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Is there any gain here aside from cost saving? Will this saving be passed on to the customer? (laughs). What happens when the inevitable AWS outage then causes

Is there any gain here aside from cost saving? Will this saving be passed on to the customer? (laughs). What happens when the inevitable AWS outage then causes a global shipping bottleneck? Have we still not learnt that having sovereignty is better than saving money? Has COVID taught us nothing? sigh

deleted 4y ago
[deleted]
jupp0r 4y ago
What makes you think that a cloud provider outage is more likely than an existing-Fedex-datacenter outage?
- rbanffy 4y ago
  Mainframes themselves are extremely reliable. When configured as a cluster they get five nines. I'd say a power or communications failure is much more likely than mainframe downtime. With cloud you can rely on more datacenters and, if your application is built right, it may end up being more resilient than what a mainframe setup would give you. Downtime is a fuzzy thing. Whenever possible, I design my apps for graceful degradation - if the database becomes read-only, we can still operate in degraded mode. If we lose queues, some things will not work, but others will continue normally and many users will be completely oblivious to the alarm bells at the NOC (just kidding, there's no such thing). My SLA for full operation is much more relaxed than for degraded operation.
  - quickthrower2 4y ago
    I think a lot of sites would benefit from offline-first and cache a bit of information, perhaps encrypted with the same password you used. There is a lot you can still do if you can a functioning site (served from a service worker) with some cached data. You could read HN articles you read before, for example! Not to rely on this for the nines, but as a nice way to keep things useful when there is an outage or just slowness.
sokoloff 4y ago
What’s to gain other than $400M in savings every year indeed? If it drops all the way to the bottom line, that would boost their 2022 profits by 35% and 2021 profits by about 45%. Seems like a decision you have to consider, even with possible failure modes.
- oblio 4y ago
  https://en.wikipedia.org/wiki/FedEx https://en.wikipedia.org/wiki/FedEx Wikipedia says their net profit for 2021 was $75 billion, so your math seems off.
  - sokoloff 4y ago
    You are correct that I was wrong. (I searched "fedex profit 2021" and incorrectly reported based on a quarter's profit, which is sloppy as hell on my part.) That said, it seems like $75B is wildly too high as well. Page 43 of their most recent annual report shows a consolidated net income for the year ending May 31, 2021 as $5.2B, making $400M still a 7.5% boost (if it all passes through). https://investors.fedex.com/financial-information/annual-reports/default.aspx https://investors.fedex.com/financial-information/annual-rep... https://s21.q4cdn.com/665674268/files/doc_financials/annual/2021/389437(1)_12_FedEx_AR_WR.pdf https://s21.q4cdn.com/665674268/files/doc_financials/annual/...
  - lotsofpulp 4y ago
    Wikipedia is wrong, see page 43: https://www.sec.gov/Archives/edgar/data/1048911/000156459021037031/fdx-10k_20210531.htm#ITEM_6_SELECTED_FINANCIAL_DATA https://www.sec.gov/Archives/edgar/data/1048911/000156459021... I am not even sure where the $75.231B erroneous net income figure comes from, it is nowhere in the 2021 report: https://investors.fedex.com/home/default.aspx https://investors.fedex.com/home/default.aspx
  - mmiyer 4y ago
    That Wikipedia figure is vandalism from a couple weeks ago that I reverted.
- ClumsyPilot 4y ago
dchftcs 4y ago
I'm not sure having mainframes counts as sovereignty. Yearly savings suggests it doesn't.
iso1631 4y ago
Fedex will continue to charge as much as they can to boost their profits. This move will increase their profits, making $1.50 on each of 100 million deliveries instead of $1, boosting profits from $100m to $150m However if they were to undercut UPS and others they might be able snap up UPS business, dropping the profit to $1, but on 200 million deliveries, and thus they'll make $200m instead, you the customer will have a cheaper delivery, and everybody wins
- nly 4y ago
  Until it becomes a race to the bottom and UPS drop their prices as well. Then both companies suffer
  - JumpCrisscross 4y ago
    > becomes a race to the bottom and UPS drop their prices This is competition.
  - iso1631 4y ago
    And all consumers win. This is the beauty of capitalism, it's how it's supposed to work. It fails when you get high barriers to entry and company colluding
  - yuliyp 4y ago
    This is how the "passing the savings on to their customers" happens.
  - dx034 4y ago
    They're not really competing on price but on quality. They make the most money with super urgent deliveries. If they offer later pick up times or earlier guaranteed deliveries, customers will be happy to pay more. And their IT system is crucial for that.
jon-wood 4y ago
The immediate gains I can see are: * In-house development teams have more agility in standing up new services, since they can just use EC2/ECS/one of the other 1500 container runtimes AWS has, rather than having to wait for someone to provision new physical servers for them. * An extensive suite of complementary products are available from cloud providers, it's not just about being able to start a VM, in many cases you don't even need to because you've got Lambda, and the various managed services. * Less training/hiring overhead, since people who can use AWS are pretty much a commodity at this point, whereas people who can manage a mainframe are an increasingly rare breed. * Redundancy becomes easier. As does data locality, let's say Singapore declare all services delivered in Singapore must be hosted there. That's a lot easier to handle if you don't have to go and build/acquire a data centre first. * The aforementioned 400 million dollars per year.
- throw0101a 4y ago
  > In-house development teams have more agility in standing up new services, since they can just use EC2/ECS/one of the other 1500 container runtimes AWS has, rather than having to wait for someone to provision new physical servers for them. How many people run physical servers 'raw' anymore? I would hazard their current stack involves VMware, Hyper-V, Open Stack, or a combination of the three. You can have an API system spin-up just as effectively in a private cloud as a public one.
  - sofixa 4y ago
    That handles IaaS, now do all databases (relational, NoSQL, NewSQL, KV, etc.), message brokers, object storage and a hundred other services. OpenStack handles some of those, with varying degrees of success, but with VMware and Hyper-V you have to DIY from scratch with IMHO the wrong level of abstraction.
  - Jochim 4y ago
    I worked somewhere with a private cloud. It was permanently over-subscribed and the VMs were nearly unusable because of it. Not saying it can't be done well but there's less incentive for a company whose main business isn't providing infrastructure to ensure they've provisioned enough resources to meet demand.
knorker 4y ago
You can take part of the savings by buying NYSE:FDX stock. I'm not being facetious.
aliswe 4y ago
These hyper-ideological takes on finance are so tiring. If you think they are bound to make more profits, I suggest you invest in them, they are called FDX on NY stock exchange. EDIT: I used to be like that, too.

deleted 4y ago

[deleted]

jupp0r 4y ago

What makes you think that a cloud provider outage is more likely than an existing-Fedex-datacenter outage?

rbanffy 4y ago
Mainframes themselves are extremely reliable. When configured as a cluster they get five nines. I'd say a power or communications failure is much more likely than mainframe downtime. With cloud you can rely on more datacenters and, if your application is built right, it may end up being more resilient than what a mainframe setup would give you. Downtime is a fuzzy thing. Whenever possible, I design my apps for graceful degradation - if the database becomes read-only, we can still operate in degraded mode. If we lose queues, some things will not work, but others will continue normally and many users will be completely oblivious to the alarm bells at the NOC (just kidding, there's no such thing). My SLA for full operation is much more relaxed than for degraded operation.
- quickthrower2 4y ago
  I think a lot of sites would benefit from offline-first and cache a bit of information, perhaps encrypted with the same password you used. There is a lot you can still do if you can a functioning site (served from a service worker) with some cached data. You could read HN articles you read before, for example! Not to rely on this for the nines, but as a nice way to keep things useful when there is an outage or just slowness.

sokoloff 4y ago

What’s to gain other than $400M in savings every year indeed? If it drops all the way to the bottom line, that would boost their 2022 profits by 35% and 2021 profits by about 45%. Seems like a decision you have to consider, even with possible failure modes.

oblio 4y ago
https://en.wikipedia.org/wiki/FedEx https://en.wikipedia.org/wiki/FedEx Wikipedia says their net profit for 2021 was $75 billion, so your math seems off.
- sokoloff 4y ago
  You are correct that I was wrong. (I searched "fedex profit 2021" and incorrectly reported based on a quarter's profit, which is sloppy as hell on my part.) That said, it seems like $75B is wildly too high as well. Page 43 of their most recent annual report shows a consolidated net income for the year ending May 31, 2021 as $5.2B, making $400M still a 7.5% boost (if it all passes through). https://investors.fedex.com/financial-information/annual-reports/default.aspx https://investors.fedex.com/financial-information/annual-rep... https://s21.q4cdn.com/665674268/files/doc_financials/annual/2021/389437(1)_12_FedEx_AR_WR.pdf https://s21.q4cdn.com/665674268/files/doc_financials/annual/...
- lotsofpulp 4y ago
  Wikipedia is wrong, see page 43: https://www.sec.gov/Archives/edgar/data/1048911/000156459021037031/fdx-10k_20210531.htm#ITEM_6_SELECTED_FINANCIAL_DATA https://www.sec.gov/Archives/edgar/data/1048911/000156459021... I am not even sure where the $75.231B erroneous net income figure comes from, it is nowhere in the 2021 report: https://investors.fedex.com/home/default.aspx https://investors.fedex.com/home/default.aspx
- mmiyer 4y ago
  That Wikipedia figure is vandalism from a couple weeks ago that I reverted.
ClumsyPilot 4y ago

dchftcs 4y ago

I'm not sure having mainframes counts as sovereignty. Yearly savings suggests it doesn't.

iso1631 4y ago

Fedex will continue to charge as much as they can to boost their profits. This move will increase their profits, making $1.50 on each of 100 million deliveries instead of $1, boosting profits from $100m to $150m However if they were to undercut UPS and others they might be able snap up UPS business, dropping the profit to $1, but on 200 million deliveries, and thus they'll make $200m instead, you the customer will have a cheaper delivery, and everybody wins

nly 4y ago
Until it becomes a race to the bottom and UPS drop their prices as well. Then both companies suffer
- JumpCrisscross 4y ago
  > becomes a race to the bottom and UPS drop their prices This is competition.
- iso1631 4y ago
  And all consumers win. This is the beauty of capitalism, it's how it's supposed to work. It fails when you get high barriers to entry and company colluding
- yuliyp 4y ago
  This is how the "passing the savings on to their customers" happens.
- dx034 4y ago
  They're not really competing on price but on quality. They make the most money with super urgent deliveries. If they offer later pick up times or earlier guaranteed deliveries, customers will be happy to pay more. And their IT system is crucial for that.

jon-wood 4y ago

The immediate gains I can see are: * In-house development teams have more agility in standing up new services, since they can just use EC2/ECS/one of the other 1500 container runtimes AWS has, rather than having to wait for someone to provision new physical servers for them. * An extensive suite of complementary products are available from cloud providers, it's not just about being able to start a VM, in many cases you don't even need to because you've got Lambda, and the various managed services. * Less training/hiring overhead, since people who can use AWS are pretty much a commodity at this point, whereas people who can manage a mainframe are an increasingly rare breed. * Redundancy becomes easier. As does data locality, let's say Singapore declare all services delivered in Singapore must be hosted there. That's a lot easier to handle if you don't have to go and build/acquire a data centre first. * The aforementioned 400 million dollars per year.

throw0101a 4y ago
> In-house development teams have more agility in standing up new services, since they can just use EC2/ECS/one of the other 1500 container runtimes AWS has, rather than having to wait for someone to provision new physical servers for them. How many people run physical servers 'raw' anymore? I would hazard their current stack involves VMware, Hyper-V, Open Stack, or a combination of the three. You can have an API system spin-up just as effectively in a private cloud as a public one.
- sofixa 4y ago
  That handles IaaS, now do all databases (relational, NoSQL, NewSQL, KV, etc.), message brokers, object storage and a hundred other services. OpenStack handles some of those, with varying degrees of success, but with VMware and Hyper-V you have to DIY from scratch with IMHO the wrong level of abstraction.
- Jochim 4y ago
  I worked somewhere with a private cloud. It was permanently over-subscribed and the VMs were nearly unusable because of it. Not saying it can't be done well but there's less incentive for a company whose main business isn't providing infrastructure to ensure they've provisioned enough resources to meet demand.

knorker 4y ago

You can take part of the savings by buying NYSE:FDX stock. I'm not being facetious.

aliswe 4y ago

These hyper-ideological takes on finance are so tiring. If you think they are bound to make more profits, I suggest you invest in them, they are called FDX on NY stock exchange. EDIT: I used to be like that, too.