6 ms·

This is not what we're seeing (disclosure, I'm a founder at a cloud-cost management startup). Momentum is still towards the cloud, with some exceptions, given t

by ary 4y ago

This is not what we're seeing (disclosure, I'm a founder at a cloud-cost management startup). Momentum is still towards the cloud, with some exceptions, given the amount of talent available to deploy there versus on-prem. The "move" to on-prem is like the "move" to alternate or hybrid clouds: it's a negotiation tactic with AWS et al. When it's time to negotiate your enterprise discount program, savings plan(s), etc., etc. you need leverage, and that's what this is. Some companies spend multiple hundreds of millions of dollars with AWS alone and at that cost any and every tactic to bring down spend will get deployed.

jamesblonde 4y ago
That's your experience. We had a global network operator talk to us about repatriating its ML workloads on-premises from Azure. Cost is the main factor, sure.
- gumby 4y ago
  Azure has an on prem version to facilitate (and monetize) that transition. I don’t like Azure and won’t use them again but this seems like a smart approach for MS to take.
bklyn11201 4y ago
Even with the discounts, savings plans, multi-year commit discounts, etc., the cloud costs are absolutely absurd if you are running stable applications where you understand the future growth, use, and demand. Yes, the cloud is the right place for 99% of apps out there, but the market is sending a clear objective out to all tech companies: become profitable and build a sustainable, high margin on your products. Every maturing company with predictable products must be exploring ways to move workloads out of the cloud. AWS took your margin and isn't giving it back. https://a16z.com/2021/05/27/cost-of-cloud-paradox-market-cap-cloud-lifecycle-scale-growth-repatriation-optimization/ https://a16z.com/2021/05/27/cost-of-cloud-paradox-market-cap...
- wmfiv 4y ago
  Dropbox (from the a16z article) to me is the exception that proves the point. What percentage of COGS is your cloud/infstracture spend? If your products don't look like cloud infrastructure (aka Dropbox), it better be very small. If you think cloud is costing you 1000% what it would cost on-premise, that's almost certainly a spend and architectural discipline problem, not a cloud problem.
  - marcosdumay 4y ago
    Hum... A 1000% overhead looks typical to me. Whether that's an important saving or not changes from business to business, but anything less than 1000% seems only achievable by customized discounts from the cloud provider.
    - throwaway894345 4y ago
      I feel like this is comparing some cost-optimized on-prem scenario with a "idgaf, I'm prioritizing growth over cost savings" cloud scenario. Every company I've worked at has been way more concerned with growth to the point that the cloud spend is wildly careless, but we could easily reduce it by a factor of 10 with dramatically less effort than it would take to move on prem.
      - deleted 4y ago
        [deleted]
  - cplusplusfellow 4y ago
    Is saving 50% also a worthwhile goal at expense of being on prem, and all the downsides? Asking honestly because that’s where my business is in terms of the decision. We won’t save 90% but we will save 45-55%.
    - mywittyname 4y ago
      Is your company experiencing rocketship growth or are you at the point where your growth has stabilized to a modest figure? It's probably best to pursue growth over cost savings, if possible. But not every company is in a position where a few more features can double revenue. Still, I think it's hard to justify going anti-cloud in an effort to cut costs. Without a very skilled and experienced team doing the migration, the end result is very likely to be some hybrid setup that's the worst of both worlds. Especially if you're using a managed service, the open source alternatives might not be the drop in replacement that they claim to be.
unity1001 4y ago
> (disclosure, I'm a founder at a cloud-cost management startup) Isnt it natural that your service gains more users at this time when everyone is trying to cut down on cloud costs... Cloud usage may be declining, but those who are still using it would want to cut costs...
red-iron-pine 4y ago
There is still a lot of momentum because the 2nd and 3rd wave have yet to be burned. Pre-COVID I was a at a F500 that had gotten screwed pretty hard by an Azure deployment than ended up costing TONS more than anticipated. Even after we made it clear it would be a lot of OpEx. "Sales engineers gonna play games" -- and they did. New gig is just going down that path, and is, go figure, seeing the same problems. Burned by Azure, and now getting bilked for every last dollar by GCP.
- izacus 4y ago
  Also don't underestimate the resistance of employees who built their careers only ever knowing how to do cloud - they'll make sure the cost reports and plans are always doctored in a way that cloud wins because that's the only way they know how to do their job.
  - red-iron-pine 4y ago
    > Also don't underestimate the resistance of employees who built their careers only ever knowing how to do cloud - they'll make sure the cost reports and plans are always doctored in a way that cloud wins because that's the only way they know how to do their job. Seconded. We called in Accenture to tell us if we should do the cloud. They said Yes. I was on the Solutions & Architecture team, and we asked to take a look at their numbers. Found multiple errors in their spreadsheets. Math being straight up incorrect, or calling out pricing that didn't match what our SaaS sales guys gave us. "Oh they're old reports". Okay fine, run them again with the new numbers, and slap the recent graduate who you forced to make this excel. Again, the numbers came back strongly in favor of Azure. Took a look again, this time had some fruity macro and pivot table, and we couldn't clearly make out what they did to get their final $$$ figures. 3 months later we declared we were "cloud first". There was much speculation as to how much $$$ the directors and VPs got. In a different life I was in sales engineering and there was an unspoken rule about "referral agent fees" to 3rd parties who help us close deals...
    - jbverschoor 4y ago
hinkley 4y ago
It's often been the case that the late adopters of the Adoption Cycle show up after the early adopters have moved onto the next adoption cycle. With computers it's also usually the case that the Late Adopters show up in the middle of the Trough of Disillusionment of the Hype Cycle. It takes a long time for new trends to percolate through the management class. I had a gruff old engineer at an early job who used to joke that one of the executives must have gone in for a dentist appointment and read the 5 year old tech magazines in the waiting room, because we have a new initiative to start doing something that other people are already stopping.
andrewstuart 4y ago
Here is the truly mind blowing map of how you are charged on AWS: https://d2908q01vomqb2.cloudfront.net/77de68daecd823babbb58edb1c8e14d7106e83bb/2022/03/11/Sourced-Data-Transfer-1.1-1.png https://d2908q01vomqb2.cloudfront.net/77de68daecd823babbb58e...

by ary 4y ago

jamesblonde 4y ago

That's your experience. We had a global network operator talk to us about repatriating its ML workloads on-premises from Azure. Cost is the main factor, sure.

gumby 4y ago
Azure has an on prem version to facilitate (and monetize) that transition. I don’t like Azure and won’t use them again but this seems like a smart approach for MS to take.

bklyn11201 4y ago

Even with the discounts, savings plans, multi-year commit discounts, etc., the cloud costs are absolutely absurd if you are running stable applications where you understand the future growth, use, and demand. Yes, the cloud is the right place for 99% of apps out there, but the market is sending a clear objective out to all tech companies: become profitable and build a sustainable, high margin on your products. Every maturing company with predictable products must be exploring ways to move workloads out of the cloud. AWS took your margin and isn't giving it back. https://a16z.com/2021/05/27/cost-of-cloud-paradox-market-cap-cloud-lifecycle-scale-growth-repatriation-optimization/ https://a16z.com/2021/05/27/cost-of-cloud-paradox-market-cap...

wmfiv 4y ago
Dropbox (from the a16z article) to me is the exception that proves the point. What percentage of COGS is your cloud/infstracture spend? If your products don't look like cloud infrastructure (aka Dropbox), it better be very small. If you think cloud is costing you 1000% what it would cost on-premise, that's almost certainly a spend and architectural discipline problem, not a cloud problem.
- marcosdumay 4y ago
  Hum... A 1000% overhead looks typical to me. Whether that's an important saving or not changes from business to business, but anything less than 1000% seems only achievable by customized discounts from the cloud provider.
  - throwaway894345 4y ago
    I feel like this is comparing some cost-optimized on-prem scenario with a "idgaf, I'm prioritizing growth over cost savings" cloud scenario. Every company I've worked at has been way more concerned with growth to the point that the cloud spend is wildly careless, but we could easily reduce it by a factor of 10 with dramatically less effort than it would take to move on prem.
    - deleted 4y ago
      [deleted]
- cplusplusfellow 4y ago
  Is saving 50% also a worthwhile goal at expense of being on prem, and all the downsides? Asking honestly because that’s where my business is in terms of the decision. We won’t save 90% but we will save 45-55%.
  - mywittyname 4y ago
    Is your company experiencing rocketship growth or are you at the point where your growth has stabilized to a modest figure? It's probably best to pursue growth over cost savings, if possible. But not every company is in a position where a few more features can double revenue. Still, I think it's hard to justify going anti-cloud in an effort to cut costs. Without a very skilled and experienced team doing the migration, the end result is very likely to be some hybrid setup that's the worst of both worlds. Especially if you're using a managed service, the open source alternatives might not be the drop in replacement that they claim to be.

unity1001 4y ago

> (disclosure, I'm a founder at a cloud-cost management startup) Isnt it natural that your service gains more users at this time when everyone is trying to cut down on cloud costs... Cloud usage may be declining, but those who are still using it would want to cut costs...

red-iron-pine 4y ago

There is still a lot of momentum because the 2nd and 3rd wave have yet to be burned. Pre-COVID I was a at a F500 that had gotten screwed pretty hard by an Azure deployment than ended up costing TONS more than anticipated. Even after we made it clear it would be a lot of OpEx. "Sales engineers gonna play games" -- and they did. New gig is just going down that path, and is, go figure, seeing the same problems. Burned by Azure, and now getting bilked for every last dollar by GCP.

izacus 4y ago
Also don't underestimate the resistance of employees who built their careers only ever knowing how to do cloud - they'll make sure the cost reports and plans are always doctored in a way that cloud wins because that's the only way they know how to do their job.
- red-iron-pine 4y ago
  > Also don't underestimate the resistance of employees who built their careers only ever knowing how to do cloud - they'll make sure the cost reports and plans are always doctored in a way that cloud wins because that's the only way they know how to do their job. Seconded. We called in Accenture to tell us if we should do the cloud. They said Yes. I was on the Solutions & Architecture team, and we asked to take a look at their numbers. Found multiple errors in their spreadsheets. Math being straight up incorrect, or calling out pricing that didn't match what our SaaS sales guys gave us. "Oh they're old reports". Okay fine, run them again with the new numbers, and slap the recent graduate who you forced to make this excel. Again, the numbers came back strongly in favor of Azure. Took a look again, this time had some fruity macro and pivot table, and we couldn't clearly make out what they did to get their final $$$ figures. 3 months later we declared we were "cloud first". There was much speculation as to how much $$$ the directors and VPs got. In a different life I was in sales engineering and there was an unspoken rule about "referral agent fees" to 3rd parties who help us close deals...
  - jbverschoor 4y ago

hinkley 4y ago

It's often been the case that the late adopters of the Adoption Cycle show up after the early adopters have moved onto the next adoption cycle. With computers it's also usually the case that the Late Adopters show up in the middle of the Trough of Disillusionment of the Hype Cycle. It takes a long time for new trends to percolate through the management class. I had a gruff old engineer at an early job who used to joke that one of the executives must have gone in for a dentist appointment and read the 5 year old tech magazines in the waiting room, because we have a new initiative to start doing something that other people are already stopping.

andrewstuart 4y ago

Here is the truly mind blowing map of how you are charged on AWS: https://d2908q01vomqb2.cloudfront.net/77de68daecd823babbb58edb1c8e14d7106e83bb/2022/03/11/Sourced-Data-Transfer-1.1-1.png https://d2908q01vomqb2.cloudfront.net/77de68daecd823babbb58e...