3 ms·

My company is on prem, spending north of 1 billion per year. Cloud is actually cheaper when considering total cost of ownership. Thats salaries, opex, capex cos

by bushbaba 11mo ago

My company is on prem, spending north of 1 billion per year. Cloud is actually cheaper when considering total cost of ownership. Thats salaries, opex, capex costs. Worse, our speed to delivery is generally worse. Because on prem is inelastic, we are at sub 10% peak utilization of compute resources. If we added in the likely higher cloud utilization rate we are talking of 30%+ savings from on prem.

bakies 11mo ago
> we are at sub 10% peak utilization of compute resources so... you bought way too much hardware?
- stackskipton 11mo ago
  That's not unusual. First off, sometimes 1000 extra dollars will get you a ton more compute you need so why not and second, on prem tends to be extremely inelastic so you buy a ton of compute because you never know when compute requirements change.
  - bakies 11mo ago
    If we're talking on the scale of $1,000s then it's cheaper to run on-prem than in the cloud. It's really easy to spend $1,000 on managed kubernetes and have very little actual compute.
ecshafer 11mo ago
Peak Utilization is a tough one for on prem and is a decent argument for cloud. I was at a company that was also at <10% peak utilization most of the time. It was finance, so it was mostly doing nothing, except for the couple days a year where we shot up 10000x, so we had to build for that case. So yeah losing the data centers, and cloud was a cost savings.
- senderista 11mo ago
  So the "obvious" (but complex!) solution is a "hybrid cloud": use on-prem for the predictable, constant "DC component" of your demand, and use cloud for cyclical or unpredictable demand changes. That will keep peak demand decoupled from permanently provisioned capacity while saving on always-utilized capacity. Easier said than done, of course.
  - ecshafer 11mo ago
    The route we ended up going, was hybrid cloud with a colocation for on-prem (Mainframes and a few servers), and then AWS for the cloud portion. Not sure on what the cost savings were. As I wrote the authentication service I knew what those numbers were, so I knew that on a normal day we would be sitting at 1% cpu usage basically all day except market open/close. And then fiscal quarter ends were a big bump. And then of course big news days. 99% of the time for 99% of the days were just nothing.
  - senorrib 11mo ago
    K8s helps reduce that complexity a lot.
pyrale 11mo ago
My comparison was cloud vs renting metal, not buying your own machines.

bakies 11mo ago

> we are at sub 10% peak utilization of compute resources so... you bought way too much hardware?

stackskipton 11mo ago
That's not unusual. First off, sometimes 1000 extra dollars will get you a ton more compute you need so why not and second, on prem tends to be extremely inelastic so you buy a ton of compute because you never know when compute requirements change.
- bakies 11mo ago
  If we're talking on the scale of $1,000s then it's cheaper to run on-prem than in the cloud. It's really easy to spend $1,000 on managed kubernetes and have very little actual compute.

ecshafer 11mo ago

Peak Utilization is a tough one for on prem and is a decent argument for cloud. I was at a company that was also at <10% peak utilization most of the time. It was finance, so it was mostly doing nothing, except for the couple days a year where we shot up 10000x, so we had to build for that case. So yeah losing the data centers, and cloud was a cost savings.

senderista 11mo ago
So the "obvious" (but complex!) solution is a "hybrid cloud": use on-prem for the predictable, constant "DC component" of your demand, and use cloud for cyclical or unpredictable demand changes. That will keep peak demand decoupled from permanently provisioned capacity while saving on always-utilized capacity. Easier said than done, of course.
- ecshafer 11mo ago
  The route we ended up going, was hybrid cloud with a colocation for on-prem (Mainframes and a few servers), and then AWS for the cloud portion. Not sure on what the cost savings were. As I wrote the authentication service I knew what those numbers were, so I knew that on a normal day we would be sitting at 1% cpu usage basically all day except market open/close. And then fiscal quarter ends were a big bump. And then of course big news days. 99% of the time for 99% of the days were just nothing.
- senorrib 11mo ago
  K8s helps reduce that complexity a lot.

pyrale 11mo ago

My comparison was cloud vs renting metal, not buying your own machines.