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I see this regularly in large enterprise. My favourite example is getting a 20-30% discount on rack-mount server hardware purchased up-front for the next 3 to 5

I see this regularly in large enterprise. My favourite example is getting a 20-30% discount on rack-mount server hardware purchased up-front for the next 3 to 5 years of growth requirements. Invariably, the executives that signed this "great deal" treat themselves to a champagne lunch to celebrate the savings. Never mind that most of that capacity will sit around unused for years. The real problem is that by the time they get around to filling the last half of the capacity, the exponential march of Moore's law -- or the equivalents for storage and networking -- will have discounted the cost of that capacity by 50% or more anyway. Similarly, I saw a corporation "lock in" a sweet discount for the WAN network provider for 7 years where they got an upgrade from 1 Mbps to 2 Mbps and a discount of 40%. At the same time, residential broadband was already 25 Mbps minimum and business-grade fibre had three-digit Mbps speeds within months. The sales rep that got that deal signed probably laughed his ass off. It's a fundamental misunderstanding that it's easier or better to purchase things in big stair-step increments when following an exponential curve. The waste will be exponentially higher the longer the steps. Ideally, one would want to purchase hardware in the smallest possible time-steps, following product release cycles exactly. That's one of the benefits of the public cloud, you can switch CPUs (or whatever) with a button-press. The example of this that's burned into my mind is that a vendor (Dell or HPE, I can't remember) convinced a government department to buy a 48-core AMD EPYC server for bioinformatics. This is one of those problems where you want the biggest possible single box because of the way the algorithms scale ("up", not "out"). They're stuck with that box for the next five or so years. Meanwhile the cloud public cloud is making available these monsters: https://techcommunity.microsoft.com/blog/azurehighperformancecomputingblog/announcing-azure-hbv5-virtual-machines-a-breakthrough-in-memory-bandwidth-for-hp/4303504 https://techcommunity.microsoft.com/blog/azurehighperformanc... Check out that beautiful exponential curve! If you "lock in" just 2 or 3 generations back, you're missing out on 90% of what you could be using.

maxbond 1y ago
As a point of information (I don't disagree with anything you've said), just because public clouds advertise a gigantic instance type doesn't necessarily mean you can provision it. I saw a situation at work once where the ML researchers couldn't figure out why they were failing to provision a box. The request would be pending for a few hours before failing. AWS eventually said they simply didn't have the capacity in that AZ, and it was unlikely to ever succeed.
- jiggawatts 1y ago
  Conversely, if you're in some co-location facility and they run out of space/cooling/power, then you might be painted into a very small corner for an extended period. This happened to several government customers because they all shared a common facility. Entire departments were squeezing blood from a stone because they had an iron rule that "no more servers", not even VMs... for years. In the public cloud, you can almost always just pick another AZ, another region, or another SKU. Because of how Spot priced compute works, a PayG customer will essentially always be able to provision something, somewhere.
protocolture 1y ago
>Similarly, I saw a corporation "lock in" a sweet discount for the WAN network provider for 7 years where they got an upgrade from 1 Mbps to 2 Mbps and a discount of 40%. At the same time, residential broadband was already 25 Mbps minimum and business-grade fibre had three-digit Mbps speeds within months. The sales rep that got that deal signed probably laughed his ass off. Its actually one of the least bad ISP business models. Its fantastic for capacity planning. I worked for an ISP that got a lot of businesses signed up on 700 buck per month EOC services, 4-5 year terms, before the NBN rolled out and provided 20 times the bandwidth for 50 bucks. Thing is, when the NBN passed those customers, they would reach out and try and move them sideways. Extend the contract for 2 years, drop 700 bucks down to 400 and bundle in voice and managed router services. Add in fixed wireless for backup. Offer them 100M business fibre for a transition up to 1k/ month. An ISP that can do this can afford service techs, upgrades, more peering and transit. It can breathe. Trying to sell a 40 dollar TC-4 NBN service for 42 dollars is a losing proposition. The customer feels good when they get a good deal but they lose out when the ISP starts downsizing or crawling back costly transit. And if its month to month, the constant churn is crazy.

maxbond 1y ago

As a point of information (I don't disagree with anything you've said), just because public clouds advertise a gigantic instance type doesn't necessarily mean you can provision it. I saw a situation at work once where the ML researchers couldn't figure out why they were failing to provision a box. The request would be pending for a few hours before failing. AWS eventually said they simply didn't have the capacity in that AZ, and it was unlikely to ever succeed.

jiggawatts 1y ago
Conversely, if you're in some co-location facility and they run out of space/cooling/power, then you might be painted into a very small corner for an extended period. This happened to several government customers because they all shared a common facility. Entire departments were squeezing blood from a stone because they had an iron rule that "no more servers", not even VMs... for years. In the public cloud, you can almost always just pick another AZ, another region, or another SKU. Because of how Spot priced compute works, a PayG customer will essentially always be able to provision something, somewhere.

protocolture 1y ago

>Similarly, I saw a corporation "lock in" a sweet discount for the WAN network provider for 7 years where they got an upgrade from 1 Mbps to 2 Mbps and a discount of 40%. At the same time, residential broadband was already 25 Mbps minimum and business-grade fibre had three-digit Mbps speeds within months. The sales rep that got that deal signed probably laughed his ass off. Its actually one of the least bad ISP business models. Its fantastic for capacity planning. I worked for an ISP that got a lot of businesses signed up on 700 buck per month EOC services, 4-5 year terms, before the NBN rolled out and provided 20 times the bandwidth for 50 bucks. Thing is, when the NBN passed those customers, they would reach out and try and move them sideways. Extend the contract for 2 years, drop 700 bucks down to 400 and bundle in voice and managed router services. Add in fixed wireless for backup. Offer them 100M business fibre for a transition up to 1k/ month. An ISP that can do this can afford service techs, upgrades, more peering and transit. It can breathe. Trying to sell a 40 dollar TC-4 NBN service for 42 dollars is a losing proposition. The customer feels good when they get a good deal but they lose out when the ISP starts downsizing or crawling back costly transit. And if its month to month, the constant churn is crazy.