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Hmm. First, my sentence had started with a typo. Depending on the jurisdiction (this seems to be common), equipment can be written off at a faster depreciatio

by j45 2y ago

Hmm. First, my sentence had started with a typo. Depending on the jurisdiction (this seems to be common), equipment can be written off at a faster depreciation schedule than it's been kept or used for. In that way, writing off is often one part maximizing depreciation schedule (to "write it off" as an asset in you business as quick as possible), and another part is how long does it take. Insert stereotype of bean-counting and propellers-spinning. This means it's perfectly possible to use equipment after it's been written off, and be in a position to re-purchase it when it fails. Spreadsheets can be a disease this way, written for the single scenario it's evaluating and not entirely enough scenarios or forecasts. We should assume multi-billion dollar clouds do not use single spreadsheets to understand how they make 5-10x (or higher) off the same server resources by selling them as individual API calls. The markup on cloud services can be so astronomically high, having been around data centre hosting for your own bare metal servers, virtualized servers, going to the cloud 1000% and now realizing it's gotten much easier to self host personally, and professionally (with experience). The assumptions of why one might use a cloud originate with the update of the cloud and remain anchored there, regardless of the changes and evolutions in place.

vidarh 2y ago
Sure, but again, the accounting write-off period is entirely orthogonal to how you choose to calculate your break-even point, so the accounting write-off period is really a distraction. But the "default" of 3 years is often used without much thought when customers of the cloud providers evaluate pricing, and so for the cloud providers it makes sense to make themselves look plausibly competitive when customers look at the numbers that way. A lot of the other markup is obscured by splitting things into multiple categories, such as costs per requests, separate pricing for bandwidth etc. A lot of clients I talk to don't understand the pricing of the services they run, and the developers usually both don't know and don't care.

by j45 2y ago

vidarh 2y ago

Sure, but again, the accounting write-off period is entirely orthogonal to how you choose to calculate your break-even point, so the accounting write-off period is really a distraction. But the "default" of 3 years is often used without much thought when customers of the cloud providers evaluate pricing, and so for the cloud providers it makes sense to make themselves look plausibly competitive when customers look at the numbers that way. A lot of the other markup is obscured by splitting things into multiple categories, such as costs per requests, separate pricing for bandwidth etc. A lot of clients I talk to don't understand the pricing of the services they run, and the developers usually both don't know and don't care.