4 ms·

It's horrifyingly hard to convince people of this, though, even you can present them with actual numbers. A lot of people have convinced themselves that cloud

by vidarh 2y ago

It's horrifyingly hard to convince people of this, though, even you can present them with actual numbers. A lot of people have convinced themselves that cloud is cheap, to the point that they don't even do a cursory investigation. A lot of those even don't do the bare minimum to reduce hosting costs within the cloud they choose, or choose one of the cheaper clouds (AWS is absolutely extortionate for anything that requires significant amount of outbound bandwith), or put caching/CDN's in front (you can trivially slash your AWS egress costs dramatically). Most of my consultancy work is on driving cost efficiencies for cloud, and I can usually safely guarantee the fee will pay for itself within months because people don't fix even the most low hanging fruit.

mbreese 2y ago
I think one business argument for cloud is capital expenses vs operational expenses. If you’re (over) paying for cloud resources vs an in house option (or colo), those are numbers that are a straight expense. When you own hardware, those are on your books until they depreciate off. For some businesses, that can make sense. Now, a good accountant probably wouldn’t care one way or the other. Debits and credits balance either way. And spending more still means less profit in the long term, no matter how it looks on the books. But, in addition to the flexibility, that was what I always thought of as the main cloud benefit. It’s the same with leasing vs buying cars/computers/etc…
- tialaramex 2y ago
  Cloud made sense for the startup I worked for previously. If you are a startup then a $1M per year expense makes much more sense than a $5M up front purchase with 5-10 years of life - in five years you might be billionaires or you might be bankrupt and until then the Cloud was better.
  - bitmasher9 2y ago
    Cloud also makes sense with certain traffic patterns where peak requirements is a huge outlier but critical to satisfy.
    - mbreese 2y ago
      Or where locality is critical. Like if you have a game that hits peak traffic at different times throughout the day in different regions. So, a company may not want to own hardware in multiple regions, when they would only be at peak usage for a few hours.
      - vidarh 2y ago
        The variation in peak loads tends to be far smaller for most people than what they imagine, but indeed it can sometimes be cheaper. The window needs to be very short, though, to outweight the large cost differential. And you don't need to buy - you can rent.
        bitmasher9 2y ago
        I don’t think the window length is the key metric. It’s the ratio of time between peak traffic and normal traffic time
        vidarh 2y ago
        Yes, but in practice it's even rarer for people to have loads that have multiple spikes a day, to the point it's a rounding error you can mostly ignore outside of very unusual niches. Usually the day-night cycle entirely dominates in terms of traffic variations and is already long enough to make auto-scaling unviable in terms of cost. You're right that if the longest window is short enough to make autoscaling financially beneficial over managed hosting, then you also need to make sure that you don't regularly have other spikes that can tip things back to being unprofitable.
        dilyevsky 2y ago
        The classic case for this is Intuit which presumably needs most of its compute only two months a year. Not that many companies in the same boat though
  - winkeltripel 2y ago
    It feels like if you're spending 1M in cloud per year, the hardware and colo will probably cost 1M to buy.
  - sgarland 2y ago
    If your monthly cloud bill is < $100K, you don’t need $5MM worth of hardware. That cloud spend equates to, at best, a couple of beefy servers, which (modulo AI cards) could almost certainly be had for <= $50K/ea. So for $200K, you could have a two-zone setup. Where it does make sense in the short-term for this scenario is the experience and knowledge necessary to reliably run your own servers. If you don’t have that, you may not want to invest the time and effort to do so. But on pure cost, unless your bill is on the order of a few thousand per month, cloud will never win. It can’t; they have to make money.
  - vidarh 2y ago
    Or you could have rented or leased-to-own. There's hardly ever any need to actually purchase outright to get prices far below equivalent capacity in clouds. In fact, in 25 years, only one of the colo'd server setups I've worked on had any hardware purchased up-front in it.
  - dilyevsky 2y ago
    Like sibling is saying it's not $5M upfront but on the order of 1 year cloud spend for large enough accounts. There are also such things as leases and loans. One justifiable excuse is you simply don't know how much hardware you will need to buy if you're hitting hockeystick growth. That until you realize you can also go hybrid...
- NorwegianDude 2y ago
  You don't have to buy the hardware. It's very common to rent it.
- vidarh 2y ago
  But that too is based on people not knowing the alternatives, as renting managed servers can be close to a wash vs. leasing hardware for a colo (often to the point that relatively cost of land near your preferred managed hosting providers vs. colos that work with access to staff etc. might be what makes one or the other cheaper). Buying outright can be cheaper but isn't necessary. None of the colo'd setups I've worked on bar one used purchased servers - it's all been leased. But the majority of non-cloud workloads I've worked on have not even been leased, but rented.
tialaramex 2y ago
Periodically management says we shouldn't have a DC, just put everything in the cloud. OK says HPC, here's the quote for replacing one of the (currently three) supercomputers with a cloud service. Oh dear, that's bigger than your entire IT budget isn't it? So I guess we do need the DC for housing the supercomputers. If we'd done that once I'd feel like well management weren't to know, but it recurs with about a 3-5 year periodicity. The perception seems to be "Cloud exists, therefore it must be cheaper, because if it wasn't cheaper why would it exist?" which reminds me of how people persuade themselves the $50 "genuine Apple" part must be better because if it wasn't better than this $15 part why would Apple charge $50 for it? Because you are a sucker is why.
- paulcole 2y ago
  [flagged]
- azinman2 2y ago
  Apple may have markup, but the part is for sure more likely to be higher quality: https://www.cultofmac.com/news/apple-thunderbolt-4-cable-comparison-amazon-usb-c https://www.cultofmac.com/news/apple-thunderbolt-4-cable-com...
  - JimDabell 2y ago
    Same goes for Apple power adapters: https://news.ycombinator.com/item?id=28053398 https://news.ycombinator.com/item?id=28053398
- magicalhippo 2y ago
  > If we'd done that once I'd feel like well management weren't to know, but it recurs with about a 3-5 year periodicity. So basically every time management changes[1]? [1]: https://maexecsearch.com/average-c-suite-tenure-and-other-important-executive-facts/ https://maexecsearch.com/average-c-suite-tenure-and-other-im...
  - tialaramex 2y ago
diggan 2y ago
> A lot of people have convinced themselves that cloud is cheap I've noticed this too, freelancing/consulting around in companies. I'm not sure where this idea even comes from, because when cloud first started making the news, the reasoning went something like "We're OK paying more since it's flexible, so we can scale up/down quickly", and that made sense. But somehow today a bunch of people (even engineers) are under the belief that cloud somehow is cheaper than the alternatives. That never made sense to me, even when you take into account hiring people specifically for running the infrastructure, unless you're a one-person team or have to aggressively scale up/down during a normal day.
- SteveNuts 2y ago
  > paying more since it's flexible, so we can scale up/down quickly I’ve heard this argument too and I think I’ve seen exactly one workload where it actually made sense and was tuned properly and worked reliably.
- bostik 2y ago
  I can provide an example where cloud, despite its vastly higher unit costs, makes sense. Analytics in high finance (note: not HFT). Disclosure: my employer provides systems for that. A fair number of our clients routinely spin up workloads that are CPU bound on hundreds-to-thousands of nodes. These workloads can be EXTREMELY spiky, with a baseload for routine background jobs needing maybe 3-4 worker nodes, but with peak uses generating demand for something like 2k nodes, saturating all cores. These peak uses also tend to be relatively time sensitive, to the point where having to wait two extra minutes for a result has real business impact. So our systems spin up capacity as needed, and once the load subsides, terminates unused nodes. After all, new ones can be brought up at will. When the peak loads are high (& short) enough, and the baseload low enough, the elastic nature of cloud systems has merit. I would note that these are the types of clients who will happily absorb the cross-zone networking costs to ensure they have highly available, cross-zone failover scenarios covered. (Eg. have you ever done the math on just how much a busy cross-zone Kafka cluster generates in zonal egress costs?) They will still crunch the numbers to ensure that their transient workload pools have sufficient minimum capacity to service small calculations without pre-warm delay, while only running at high(er) capacity when actually needed. Optimising for availability of live CPU seconds can be a ... fascinating problem space.
graemep 2y ago
For smaller businesses it seems to be its the safe option because its what everyone does. I have even had it suggested that it might make selling a business or attracting investors harder if you used your own servers (not at the scale of having your own datacentre, just rented servers - smaller businesses still). Another thing that comes up is that it might be more expensive but its a small fraction of operational expenses so no one really cares.
- whstl 2y ago
  For smaller businesses it's often "the only thing Joe knew when he was building it".
jinjin2 2y ago
Yes. We saved ridiculous amounts of money (and made it a lot faster) by moving our analytics workloads from Snowflake to a few bare-metal nodes running Exasol. But it took months to convince management even though we had clear numbers showing the sheer magnitude of the cost reduction. They had drunk the cloud kool-aid, and were adamant that it would be cheaper, numbers be damned.
j45 2y ago
You have a great point about finding cost efficiencies - there was a time cloud was cheaper. Maybe it's an understanding that doesn't change because the decision makers were non-techincal people (when finance oversees IT despite not understanding it) Virtualizing and then sharing a dedicated server as a VPS was a big step forward. Only, hardware kept getting cheaper and faster, as well as internet.
- vidarh 2y ago
  > when finance oversees IT despite not understanding it ... and when IT often do not even get to see the spend, and/or isn't expected to. I've had clients where only finance had permissions to get at the billing reports, and engineering only ever saw the billing data when finance were sufficiently shocked by a bill to ask them to dig into it - at which point they cared for long enough to get finance off their backs, and then stopped caring again.
  - j45 2y ago
    Unsure how I missed this. Great points. Overseeing things they don’t understand and wanting to manage and direct it feels unnatural for finance to do to other departments. Maybe this was more common for businesses with stable business processes that aren’t evolving. Covid and now AI will ensure change is constant and where a practice is outdated so will the organizations become.
ksec 2y ago
Partly because AWS give out a lot of free credit for start ups, and basically allow them to grow without planning any infrastructure. VCs who are invested into Amazon also wants to push the cloud narrative. Starts up who dont want to deal with servers, want massive scale when they think the website and later an app went viral. That was in the late 00s and early 10s. PHP, Python, Ruby and even Java were slow. Every single language and framework has had massive performance improvements in the past 15 to 20 years. Anywhere from Java 2x to Ruby 3 - 10x. When a server max out at 6 - 8 with Xeon core, compare to today at 192 Core. Every Core is at leats 2 - 3x faster per clock, with higher clock speed we are talking about 100x difference. Especially when IO used to be on HDD, SSD is easily 1000x faster. What used to wait for I/O is no longer an issue, the aggregate difference when all things added together including software could be 300x to 500x. What you would need 500 2U server in 2010, you could now do it in one. Modern web developers are so abstracted with hardware I dont think many realise what sort of difference in hardware improvements. I remember someone posted before 2016 Basecamp had dozens of Racks before moving to cloud. Now they have grown a lot bigger with Hey and they are only doing it with 8 racks and room to spare. AWS on the other hand is trying to move more workload to ARM Graviton where they have a cost advantage. Given Amazon's stock price are now dependent on AWS, I dont think they will lower their price by much in the future. And we desperately need some competition in that area.

by vidarh 2y ago

mbreese 2y ago

I think one business argument for cloud is capital expenses vs operational expenses. If you’re (over) paying for cloud resources vs an in house option (or colo), those are numbers that are a straight expense. When you own hardware, those are on your books until they depreciate off. For some businesses, that can make sense. Now, a good accountant probably wouldn’t care one way or the other. Debits and credits balance either way. And spending more still means less profit in the long term, no matter how it looks on the books. But, in addition to the flexibility, that was what I always thought of as the main cloud benefit. It’s the same with leasing vs buying cars/computers/etc…

tialaramex 2y ago
Cloud made sense for the startup I worked for previously. If you are a startup then a $1M per year expense makes much more sense than a $5M up front purchase with 5-10 years of life - in five years you might be billionaires or you might be bankrupt and until then the Cloud was better.
- bitmasher9 2y ago
  Cloud also makes sense with certain traffic patterns where peak requirements is a huge outlier but critical to satisfy.
  - mbreese 2y ago
    Or where locality is critical. Like if you have a game that hits peak traffic at different times throughout the day in different regions. So, a company may not want to own hardware in multiple regions, when they would only be at peak usage for a few hours.
    - vidarh 2y ago
      The variation in peak loads tends to be far smaller for most people than what they imagine, but indeed it can sometimes be cheaper. The window needs to be very short, though, to outweight the large cost differential. And you don't need to buy - you can rent.
      - bitmasher9 2y ago
        I don’t think the window length is the key metric. It’s the ratio of time between peak traffic and normal traffic time
        vidarh 2y ago
        Yes, but in practice it's even rarer for people to have loads that have multiple spikes a day, to the point it's a rounding error you can mostly ignore outside of very unusual niches. Usually the day-night cycle entirely dominates in terms of traffic variations and is already long enough to make auto-scaling unviable in terms of cost. You're right that if the longest window is short enough to make autoscaling financially beneficial over managed hosting, then you also need to make sure that you don't regularly have other spikes that can tip things back to being unprofitable.
      - dilyevsky 2y ago
        The classic case for this is Intuit which presumably needs most of its compute only two months a year. Not that many companies in the same boat though
- winkeltripel 2y ago
  It feels like if you're spending 1M in cloud per year, the hardware and colo will probably cost 1M to buy.
- sgarland 2y ago
  If your monthly cloud bill is < $100K, you don’t need $5MM worth of hardware. That cloud spend equates to, at best, a couple of beefy servers, which (modulo AI cards) could almost certainly be had for <= $50K/ea. So for $200K, you could have a two-zone setup. Where it does make sense in the short-term for this scenario is the experience and knowledge necessary to reliably run your own servers. If you don’t have that, you may not want to invest the time and effort to do so. But on pure cost, unless your bill is on the order of a few thousand per month, cloud will never win. It can’t; they have to make money.
- vidarh 2y ago
  Or you could have rented or leased-to-own. There's hardly ever any need to actually purchase outright to get prices far below equivalent capacity in clouds. In fact, in 25 years, only one of the colo'd server setups I've worked on had any hardware purchased up-front in it.
- dilyevsky 2y ago
  Like sibling is saying it's not $5M upfront but on the order of 1 year cloud spend for large enough accounts. There are also such things as leases and loans. One justifiable excuse is you simply don't know how much hardware you will need to buy if you're hitting hockeystick growth. That until you realize you can also go hybrid...
NorwegianDude 2y ago
You don't have to buy the hardware. It's very common to rent it.
vidarh 2y ago
But that too is based on people not knowing the alternatives, as renting managed servers can be close to a wash vs. leasing hardware for a colo (often to the point that relatively cost of land near your preferred managed hosting providers vs. colos that work with access to staff etc. might be what makes one or the other cheaper). Buying outright can be cheaper but isn't necessary. None of the colo'd setups I've worked on bar one used purchased servers - it's all been leased. But the majority of non-cloud workloads I've worked on have not even been leased, but rented.

tialaramex 2y ago

Periodically management says we shouldn't have a DC, just put everything in the cloud. OK says HPC, here's the quote for replacing one of the (currently three) supercomputers with a cloud service. Oh dear, that's bigger than your entire IT budget isn't it? So I guess we do need the DC for housing the supercomputers. If we'd done that once I'd feel like well management weren't to know, but it recurs with about a 3-5 year periodicity. The perception seems to be "Cloud exists, therefore it must be cheaper, because if it wasn't cheaper why would it exist?" which reminds me of how people persuade themselves the $50 "genuine Apple" part must be better because if it wasn't better than this $15 part why would Apple charge $50 for it? Because you are a sucker is why.

paulcole 2y ago
[flagged]
azinman2 2y ago
Apple may have markup, but the part is for sure more likely to be higher quality: https://www.cultofmac.com/news/apple-thunderbolt-4-cable-comparison-amazon-usb-c https://www.cultofmac.com/news/apple-thunderbolt-4-cable-com...
- JimDabell 2y ago
  Same goes for Apple power adapters: https://news.ycombinator.com/item?id=28053398 https://news.ycombinator.com/item?id=28053398
magicalhippo 2y ago
> If we'd done that once I'd feel like well management weren't to know, but it recurs with about a 3-5 year periodicity. So basically every time management changes[1]? [1]: https://maexecsearch.com/average-c-suite-tenure-and-other-important-executive-facts/ https://maexecsearch.com/average-c-suite-tenure-and-other-im...
- tialaramex 2y ago

diggan 2y ago

> A lot of people have convinced themselves that cloud is cheap I've noticed this too, freelancing/consulting around in companies. I'm not sure where this idea even comes from, because when cloud first started making the news, the reasoning went something like "We're OK paying more since it's flexible, so we can scale up/down quickly", and that made sense. But somehow today a bunch of people (even engineers) are under the belief that cloud somehow is cheaper than the alternatives. That never made sense to me, even when you take into account hiring people specifically for running the infrastructure, unless you're a one-person team or have to aggressively scale up/down during a normal day.

SteveNuts 2y ago
> paying more since it's flexible, so we can scale up/down quickly I’ve heard this argument too and I think I’ve seen exactly one workload where it actually made sense and was tuned properly and worked reliably.
bostik 2y ago
I can provide an example where cloud, despite its vastly higher unit costs, makes sense. Analytics in high finance (note: not HFT). Disclosure: my employer provides systems for that. A fair number of our clients routinely spin up workloads that are CPU bound on hundreds-to-thousands of nodes. These workloads can be EXTREMELY spiky, with a baseload for routine background jobs needing maybe 3-4 worker nodes, but with peak uses generating demand for something like 2k nodes, saturating all cores. These peak uses also tend to be relatively time sensitive, to the point where having to wait two extra minutes for a result has real business impact. So our systems spin up capacity as needed, and once the load subsides, terminates unused nodes. After all, new ones can be brought up at will. When the peak loads are high (& short) enough, and the baseload low enough, the elastic nature of cloud systems has merit. I would note that these are the types of clients who will happily absorb the cross-zone networking costs to ensure they have highly available, cross-zone failover scenarios covered. (Eg. have you ever done the math on just how much a busy cross-zone Kafka cluster generates in zonal egress costs?) They will still crunch the numbers to ensure that their transient workload pools have sufficient minimum capacity to service small calculations without pre-warm delay, while only running at high(er) capacity when actually needed. Optimising for availability of live CPU seconds can be a ... fascinating problem space.

graemep 2y ago

For smaller businesses it seems to be its the safe option because its what everyone does. I have even had it suggested that it might make selling a business or attracting investors harder if you used your own servers (not at the scale of having your own datacentre, just rented servers - smaller businesses still). Another thing that comes up is that it might be more expensive but its a small fraction of operational expenses so no one really cares.

whstl 2y ago
For smaller businesses it's often "the only thing Joe knew when he was building it".

jinjin2 2y ago

Yes. We saved ridiculous amounts of money (and made it a lot faster) by moving our analytics workloads from Snowflake to a few bare-metal nodes running Exasol. But it took months to convince management even though we had clear numbers showing the sheer magnitude of the cost reduction. They had drunk the cloud kool-aid, and were adamant that it would be cheaper, numbers be damned.

j45 2y ago

You have a great point about finding cost efficiencies - there was a time cloud was cheaper. Maybe it's an understanding that doesn't change because the decision makers were non-techincal people (when finance oversees IT despite not understanding it) Virtualizing and then sharing a dedicated server as a VPS was a big step forward. Only, hardware kept getting cheaper and faster, as well as internet.

vidarh 2y ago
> when finance oversees IT despite not understanding it ... and when IT often do not even get to see the spend, and/or isn't expected to. I've had clients where only finance had permissions to get at the billing reports, and engineering only ever saw the billing data when finance were sufficiently shocked by a bill to ask them to dig into it - at which point they cared for long enough to get finance off their backs, and then stopped caring again.
- j45 2y ago
  Unsure how I missed this. Great points. Overseeing things they don’t understand and wanting to manage and direct it feels unnatural for finance to do to other departments. Maybe this was more common for businesses with stable business processes that aren’t evolving. Covid and now AI will ensure change is constant and where a practice is outdated so will the organizations become.

ksec 2y ago

Partly because AWS give out a lot of free credit for start ups, and basically allow them to grow without planning any infrastructure. VCs who are invested into Amazon also wants to push the cloud narrative. Starts up who dont want to deal with servers, want massive scale when they think the website and later an app went viral. That was in the late 00s and early 10s. PHP, Python, Ruby and even Java were slow. Every single language and framework has had massive performance improvements in the past 15 to 20 years. Anywhere from Java 2x to Ruby 3 - 10x. When a server max out at 6 - 8 with Xeon core, compare to today at 192 Core. Every Core is at leats 2 - 3x faster per clock, with higher clock speed we are talking about 100x difference. Especially when IO used to be on HDD, SSD is easily 1000x faster. What used to wait for I/O is no longer an issue, the aggregate difference when all things added together including software could be 300x to 500x. What you would need 500 2U server in 2010, you could now do it in one. Modern web developers are so abstracted with hardware I dont think many realise what sort of difference in hardware improvements. I remember someone posted before 2016 Basecamp had dozens of Racks before moving to cloud. Now they have grown a lot bigger with Hey and they are only doing it with 8 racks and room to spare. AWS on the other hand is trying to move more workload to ARM Graviton where they have a cost advantage. Given Amazon's stock price are now dependent on AWS, I dont think they will lower their price by much in the future. And we desperately need some competition in that area.