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Basically the Cloud is a stepping stone on your way to greater things. You may outgrow the cloud or you may find you have economies of scale where the cloud is

by awjr 13y ago

Basically the Cloud is a stepping stone on your way to greater things. You may outgrow the cloud or you may find you have economies of scale where the cloud is becomes the expensive option. Recognise it and change your set up. TBH you should be doing this with all aspects of the business. Start in a room/garage, move to serviced offices, then rent your own building, then buy your own building (should it become financially viable). I think this is basic Return On Investment analysis.

area51org 13y ago
It's a stepping stone for some companies. For many others, it's not (e.g. Netflix, Heroku). I see a false dichotomy here: start off with the cloud, then move to bare metal servers. If you've got an OLTP database that demands high-performance, you may need bare metal. Many companies don't, though. I've been a consultant to companies who've over-extended themselves on EC2 and ended up with huge monthly bills they didn't anticipate; in every instance, it was because they hand-built servers, cloned them, and then hand-modified them. The result was a set of servers they would like to be able to destroy (when they didn't need them) and then respawn (when they did), but couldn't because of the modifications. So, yeah, you can get in trouble with cloud services. But that doesn't mean you can't use it cost-effectively on a permanent basis. Like anything else, it requires planning. Switching to bare metal? Sure: as hypervisors to your private cloud. Projects like OpenStack, an EC2 clone supported by Rackspace and Red Hat (among others) make it straightforward and compelling to virtualize your environment. edit: content
- Spooky23 13y ago
  Netflix is fundamentally a different business than most. Their whole business model is a tenant relationship - they control nothing. Demand for their services can only be met by licensing deals, which also happen to generate demand for their service. All components of their business (IT infrastructure, network transit, end-user networks) are owned by competitors. Content owners can and do screw Netflix with hardball negotiation tactics. Unlike cable companies, Netflix doesn't have a utility billing regime or local monopoly on services. So at any time, the need for large swaths of their IT infrastructure can disappear. So what do you do? Put lots of liabilities on your books (datacenters, computers, SANs, etc)? Or rent it from someone?
DanielBMarkham 13y ago
Yeah I almost flagged this. There's nothing there except a title that might be provocative and a bunch of "Can you use math? If so, you might make decisions based on it" prose. (I didn't flag it because, frankly, the HN audience isn't what it used to be, and to many this actually might be news. Plus the comments promised to be useful for many) I honestly don't want to insult the publication or author here. I'm sure for many people who don't use math, the cloud might seem like the best choice at all times. However I'd really like to believe that if you're creating a product involving technology, and you're busy creating a business model, that at some point you're going to be figuring out things like cost of a new customer acquisition, or overhead cost per user. This stuff isn't exactly arcane or even terribly complicated.
- area51org 13y ago
  Well, let's define "cloud": in this instance they seem to only mean EC2, which can be expensive if not used carefully. So can bare metal. And what's worse, bare metal means a whole lot of care and feeding that you may not be prepared for. There is no one prescription that will fit every company in every situation. But this article describes an anecdotal situation, not something typical. And, "the cloud" does not automatically mean someone else's services. For the vast majority of typical computing applications, companies should be using private virtualization (OpenStack, Vsphere, what-have-you) rather than just buying a bunch of pizza boxes or blades.

by awjr 13y ago

area51org 13y ago

It's a stepping stone for some companies. For many others, it's not (e.g. Netflix, Heroku). I see a false dichotomy here: start off with the cloud, then move to bare metal servers. If you've got an OLTP database that demands high-performance, you may need bare metal. Many companies don't, though. I've been a consultant to companies who've over-extended themselves on EC2 and ended up with huge monthly bills they didn't anticipate; in every instance, it was because they hand-built servers, cloned them, and then hand-modified them. The result was a set of servers they would like to be able to destroy (when they didn't need them) and then respawn (when they did), but couldn't because of the modifications. So, yeah, you can get in trouble with cloud services. But that doesn't mean you can't use it cost-effectively on a permanent basis. Like anything else, it requires planning. Switching to bare metal? Sure: as hypervisors to your private cloud. Projects like OpenStack, an EC2 clone supported by Rackspace and Red Hat (among others) make it straightforward and compelling to virtualize your environment. edit: content

Spooky23 13y ago
Netflix is fundamentally a different business than most. Their whole business model is a tenant relationship - they control nothing. Demand for their services can only be met by licensing deals, which also happen to generate demand for their service. All components of their business (IT infrastructure, network transit, end-user networks) are owned by competitors. Content owners can and do screw Netflix with hardball negotiation tactics. Unlike cable companies, Netflix doesn't have a utility billing regime or local monopoly on services. So at any time, the need for large swaths of their IT infrastructure can disappear. So what do you do? Put lots of liabilities on your books (datacenters, computers, SANs, etc)? Or rent it from someone?

DanielBMarkham 13y ago

Yeah I almost flagged this. There's nothing there except a title that might be provocative and a bunch of "Can you use math? If so, you might make decisions based on it" prose. (I didn't flag it because, frankly, the HN audience isn't what it used to be, and to many this actually might be news. Plus the comments promised to be useful for many) I honestly don't want to insult the publication or author here. I'm sure for many people who don't use math, the cloud might seem like the best choice at all times. However I'd really like to believe that if you're creating a product involving technology, and you're busy creating a business model, that at some point you're going to be figuring out things like cost of a new customer acquisition, or overhead cost per user. This stuff isn't exactly arcane or even terribly complicated.

area51org 13y ago
Well, let's define "cloud": in this instance they seem to only mean EC2, which can be expensive if not used carefully. So can bare metal. And what's worse, bare metal means a whole lot of care and feeding that you may not be prepared for. There is no one prescription that will fit every company in every situation. But this article describes an anecdotal situation, not something typical. And, "the cloud" does not automatically mean someone else's services. For the vast majority of typical computing applications, companies should be using private virtualization (OpenStack, Vsphere, what-have-you) rather than just buying a bunch of pizza boxes or blades.