer. Margins aren't so bad and vendor lock-in is still pretty high. It may be folk wisdom, but big customers look at stuff like storage and CPU pricing when picking a vendor, because they need lots of storage and CPU. These services, in turn, are priced close to the actual cost of the underlying storage and CPU because of the high volume of storage and CPU involved. I have worked at cloud vendors. Margins aren't great. Cloud vendors are always asking questions like, "How does vendor X sell this for so cheap? We can't make a profit at that price! How can we make our costs for X lower?" The lock-in is seen as a way to sell the higher-level services. However, the high-level services, the stuff that start-ups compete with, also face competition with open-source projects. Things that used to be SaaS are now DIY with open-source projects running on IaaS. Ten years ago you had no Kubernetes, and you didn't have columnar storage out of the box on PostgreSQL. Cassandra was immature. Nowadays, open-source software running on IaaS has killed the need for bigger segments of the SaaS market, assuming you have enough expertise in-house to run it.

pierremenard 5y ago
> assuming you have enough expertise in-house to run it. Most small to mid-sized companies would almost always opt to pay a bit more for a managed offering and not have to bring in expertise in-house for things that are not their core competency.
- klodolph 5y ago
  For a small company, that's sensible. For a mid-size company, I think it's short-sighted. I'd argue that mid-size tech companies need the expertise that comes with running more of their own stack. If you don't have the expertise, then you're going to be dealing more with support engineers to solve your problems, and you won't have as much insight into your tech stack as you'd want. There's a big difference between the experience of opening a support ticket to fix a problem with your database and paging one of your salaried engineers to fix it--someone who actually runs the service to begin with.

mr_toad 5y ago

> What happened? Marketing. Everyone has heard of Snowflake. And not just IT people. Finance, marketing, I’m sure even the cleaners have heard how wonderful it is. Redshift on the other hand is something that a lot of IT people and even some data warehousing people seem unaware of. There are many people who seem to think that Snowflake is the only option.

macintux 5y ago
Maybe, but I've not heard of either.
pid-1 5y ago
Snowflake legit has some features Redshift doesn't, the killer one IMO being auto scaling for computing resources. That is really awesome for infrequent workloads. Last week AWS uncovered Redshift Serverless, but still on technical preview. Another point, Snowflake is just easier to use. I've seen young developers who knew a bit of database stuff setup and play with it with little help. Redshift on the other hand is much more entrenched in the whole AWS mess and requires one to understand shit like VPCs, security groups, IAM, cloud watch, etc....

thinkingkong 5y ago

There are a few factors involved but the biggest ones we aren't discussing are demographic shifts and fashion. We've got an entire new generation of developers entering into the marketplace that have no idea what life was like _before_ cloud computing was a thing, and their priorities are different than simply avoiding some capex and some graybeard sysadmins. In terms of strategy, AWS is completely and totally unapologetic about copying companies built on top of their platform if it helps them in the future. The author suggest that there haven't been this many companies aimed at the vendors before but that's a lack of insight into the history of how they came about in the first place. When AWS was first launched there were dozens and dozens of vendors competing with, building on top of, and partnering with cloud vendors. Almost none of them exist today. Snowflake is an incredible exception but not a rule. The reason they succeeded (and the reason I personally believe fly will succeed) is because they're building hard to implement underlying technology and focusing on DX. That's basically it. If you're going to compete on economics you're absolutely hooped.

dustintrex 5y ago
"fly"?
- arpa 5y ago
  probably fly.io
mellavora 5y ago
Don't forget that Snowflake (implicitly) supports a paradigm where all of your data ends up locked into AWS. It would just cost too much to move it elsewhere. Note the (current) top post on this article: > hodgesrm 4 hours ago | next [–] > I'm at AWS re:Invent this week and ... Two themes really stand out in the keynotes and associated presentations: > 1.) Becoming a home for data and ML services backed by hardware technologies like Graviton, Trainium, and stupid fast network connectivity. Amazon has dozens of value-added services from S3 to analytic databases. So if Snowflake is helping AWS succeed in AWS goal 1 ("home for data"), I think AWS is smart enough to help Snowflake grow and prosper.

falaki 5y ago

There is some truth to this argument: https://sigops.org/s/conferences/hotos/2021/papers/hotos21-s02-stoica.pdf https://sigops.org/s/conferences/hotos/2021/papers/hotos21-s...

dustintrex 5y ago

This might happen, but Cloud vendors will fight tooth and nail to stop it from happening, because the lower layers are commodities and a race to the bottom pricewise. Also, many companies want a single neck to wring if anything goes wrong, and are thus unwilling to deal with a patchwork of third-party vendors. That said, telcos used to mint money from overseas calls, SMS, ringtones etc, until the Internet came along and everything went "over the top" (over data and thus outside operator billing). They didn't take that lying down, either (IIRC Skype was still banned in the UAE until COVID finally whacked some sense into them), but in the end telcos were still reduced to dumb pipes they are today.

raffraffraff 5y ago
The "single neck to wring" doesn't really exist unless you're a Salesforce / Atlassian / ServiceNow sized customer. Below a certain size, good luck getting support from AWS beyond "read the docs". The thing is, most of the time your outages are because you screwed up. "Shared responsibility" means that unless AWS actually loses a whole region for the day, or S3 actually loses your data forever, it is still "your fault". Because you didn't balance across AZs, take backups, test backup recovery, understand point-in-time recovery or egress charges etc. As the article says, CTOs don't change cloud providers. I've been on the hook for DR exercises where the same stack is running on the same cloud and they've failed because engineers make crazy number of invisible hard-coded design choices. Once you build your product on AWS, you're pretty much stuck there. K8s offers kinda-of an escape hatch, because it's possible to build your SaaS on EKS in such a way that it could be migrated to AKS or GKE, but it's still a ton of work for the plumbers. So the reason that AWS has this proliferation of ready-made services (and there are tons of them - try sitting an AWS professional certification) is that you'll generally use them in favour of deploying your own FOSS thing (even if it's "just a helm chart away"). Because running a database cluster (for example) is never as simple as just deploying it. Once your engineers decide to use Cognito, Lambda, Kinesis, Aurora instead of doing a DIY, you're locked in. Hell, it would even cost a fortune to simply download the data to close your account (because AWS Snowball doesn't have an egress option where they'll drive a few PB of your data to your data center in a semi-truck)
pid-1 5y ago

runako 5y ago

This analysis ignores the reality that most teams do not want to spend time optimizing each component in their stacks. As a CTO/CIO, you have to pick your battles, and the "more future vendors" box in the stack made my hair stand on end. Nobody wants their vendor stack to keep growing! I need a managed PostgreSQL database; my needs would have to be relatively exotic for e.g. RDS to not be a good solve. AWS has deployment options for the big stacks. Tools like Vercel do not yet address the solid majority of Web developers who primarily write code for .NET or Java, and thus are not even in the conversation at most organizations (and nobody really wants 2+ PaaS vendors). This is not to say the point solution vendors will not be able to build solid businesses. MongoDB is doing well alongside platform solutions like DynamoDB. But the gravity is clearly with the platforms, and nothing Mongo can do (short of becoming a hyperscaler cloud provider with lots of offerings) will change that. Snowflake is a special snowflake; it's entirely possible that the lessons of Snowflake apply only to Snowflake.

Toine 5y ago
I think most of us, senior included, SEVERELY underestimate the cost of having a deeply fragmented stack. I believe having 1 or 2 max vendors, providing most of your services, is immensely beneficial in the long run, for many reasons. cf http://boringtechnology.club http://boringtechnology.club

hodgesrm 5y ago

> What if cloud vendors focus on the lowest layer, and other (pure software) vendors on the layer above? I'm at AWS re:Invent this week and I can tell you this absolutely not what Amazon is doing. Two themes really stand out in the keynotes and associated presentations: 1.) Becoming a home for data and ML services backed by hardware technologies like Graviton, Trainium, and stupid fast network connectivity. Amazon has dozens of value-added services from S3 to analytic databases. By my count they have at least 16 managed data services. 2.) Extend Amazon cloud wherever possible into non-cloud environments. Specifically: push to on-prem through technologies like AWS Outposts and Container Marketplace Anywhere as well as integrate with IoT. #2 looks like a pump fake to defuse customer lock-in concerns. The real play is #1, which is to become the preferred home for data, taking the maximum possible share of revenue in the market. Taken as a whole, Amazon has the best data story of any company I know of.

WaxProlix 5y ago
I worked at AWS Systems Manager, which has a hybrid on-prem solution that lets you integrate non-aws resources into the IAM/HOSM world (sometimes just called Managed Instances). There was a bit of pushback internally around what kind of play we were allowed to make in the on-prem/hybrid space, and eventually the product just got KTLO'd. Kind of a shame, it was neat.
- noduerme 5y ago
  This seems prophetic. I'd be really curious what you could do with that kind of "Managed Instance" and why it was killed.
  - WaxProlix 5y ago
    It wasn't killed, the feature just never got the kind of marketing and traction that we felt it could/should have. IAM went off and built their own blessed version later, I think.
simonh 5y ago
I don't think the contention is that they will give up on these services, or publicly acknowledge that this is happening. A lot of AWS customers will be very happy with the native vendor services, it's just that the premium and corporate end of the market will go with more sophisticated ISV services. Also this is a forward looking prediction, it's happening in certain segments now, and will become prevalent in other segments over time. That's the claim anyway. Take Elasticsearch for example, AWS is offering a clone service, but if you want the best Elasticsearch experience on the latest code base maybe you're better off using Elastic's own Elastic Cloud service that's also within AWS. If things play out as Erik predicts (and Elastic doesn't screw up) they should do just fine. We'll see if that's how it plays out.

ocdtrekkie 5y ago

I think this guy is very optimistic on cloud if he thinks in ten years people will still view it as the right way to go. A bunch of monopolies are using various levers to push companies to shift to a model with uncapped spending (literally), with a huge extra profit margin. Cloud has benefits for two narrow segments of business: Rapidly scaling new companies and extremely globalized companies, and makes basically no sense for anyone else. As regulations catch up, national borders continue to impact how businesses operate across networks, etc., I doubt the cloud model will still look good in ten years. Half the benefit of the cloud is just being... newer. Interfaces are often more modern simply because, well, the Windows Server team all started working on Azure instead. A decade from now, people will look at the pains and problems of working with AWS and Azure the way people look at dealing with Windows Server and hardware maintenance today: Looking a little rough.

benjaminwootton 5y ago

This is the polar opposite of what is happening in cloud. All vendors are moving up the stack, with the eventual endpoint being even business productivity apps aligned with Azure, GCP, AWS. They all see IAAS as the commodity end with less value add and lock-in. This is undeniable through actions and PR statements and has been the observed direction of travel for a decade at least.

0fuchs 5y ago

I’m waiting for graphics cards to be accessible again so we can do ML generative art, music, and multimedia at home and implode the cloud for anything but storage and recovery of algorithmic libraries that regenerate seeds. Sorry/not sorry but I’m sick of this bizarre startup fetish for syntax art and finance as usual. The algorithms are public domain. It’s still feudal property ownership. We call caste cohort now, having conjured another abstraction to confuse the rubes. We send kids to college to define statistical objects of unknowable information network effects in many contexts to keep them busy. We’ll probably just morph to supporting the logistics network in the abstract. I can see teens and 20-something basically nationalizing that approach once enough old people die. It’ll all be boxed up behind tidy APIs

samwillis 5y ago

I always assumed AWS had the same model as the Amazon store, if they see something gaining in popularity on their platform (or off it), copy it and do it themselves. It’s inevitable that things like Vercel, Netlify, Fly, and Render are copied by Amazon. It’s what they do, they want the full stack top to bottom fully integrated. The thing they will never compete in though is developer UX, that’s where the smaller vendors (like those mentioned above) will always shine. AWS is now about 100x to big to have a good developer UX, there is just to much there. The company that is really shaking things up is CloudFlare, they don’t seem to be afraid of playing with the business model to undercut AWS.

crate_barre 5y ago
Their big money comes from enterprise. Enterprise does not care about developer quality of life.
- samwillis 5y ago
  Exactly, and it shows in how overly complex the whole system has become.

justicezyx 5y ago

The article has a eye-grabbing title that is quite larger than what's covered in the content, which has become a norm nowadays. My read: the article builds on 1 core thesis --- the big 3 are moving into infrastructure focused vendors, and more and more software layers, when moved to Cloud, will be owned by vertical aligned vendors with gradually refined market focuses (data warehouse, streaming/messaging, app hosting, etc.; and the pattern repeats itself along even higher levels). I cannot say I have enough data to agree or disagree with the prediction. Mostly, the Cloud is still very early in its development. The Cloud today only changes how the underlying business model works in provisioning computing. I.e., people now by default goes to Cloud for machines. That's a generational transition from the old DC/on-prem model. But on top of this new model, the software only start to gain some properties that are distant from the old model fundamentally. Lambda is one such example. Docker/Kubernetes, as the article points out, is actually very incremental development over the old models (thinking about Vsphere puppet scripts etc.). My sentiment is that fundamental shift like Cloud, only manifest itself after it gives birth to fundamental shift in how applications are developed and run. There are a lot of relatively new trends in this area, but none of them give me the impression of a killer paradigm. I am looking for something like PC + windows, Internet + Google, Cloud + ? type of thing. Let's see in 10 years.

hardwaresofton 5y ago

This theory and the conclusion on what the landscape will look like is spot on -- it's so spot on it's already obvious. In fact, it doesn't go far enough. People are overlooking another angle -- the evaporation of the moat around the larger providers in terms of infrastructure they provide. Every year it gets easier and easier to run core AWS offerings (ex. S3 or EC2-like services) as long as you don't need 5 9s of availability (I'd argue most businesses actually don't need that and don't have it even if the underlying infra does). Smaller players can run that infra at much smaller scale than AWS with higher relative margins. Software is easier to administer these days (don't say buzzwords like "cloud native" never did anything for you), and the startling thing is that the larger clouds still have a near monopoly on robustness/service choice. Of course I'm lying a bit here -- OVH has managed databases, and there are Managed Service Providers (MSPs) that run in places that are not the major clouds but the point here is that fundamentally technological leverage and hardware prices are actually chipping away at the moats of the large clouds every day. Larger clouds have to move up the value chain, and that is exactly where smaller companies can have an advantage (not in pricing, but in quality). Hetzner has just opened it's first US data center in Ashburn, Virginia -- and IMO was worth using when it was only in Germany. Time to interactive is really important, but almost no one worries about this when it comes to dealing with backends. Deploying your frontend to cloudfront/vercel/any other CDN and leaving your relatively simple backend (what you might use for a simple three tier ruby/django app) is extremely cost effective but requires know-how. Hetzner starting operations in the US is going to introduce new competition in the lower layers of this vertical, and there's absolutely no reason that the Managed Service Providers (MSPs) can't take advantage of this and grow their customer base. I'm trying to start making the know-how portable -- building a cloud that runs on many providers (starting with Hetzner) and I'm calling it Nimbus Web Services[0] with a launch early next year. [0]: https://nimbusws.com https://nimbusws.com

torginus 5y ago

I generally never understood the appeal of the cloud, and the particular way the 3 big vendors sold proprietary services as a means of vendor lock-in. I mean, I understand the appeal to them, seeing how they made ungodly amounts of money doing it, and given the choice you never want to be in a commodity market, but as user/developers, the value proposition has always been unclear to me. - The term 'containerization' implies in theory (and somewhat in practice) that you package your software in such a way, that it can run on commodity hardware with enough resources. - The huge success of open source means that for any given problem domain (KV stores, SQL, Web Server,LB, caches etc.). There exists a best-in-class solution that's free as in speech. In fact, cloud providers' solutions use these libraries as well. - The development of languages that combine productivity and performance (Go/Java etc.) and with Moore's law enabling ridiculous core counts/RAM sizes etc. means that there's less of an incentive to run a server farm when you can easily fit 128 peak-performance cores under your desk. Stackoverflow did this/has been doing this model with quite some success.

edem 5y ago
To me the ease of use is key. I don't want to deal with outages, hardware failures, networking issues, etc. I only want to focus on the software. That's why I don't understand why would anybody (apart from some special cases) would run their own servers.
- darkwater 5y ago
  You will still have to deal with outages (even if probably at a much lower rate). Just today I got a confirmation from AWS that the 1h outage that our production, multi-AZ RDS database suffered *three months ago* was due to an underlying failure in their storage subsystem. I didn't have to fix any SAN or fiber issue, true, but I lost hours puzzling and debugging things to understand why it failed, with no good answer (until today).
  - edem 5y ago
    Let's be honest. It is much different than having to sit in the car in the middle of the night to change a hard drive in the server that just failed because of a power surge.

planetjones 5y ago

Not sure about this. Take Microsoft for example. Databricks runs on Azure, but they are investing heavily on Synapse workspaces so they own both the underlying infrastructure and the application stack on top. I think the cloud providers have incredible amounts of engineering resources. Their aim is to do anything to get everyone onto the platforms. I don’t see any clear trend coming out in the years ahead. There will be a myriad of solutions (some wholly owned by the cloud provider and some with a third party like snowflake or databricks involved) and customers can choose what works for them.

TruthWillHurt 5y ago

I disagree. The profit margin/markup cloud providers make increases the higher you climb the abstraction layer. 1GB of RAM is 10X more expensive in Lambda than in EC2, but costs AWS the same to provide. Second - services offered are a key selling point and driver of competition between clouds. they all want more features. Third - considering point 1 & 2, clouds prefer to offer their own versions of things. i.e AWS and the Elasticsearch fork.

paulsutter 5y ago

Obviously the cloud vendors will try hard to foist lock-in on customers, and savvy customers should be trying hard to avoid those proprietary high level services But what percentage of cloud programmers are wise to this? The individual programmers make the decisions that cause lock in Cloud vendors know how locked in you are when you negotiate discounts, but by that time the key decisions are long past

simonh 5y ago
Erik's contention is that the second part after the 'and' isn't obvious at all. There's no point avoiding lock in because you're locked in anyway. You might as well just use the features and services that best suit your needs, because that way you'll make best use of your developer time and resources. I think he's right, the costs of any migration to a new cloud service are so high that it's pointless making gestures pretending you're preparing for it.
- paulsutter 5y ago
  There are huge discounts available. You don’t get them by moving, you get them because you’re not locked in
  - simonh 5y ago
    Every now and then you need to stand up a completely new system, or replace an existing system. At those times you get to pick what platform you will build it on, and Amazon wants you to pick AWS. Therefore AWS needs to be competitive. In the vast majority of cases that decision really isn't going to be influenced by whether your existing system on AWS does or doesn't use Amazon specific tech. If you're "moving" your service from AWS to Azure those kinds of implementation details just don't matter, in most cases you're effectively going to build a replacement system and not really migrate an existing one. The costs of such a migration would in most cases dwarf any possible savings, no matter how carefully you tried to avoid lock-in. I'm obviously generalising a fair bit, but the exceptions are likely to be less complex systems that are perfectly fine using fairly generic services.

loosescrews 5y ago

I think one thing that articles like this miss is that not all cloud services run, themselves, in VMs. For example, most of Google's don't. While virtualization has improved a lot, it wouldn't be possible to replicate many of Google's cloud offerings with competitive performance and cost on Google's Compute Engine. Cloud Storage, BigQuery, serverless (Cloud Run, App Engine, Cloud Functions), Spanner, Bigtable, and Firestore all come to mind. One big challenge for cloud workloads is multi-tenancy. If you want to run arbitrary untrusted code on the cloud, your only option is something like gVisor (which isn't exactly a compromise-free solution). Nested virtualization is not secure and will likely even preform worse.

markgavalda 5y ago
I agree, however I really like what https://firecracker-microvm.github.io/ https://firecracker-microvm.github.io/ is doing to change the above.
- loosescrews 5y ago
  Can you elaborate on how Firecracker is changing the situation? My claim is that it isn't possible to build services on top of GCE/EC2 that compete with 1st party cloud offerings in important ways. The problems with nested virtualization are mostly in silicon and to some extent in kvm. Firecracker doesn't really have much to do with it as the VMM isn't the problem. You could use Firecracker to build your own GCE/EC2 competitor on bare metal, but that solves a different problem.
  - cthalupa 5y ago
    You can get bare metal instances without a hypervisor on EC2

rambambram 5y ago

> There's never been this many companies going after services that traditionally belonged to the cloud vendors Interesting article. The words 'traditional' and 'cloud' in one sentence... I can't stand that. The cloud is just marketing speak for the internet. Make it vague on purpose so you can sell the same sh!t in another package to more people. And grab all the data in the meantime. HN is smarter than this, right!?

starfallg 5y ago

His whole argument more or less hinges on the fact that the 3 services he picked only had AWS, GCP and Azure as options, and hence the big 3 are content to defend their market position. But that's not a done deal as things can change on a dime and the cloud vendors are being vigilant. Their 50-60% margin will be spent on developing more lock-in. On one side you have Cloudflare. Cloudflare is the Apple of cloud. They're gunning for the big 3 by vertical integration and proprietary products and hence changing the way the market operates. On the other side you have up-and-coming IAAS and MAAS providers chipping away at the margins. These are either commodity providers that cut the fat, or owners of DC and/or connectivity so has the synergy to undercut the cloud platforms. This plays into the open platform push such as cloud native / kubernetes. It's almost certain that the cloud providers will lose marketshare in the IAAS space as they simply can't compete on cost. Regulation is also going to catch up to prevent cloud lock-in. So the only play these platforms have is to fight on scale and features which means continuous expansion on all fronts, including higher-level services.

dustingetz 5y ago

monopolies consolidate, and no tech company wants to be just a utility. my prediction is the monopoly dark age deepens, innovation stagnates. cloud is really monetized technical debt

noduerme 5y ago

To me, if you cut out all the garbage, this sounds like going back to managed dedicated hosting. All things are new! Managed hosting is so much better than designing your own stack! Look, you can pay us to just do it and it's like magic. Seriously? I hate the fact that most of my projects live on AWS right now. But I don't feel locked in; I can jump off if I want. I don't buy into the entire ecosystem (read: the parts that are difficult to migrate away from), but AWS is just an amazing way to manage lots of resources and patch them together in any way you can imagine. And therein lies the creativity and control -- and cost savings. Because no two projects scale in the same way. The fantastic thing about self-managed cloud environments is that you can find the right size and scalability for each thing, and everything is where you put it. Zero-downtime is up to you. The biggest drag on downtime is people in between you and access to restarting or working directly on those services. In the 2000's, I used to have to put in a fucking ticket with tech support to reboot a server in a datacenter six timezones away, and it wouldn't happen until someone had breakfast. Do you think people who write code and handle the optimization of it across databases and servers around the world, want to pay a middleman to "magically" do everything - and see why it doesn't scale, and find out who to call when it breaks? No, of course they want control over how their organization runs. I mean, part of my job is just identifying services we're currently overpaying for. I can take that down to a very fine-grained level with AWS. Why would I want to pay someone else to hide that information from me? "The edge" is like "no-code visual programming language". No one seriously wants convenience over power; but it's a great marketing pitch. 2030 will not be the revenge of managed hosting brought to you by lazy corporations like Cloudflare. It will be distributed self-managed stacks running everywhere.

otabdeveloper4 5y ago

Seems like Americans live in some sort of other parallel reality Internet where Hetzner et al., don't exist.

jokethrowaway 5y ago
This so much. Seeing cloud spend in companies always make me laugh. I could do all that for a fraction of the cost with dedicated servers outside of EC2. I don't know where this guy worked but I've seen at least 10 cloud migrations in my career, across different clients. It's not that uncommon and not too expensive unless you're relying on weird services on top of your cloud.
- CSDude 5y ago
  Cloud =/= Just EC2, VMs. Why stop with the dedicated services? We can do much cheaper in colocation, or even building a datacenter /s
  - otabdeveloper4 5y ago
    Yes? Not sure why the '/s'. Options exist, and not just "AWS or GCP".
    - jokethrowaway 5y ago
      Sure aws, gcp and azure are interchangeably expensive
  - jokethrowaway 5y ago
    You're kidding but I've seen migrations from data centers to aws (despite committing to much larger expenses) and from aws to data centers (mainly to save money). In practical terms, the hassle of managing the hardware is far greater than having to manage software, especially now that everyone is on the container boat. Not that it was necessarily different for people on bsd + jails in the past, but that wasn't widespread. I think dedicated server are a sweet spot of complexity / cost.

xbar 5y ago

I don't think so.

wayoutthere 5y ago

This ignores a major factor driving usage of cloud-native services — namely that you don’t have to go through a corporate procurement process to use them, you can just use them. Which is why you’ll see any service offered by the major cloud providers achieve meaningful market share, even with an inferior product.

mherdeg 5y ago

There's a very particular kind of writing style happening here that I think I attribute to Matt Levine: > If that customer switches their $1M/year budget to Snowflake, then about $400k7 goes back to AWS, making AWS about $200k in gross profits. > That seems kind of bad for AWS? I don't know, we ignored a bunch of stuff here. > … > I'm not so sure? I spent six years as a CTO and moving from one cloud to another isn't something I even remotely considered. My company, like most, spent far more money on engineer salaries than the cloud itself. Putting precious eng time on a cloud migration isn't worth it unless cloud spend starts to become a significant fraction of your gross margins. Which is true for some companies! But those are in a minority. I like this style -- conversational, well-cited, like an industry insider giving you an off-the-cuff read on their discipline at a party -- and I'm glad we're seeing more of it. Do I misattribute it to Money Stuff? Was someone doing it before? (Some of my formative reading experiences were with Art Buchwald and Erma Bombeck and I think I see a hint of that too.)

erikbern 5y ago
haha, author here, I do admit that Matt Levine is one of my favorite writers today
- agseward 5y ago
  Sorry to hijack the thread here. Why is your prediction that IBM gives up "hybrid multi-cloud"? Isn't hybrid multi-cloud exactly aligned with the future that you are portraying here (sans IBM's bet on k8s, which we could have another debate on) that what runs on top of cloud infrastructure will be available across multiple clouds? Disclaimer: I work for IBM, and my opinions are my own.

cblconfederate 5y ago

> Other pure-software providers will build all the stuff on top of it. I was just watching the AWS keynote and it seems they are doing the opposite, offering more and more ready-made services so that startups don't need to write software at all. What's the end goal of this? In the future amazon will use ML to auto-generate startups and offer them for sale. Then startup entrepreneurs will not need to hire programmers anymore, they will just buy a premade startup from AWS and become traveling salesmen. Basically gig worker CEOs for Bezos.

randcraw 5y ago
The end goal is proprietary lock-in, AKA The Microsoft Strategy. The reality of auto-ML is that you don't need garbage data to learn garbage. All you need is a "developer" who has no idea how dirty or unstable their data is, how accurate/precise the results should be, or where bias and edge cases manifest before GIGO becomes your project's mantra. The claims of auto-ML and auto-programming are two sides of the same coin. They're both silicon snake oil.

specialist 5y ago

I couldn't really follow this thesis. This observation popped out to me: > [Redshift] was a brilliant move by AWS, because it immediately lowered the bar for a small company to start doing analytics. Every sales organization I've ever seen collected too much data. What the kids today call "analytics". And these orgs don't know what to do with it all. So much so that they delude themselves. Convincing themselves they're divining wisdom from noise. I have no idea what this phenomenon is called. In fact, most recently, my last gig had decades of data hosted on Teradata, was migrating to Redshift. I worked on the Recommendations team, which was trying to evolve into Personalization. Teams of data scientists. So much data. A cultural legacy of batch processing hidden behind ML pipelines. So much effort. It took me a while to figure out most of the "work" my team did was completely fictional. Our most effective recommender algorithm was just showing people what they'd already looked at in the last 6 months. But this simple truth was hidden behind a massive rube goldberg machine. So. What was true of CRM and ERP systems in the 90s remains true today. Collecting data without purpose, without a working hypothesis, without experiments validating the effort, is just wasted effort. In my time, I've worked with two very smart marketing people. Knew how to design a survey, how to crunch the numbers, validated their own work. Once you see how a pro does it, you realize most everyone is just faking it, fooling themselves along with every one else. Pretty much just like every other discipline. -- Oh. How does my cynicism relate to the OC's prediction about a cloud shuffle? For the users of cloud stuff, making data collection, aggregation, and analysis easier and more accessible is a net negative. Which I suppose is great for cloud providers.

tenebrisalietum 5y ago
> Inferring wisdom from noise. I have no idea what this phenomenon is called. That's called projection.
zcw100 5y ago
> I have no idea what this phenomenon is called. It's called either pereidolia or apophenia
- specialist 5y ago

jrochkind1 5y ago

> Cloud vendors might be pretty happy making money just in the lowest layer. Margins aren't so bad and vendor lock-in is still pretty high. But will vendor lock-in will be significantly lowered if the scenario predicted comes to pass?

intrasight 5y ago

I read the article and the comments here. Regarding the article: "Kubernetes will be some weird thing people loved for five years" What will replace it? It seems to me that people are moving towards K8 because it's the right abstraction. Regarding suggestions to use Herzner. I just looked because, while I knew the name, I didn't know the offerings. All I see is web hosting and Linux VMs.

oars 5y ago

Great post, thank you for sharing. I look forward to seeing this being reposted on HN in 2025, then again in 2030 for us to discuss.