4 ms·

I wonder how long it will take the software industry to re-learn the 2010s lesson, that basing your entire business on (and in this case, firing half of your em

I wonder how long it will take the software industry to re-learn the 2010s lesson, that basing your entire business on (and in this case, firing half of your employees and replacing them with) another company’s API is a bad business decision

santoshalper 6mo ago
I am not sure how many people learned it the first time. To be fair, it's really hard to build a business without major dependencies. The key is to assume they will fail and have alternatives available.
- tosti 6mo ago
  It's not like risk management isn't thoroughly researched and studied already
AlfredBarnes 6mo ago
Is it important to be that self reliant? I wasn't in the workforce then, so I assume if you have an outsourced system with 99% reliability it would be an acceptable risk. Not sure if any AI system will reach that level, but for potential gains it could be worth it.
- digitaltrees 6mo ago
  Former cofounder had a $60 million ARR payment platform on a big company. They saw the success and kicked them off the api and built the same product. Now it’s billions on there public filing income statement.
binyu 6mo ago
Frontier models being in the hands of a handful companies does not help either. Let's hope that the open weight movement changes that soon.
- serf 6mo ago
  realistically any 'huge' frontier model that takes a rack of H100s to infer against is probably going to have downtime no matter who runs it. downtime is always going to 'scale' poorly against loads that require a lot of hardware thrown at them, even with lots of good fail-over -- probably worse for the small vendors because they don't have the contracts supplying them with hardware first so availability is already at a premium for them. so, I guess i'm saying yeah I hope frontier-level-models get out soon in the open arenas, but I suspect the same or similar level of exclusivity will exist as long as they take that much compute to operate.
- kristianc 6mo ago
  If it goes as well as the 'open' / federated social network alternatives of the 2010s, I wouldn't count on it.
  - amarant 6mo ago
    Social networks are 100% network effect. AI models are not really effected by that at all. Which doesn't mean the open models will definitely succeed, it just means they have more of a shot than the open social networks ever did
    - kristianc 6mo ago
      >AI models are not really effected by that at all. I don't know about that. More usage means more support, which means more docs and open source projects, wrappers, harnesses built around them etc. Way less demand to build tooling around open weight models if they remain hobbyist.
      - andoando 6mo ago
        The big thing is here is more training and that comes in two flavors: 1. Using AI helps as part of the training process. 2. All the prompts going to openai/claude is a gold mine.
- 6mo ago
nunodonato 6mo ago
we have a big dependency on AI, both for developers (can survive without it, mostly habits) and internal workflows (very hard to go without it). So we decided to unplug from cloud AI, rent our own GPU and use an open model for both scenarios. We have been very happy with it so far, 60% cheaper and around 50% faster
- scottyah 6mo ago
  Faster in what way? All the open models we have access to at work are very noticeably behind the frontier models to the point where it's usually faster to not use them at all.
  - shimman 6mo ago
    Faster in which you probably don't have to make so many network requests.
  - nunodonato 6mo ago
    No, its way way faster than Claude
- htrp 6mo ago
  why not an inbetween scenario like using a managed inference provider to host your own models?
  - nunodonato 6mo ago
    what would be the advantage?
cortesoft 6mo ago
What makes you say it is a bad business decision? It seems to be a fine decision to make for things like AWS, since when it goes down, a ton of websites go down and no one blames the site. There is no way to know whether it is a good or bad business decision just because they can go down when a third party goes down. For example, if you save $50 million a year by firing half your employees and replacing them with AI, but you lose $10 million a year because your site goes down when Claude goes down, then you made a great business decision.
- iugtmkbdfil834 6mo ago
  Oddly, I do not think you are wrong. In a pure money calculus exercise, this seems like a no brainer. Naturally, the math gets iffy the moment we are trying to capture something less tangible like 'customer may get sufficiently annoyed to drop us altogether' or 'we are no longer a respected company' or what MBAs would call 'unexpected goodwill extraction'. I honestly don't care nearly as much as I used to, because I used to be more upset over this. Now, I simply wait to see how much is enough to rile up average Joe and Jenna.
- graemep 6mo ago
  On the other hand a competitor site that is up (or bricks and mortar competitors) might get a lot of business when AWS goes down. If you depend on AWS for operations it might be a lot more expensive than that. Mostly I think its that management does not blame the person who picks AWS. Its another iteration of "no one got fired for buying IBM/Microsoft". It is also an issue at other levels: if all a county's businesses rely on AWS (let alone its government) then that gives the US huge leverage over you (sanctions would shut down your economy).
  - skywhopper 6mo ago
    That would require AWS to actually be down a lot, and it’s not. Betting your business on AWS being flakier than whatever alternative provider you use is probably not a good idea.
    - 6mo ago
deleted 6mo ago
[deleted]
dilyevsky 6mo ago
Lots of companies did that moving to cloud in 10s and it was generally a positive
- shimman 6mo ago
  Only if you think consolidation of the entire tech industry being funneled into a dozen or so companies as positive sure. Most of humanity doesn't think this, nor I doubt any devs like the current state of affairs where 4 companies dictate the direction of technology in this country.
  - dilyevsky 6mo ago
    Nobody dictates you anything - you’re welcome to setup your own dc if you wish to as some folks do. Not sure about “most of humanity” (lmao) but most of professionals in this line of work clearly don’t think it’s worth it for them
ravenstine 6mo ago
Corporate leaders don't learn lessons. They follow trends, chase growth, reduce the perception of risk, diffuse blame, get their business acquired, and exit with money bags in both hands. No learning from experience necessary.
altern8 6mo ago
Sorry, but what happened in 2010..?
- mbgerring 6mo ago
  The rise of the “programmable web,” internet companies offering “free” APIs on which businesses were built, and then destroyed when the company offering the API changed the terms or started charging for it. Twitter was a famous example, Facebook was a major culprit, Google offered a lot of free APIs that wreaked havoc like this, and many, many many smaller forgotten examples. “Web 2.0” was supposed to be a web of interoperable applications with features exposed by APIs, where you could assemble little pieces of functionality into new and novel configurations. It was cool for a little while, but it was never sustainable. There was an enclosure of the commons (they were never really the commons), and now we’re all digital serfs. It was a beautiful dream, while it lasted!

santoshalper 6mo ago

I am not sure how many people learned it the first time. To be fair, it's really hard to build a business without major dependencies. The key is to assume they will fail and have alternatives available.

tosti 6mo ago
It's not like risk management isn't thoroughly researched and studied already

AlfredBarnes 6mo ago

Is it important to be that self reliant? I wasn't in the workforce then, so I assume if you have an outsourced system with 99% reliability it would be an acceptable risk. Not sure if any AI system will reach that level, but for potential gains it could be worth it.

digitaltrees 6mo ago
Former cofounder had a $60 million ARR payment platform on a big company. They saw the success and kicked them off the api and built the same product. Now it’s billions on there public filing income statement.

binyu 6mo ago

Frontier models being in the hands of a handful companies does not help either. Let's hope that the open weight movement changes that soon.

serf 6mo ago
realistically any 'huge' frontier model that takes a rack of H100s to infer against is probably going to have downtime no matter who runs it. downtime is always going to 'scale' poorly against loads that require a lot of hardware thrown at them, even with lots of good fail-over -- probably worse for the small vendors because they don't have the contracts supplying them with hardware first so availability is already at a premium for them. so, I guess i'm saying yeah I hope frontier-level-models get out soon in the open arenas, but I suspect the same or similar level of exclusivity will exist as long as they take that much compute to operate.
kristianc 6mo ago
If it goes as well as the 'open' / federated social network alternatives of the 2010s, I wouldn't count on it.
- amarant 6mo ago
  Social networks are 100% network effect. AI models are not really effected by that at all. Which doesn't mean the open models will definitely succeed, it just means they have more of a shot than the open social networks ever did
  - kristianc 6mo ago
    >AI models are not really effected by that at all. I don't know about that. More usage means more support, which means more docs and open source projects, wrappers, harnesses built around them etc. Way less demand to build tooling around open weight models if they remain hobbyist.
    - andoando 6mo ago
      The big thing is here is more training and that comes in two flavors: 1. Using AI helps as part of the training process. 2. All the prompts going to openai/claude is a gold mine.
6mo ago

nunodonato 6mo ago

we have a big dependency on AI, both for developers (can survive without it, mostly habits) and internal workflows (very hard to go without it). So we decided to unplug from cloud AI, rent our own GPU and use an open model for both scenarios. We have been very happy with it so far, 60% cheaper and around 50% faster

scottyah 6mo ago
Faster in what way? All the open models we have access to at work are very noticeably behind the frontier models to the point where it's usually faster to not use them at all.
- shimman 6mo ago
  Faster in which you probably don't have to make so many network requests.
- nunodonato 6mo ago
  No, its way way faster than Claude
htrp 6mo ago
why not an inbetween scenario like using a managed inference provider to host your own models?
- nunodonato 6mo ago
  what would be the advantage?

cortesoft 6mo ago

What makes you say it is a bad business decision? It seems to be a fine decision to make for things like AWS, since when it goes down, a ton of websites go down and no one blames the site. There is no way to know whether it is a good or bad business decision just because they can go down when a third party goes down. For example, if you save $50 million a year by firing half your employees and replacing them with AI, but you lose $10 million a year because your site goes down when Claude goes down, then you made a great business decision.

iugtmkbdfil834 6mo ago
Oddly, I do not think you are wrong. In a pure money calculus exercise, this seems like a no brainer. Naturally, the math gets iffy the moment we are trying to capture something less tangible like 'customer may get sufficiently annoyed to drop us altogether' or 'we are no longer a respected company' or what MBAs would call 'unexpected goodwill extraction'. I honestly don't care nearly as much as I used to, because I used to be more upset over this. Now, I simply wait to see how much is enough to rile up average Joe and Jenna.
graemep 6mo ago
On the other hand a competitor site that is up (or bricks and mortar competitors) might get a lot of business when AWS goes down. If you depend on AWS for operations it might be a lot more expensive than that. Mostly I think its that management does not blame the person who picks AWS. Its another iteration of "no one got fired for buying IBM/Microsoft". It is also an issue at other levels: if all a county's businesses rely on AWS (let alone its government) then that gives the US huge leverage over you (sanctions would shut down your economy).
- skywhopper 6mo ago
  That would require AWS to actually be down a lot, and it’s not. Betting your business on AWS being flakier than whatever alternative provider you use is probably not a good idea.
  - 6mo ago

deleted 6mo ago

[deleted]

dilyevsky 6mo ago

Lots of companies did that moving to cloud in 10s and it was generally a positive

shimman 6mo ago
Only if you think consolidation of the entire tech industry being funneled into a dozen or so companies as positive sure. Most of humanity doesn't think this, nor I doubt any devs like the current state of affairs where 4 companies dictate the direction of technology in this country.
- dilyevsky 6mo ago
  Nobody dictates you anything - you’re welcome to setup your own dc if you wish to as some folks do. Not sure about “most of humanity” (lmao) but most of professionals in this line of work clearly don’t think it’s worth it for them

ravenstine 6mo ago

Corporate leaders don't learn lessons. They follow trends, chase growth, reduce the perception of risk, diffuse blame, get their business acquired, and exit with money bags in both hands. No learning from experience necessary.

altern8 6mo ago

Sorry, but what happened in 2010..?

mbgerring 6mo ago
The rise of the “programmable web,” internet companies offering “free” APIs on which businesses were built, and then destroyed when the company offering the API changed the terms or started charging for it. Twitter was a famous example, Facebook was a major culprit, Google offered a lot of free APIs that wreaked havoc like this, and many, many many smaller forgotten examples. “Web 2.0” was supposed to be a web of interoperable applications with features exposed by APIs, where you could assemble little pieces of functionality into new and novel configurations. It was cool for a little while, but it was never sustainable. There was an enclosure of the commons (they were never really the commons), and now we’re all digital serfs. It was a beautiful dream, while it lasted!