7 ms·

Does Amazon Web Services Pricing Follow Moore's Law?

60 points by deitcher 12y ago

markpundmann 12y ago
Price drop speed has already been examined: https://gigaom.com/2014/04/19/moores-law-gives-way-to-bezoss-law/ https://gigaom.com/2014/04/19/moores-law-gives-way-to-bezoss...
- jimmrf 12y ago
  Yes quite right that is the source of the slide I mention (cited in post itself/not in HN comment).
- deitcher 12y ago
  Excellent. I like the numbers - it took a long time to hunt down numbers, the GigaOM article would have helped - but it is the underlying costs beyond the hardware that make it so.
jimmrf 12y ago
Fascinating topic - yes AWS pricing falls slower than Moore's Law, this reflects the degree of market power shared by few large public cloud providers given the scale needed to compete at the top level. The profit maximizing strategy for each is enjoy rising margins while costs fall and reset prices to a lower level as a pack once costs have fallen so low that it is most profitable to lower the price to serve a larger market (google 'oligopoly' or 'kinked demand' for further clarity). There was actually a slide addressing this very question used in a Urs Hölzle keynote at Google Cloud Live 3/25/14. It was titled 'but prices are not falling fast enough' and showed 2006-2014 cloud prices falling 6-8% vs. 20-30% improvement in hardware pricing. I included a screenshot in my deep-ish dive I'm developing on the economics of cloud market pricing http://www.stackalpha.com/blog/2015/2/25/cloud-price-wars-the-joke-is-on-us http://www.stackalpha.com/blog/2015/2/25/cloud-price-wars-th...
- ceejayoz 12y ago
  > It was titled 'but prices are not falling fast enough' and showed 2006-2014 cloud prices falling 6-8% vs. 20-30% improvement in hardware pricing. Did power, land, maintenance, staffing, R&D, etc. costs fall 20-30% during that time period too?
  - jimmrf 12y ago
    Good point: Power - per kW cost would not have fallen materially, but efficiency per instance would have improved Land - flat fixed cost would not have fallen, but sunk cost on existing facilities no marginal cost only relevant to geographic expansion. Also, AWS would own so would be working from increasingly small amortized base Maintenance - might improve marginally with scale and experience as improve leverage on physical infrastructure Staffing - would expect headcount per instance to fall in the period and automation to simplify some roles, offset by rising wage R&D - You are 100% correct this would most definitely be increasing in the period and illuminates an interesting nuance. I am probably perverse in thinking of the underlying 'core' service (compute, storage, etc) margins as funding R&D to compete by creating the suite of services on top
  - nostrademons 12y ago
    For Google's purposes, this is immaterial. They already have core competencies in power, land, maintenance, staffing, R&D, etc that are sunk costs. Their point is that Amazon is enjoying 80-90% profit margins, and so this is a lucrative business for them to enter. Moreover, they're pointing out that they can offer you large cost savings sustainably to entice you to switch. For a small business's perspective, the cost of overhead is absolutely material - but then, most of them probably wouldn't switch to bare metal anyway, but rather Dockerize their app and shop it around to whoever the lowest-cost IaaS provider is.
    - ceejayoz 12y ago
      > They already have core competencies in power, land, maintenance, staffing, R&D, etc that are sunk costs. Their cloud offerings expanding mean more power use, more land use, more maintenance, more staffing, more R&D. It's not all sunk cost.
rjsamson 12y ago
Quick comment on the comparison of AWS cost to DIY cost - for AWS costs you're using the on demand pricing for 3 years and comparing it to the cost of buying hardware over 3 years. If you're going to be running instances for 3 years you're probably going to be using reserved instances - in the case of m3.medium instances the rate drops from $0.070 / hour to $0.0261 / hour. So, with the 3 year reserved pricing your total cost ends up being something like $411,544 - less than half the cost of the referenced $880,000 hardware purchase price.
- deitcher 12y ago
  You are 100% correct. That is why the article explicitly listed it as an assumption, and that the advantage for public cloud over private hardware is even better once you account for that.
  - rjsamson 12y ago
    Whoops - totally missed that assumption!
jasode 12y ago
I don't agree with the methodology for calculating AWS -vs- Moore's Law as mentioned in blog articles such as this one.[1] A more accurate cost model would require multiple components in addition to number of transistors that amazon buys. For example, to fully build an AWS service: ++You need a plot of land for the data center. Do real estate prices follow Moore's Law? ++Concrete and steel to erect the data center building. Do raw building materials follow Moore's Law? ++Energy costs. Does the price of terawatts follow Moore's Law? ++Bandwidth costs. Does the price of network transfers from Tier 1 backbones follow Moore's Law? ++Staffing costs. Do the programmers, system admins, and other techies' salaries paid by amazon follow Moore's Law? ++etc, etc. If transistor count was the overwhelming cost item for supplying an "AWS" offering, we could then ignore all other component costs as an insignificant rounding error. Is this the case? [1]https://gigaom.com/2014/04/19/moores-law-gives-way-to-bezoss-law/ https://gigaom.com/2014/04/19/moores-law-gives-way-to-bezoss...
- deitcher 12y ago
  @jasode, actually, that is the exact point of the article. Non-Moore's-Law-subject costs are, at a bare minimum, 60% of the fully-loaded costs, probably more. All of that means that AWS costs should drop much slower than Moore's Law, about 60% slower. And yet, they keep dropping at a fast clip. Most of that would be due to Amazon's innovation and scale on everything beyond Moore's-Law-subject components. I think we are agreeing.
- deleted 12y ago
  [deleted]
- Someone 12y ago
  "Do real estate prices follow Moore's Law?" It doesn't have to. If prices are constant and computers halve in size/power use every x months, real estate prices per bogomips halve every x months, too. "Do the programmers, system admins, and other techies' salaries paid by amazon follow Moore's Law?" Again, they don't have to. It also is possible to make efficiency gains. Here, I would guess Amazon has outsprinted Moore's law. Similarly, I would guess network costs and speed have gone down faster than Moore's law. Of the things you mention, my _guess_ would be that only energy prices are a significant factor stopping AWS pricing from following Moore's law. But yes, it is more complicated than "pricing should follow Moore's law"
bengali3 12y ago
remember, price != cost. pricing has many other influences. Interesting conundrum however that the author discusses, that the gigaom link does not. At first glance this may appear that big consumers would be better off with their own hardware long term since they could theoretically follow the moore curve, but the missing piece is the cost of ownership AND cost of staying on the curve(since the curve keeps falling, you're continuously upgrading) Next up is to build such that you can treat all cloud hosts as a commodity. Continuously monitoring pricing and loads and moving large amounts of instances from one provider to the next to optimize your costs.
rkwasny 12y ago
I don’t quite agree with all the calculations of AWS vs DIY. m3.medium instance - 1 core, 3.75GB RAM, 4GB SSD Typical server this days: 2*10 physical cores, 256GB RAM, 2 TB SSD For around ~$10k So you can run AT LEAST 20 m3.medium instances on a physical box (without overbooking). If you use overbooking a single server can handle probably 40 m3.medium class machines. So instead of 100 servers, you need 30, or more probably 20. Bottom line is: People locked in the cloud mindset do not understand how fast physical hardware is this days compared to "cloud" offerings.
- jdub 12y ago
  People locked in the physical mindset do not understand how flexible cloud infrastructure is these days compared to "metal" offerings. By the way, your rack is on fire.
  - deitcher 12y ago
    "by the way, your rack is on fire." LOL!
  - beachstartup 12y ago
    http://www.datacenterknowledge.com/archives/2015/01/09/fire-amazon-data-center-construction-site-ashburn-contained/ http://www.datacenterknowledge.com/archives/2015/01/09/fire-...
    - jdub 12y ago
      And isn't it just wonderful how I don't have to give any fucks at all?
      - beachstartup 12y ago
        well, it wasn't in production yet, but it could happen in production, and will. my point was that aws is still metal servers in racks.
    - jdcarr 12y ago
dumbfounder 12y ago
The increasing energy cost in computing these days should change our thinking on Moore's law. We shouldn't be worried as much about doubling the power of a cpu, especially in a cloud setting, because you can always do that by using 2 cpus. We should instead create an equation based on the computing power, energy consumption, and energy prices.
skuhn 12y ago
It's difficult to top AWS just based on an apples-to-apples comparison of buying servers versus turning up EC2 instances. EC2 is pretty price aggressive if you know what your needs are, identify an instance type that fits well, and reserve it for 3 years. A lot of people don't actually achieve all three, but it's often possible. Most comparisons overlook the crucial price differentiator between AWS and a datacenter build: bandwidth costs. AWS bills based on bytes transferred, every IP transit provider bills by 95th percentile or similar. A 1 gig commit on a 10 gig circuit is $1-2/meg in a well served on-net building, so let's say $2000/mo. The switch is $5000 or so, something that can't do full table BGP but is layer 3 capable, and support is $1000/yr. The cross connect is $300/mo. Plus a little bit more for optics and fiber. Over three years the cost is $91,000 (plus power to run the switch), if you never go above the 1 gig commit. Seems like a lot of money right? Compare this to transferring 500mbit/s constantly to the Internet over 3 years at AWS pricing. That amounts to 156 TB / month transferred. Per month that will cost $11,878.40. Over 3 years the cost is $427,622.40. There are some other key differences between AWS and datacenters: - it puts all of your spending into opex, eliminating capex (this matters for some businesses); - it limits the ways you can solve problems, there's no VRRP support for example, which is very limiting for a lot of service types; - there is no ability to peer or receive settlement free transit if you deploy in AWS However, in terms of raw dollars, the method that AWS uses to bill bandwidth consumption is always the major cost differentiator.
- deleted 12y ago
  [deleted]
- athrun 12y ago
  The bandwidth between AWS regions and Cloudfront is free so you can save a lot here as well while improving performance for your end users. And on the Cloudfront side, you can negotiate pricing to further reduce the cost. Edit with Source: Cloudfront pricing page: http://aws.amazon.com/cloudfront/pricing/ http://aws.amazon.com/cloudfront/pricing/ "If you are using an AWS origin, effective December 1, 2014, data transferred from origin to edge locations (Amazon CloudFront "origin fetches") will be free of charge."
  - 12y ago
alexnewman 12y ago
The hp server prices had no discount. Made me think the guy was being dishonest or uninformed about the rest
alexnewman 12y ago
The hp server prices had no discount. Made me think the guy was being dishonest or uninformed about the rest
TTPrograms 12y ago
GPU instances still seem overpriced. Reserved gets you $0.30 an hour, which would run you ~$8000 over 3 years. Hard to imagine the specs are much better than a $1500 computer.
- skuhn 12y ago
  The GPU instances use Nvidia GRID K2 cards, which cost $3000 in qty 1. AWS only runs two GPU instances per card, so they need to recoup the cost from fewer instances than typically share components. Nvidia's high end cards (GRID, Tesla) also have significantly disproportionate per-gflop costs. The g2 instance costs have also come down a bit in the last 6 months, so they used to be even more overpriced. For $8.4mm you can run 592 g2 instances reserved for 3 years and get 1,355,680 gflops. In a datacenter environment (including power, network equipment, installation, redundancy, etc.) you could achieve that level of performance for $3mm (not using GRID or Tesla cards). And then bandwidth prices really blow EC2 out of the water.
coldcode 12y ago
I'm always amazed that anyone can accurately calculate any cost of a set of Amazon web service elements, must less do it sufficiently accurately to measure over time.
- dbarlett 12y ago
  There's an old joke that AT&T was really a billing company that happened to offer phone service. You could say the same thing about AWS.
MichaelGG 12y ago
No, but Google Compute Engine does a bit. For instance, Azure is at least twice as expensive than Google for cloud compute. (In addition to having their weirdass PaaS design leaking into their IaaS. Nice service otherwise.) I was super hesitant to use Google for anything (A: because I dislike them now, B: I couldn't be sure they'd be committed to it, C: I recall they screwed people on Google App Engine?). But their offering is so much more straightforward and much cheaper. No commits, just use VMs and get discounts. GCE is also way faster to start up. And single-core performance blows away Azure. Azure and AWS make a big deal about storage and transfer, while ignoring they're way overpricing the CPU. Edit: Here's Google's pricing "philosophy": https://cloud.google.com/pricing/philosophy/ https://cloud.google.com/pricing/philosophy/ where they explicitly say they're committed to Moore's Law and others aren't.
astrodust 12y ago
Moore's Law refers only to the number of transistors in a component, and while transistors generally translates to computing power, this is not a 1:1 thing. Lately the shift has been from CPU power to GPU power, so while there's more compute capability than ever, you need a hybrid system to take full advantage of Moore's Law.
late2part 12y ago
I hope to have time to build a google spreadsheet to compare your numbers more closely. Mose people don't realize that an AWS "core" is a threaded core. So the example quoted below of 2 processors with 10 cores is not 20 equivalents to amazon cores, but 40 cores. Additionally, you're not depreciating your costs over several years as near as I can tell. Whatever these numbers come out to, it's clear that if you're small and need unpredictable agility, AWS is cheaper. If you're larger and have enough foresight into your usage pattern, AWS is never cheaper at the right economy of scale.
- mabbo 12y ago
  > Whatever these numbers come out to, it's clear that if you're small and need unpredictable agility, AWS is cheaper. If you're larger and have enough foresight into your usage pattern, AWS is never cheaper at the right economy of scale. Isn't that pretty much just a rule of the economy? Something like "It will always be cheaper to do it yourself, at a sufficient scale"?
  - late2part 12y ago
    Probably true. But, I think, and hope to prove, that that inflection point is much lower than represented in the OP's writings.
- jasode 12y ago
  >, AWS is never cheaper at the right economy of scale. Of course, it's a case-by-case analysis of whether AWS makes financial sense. However, I think some people have a misunderstanding on what the "right" economy scale could be. The smart guys at Netflix (including Adrian Cockcroft) crunched the numbers it and it made more sense to go 100% on AWS rather than spend money on trying to maintain their own datacenters. Is Netflix a small time startup? Did CEO Reed Hastings properly evaluate that his business was the "right" scale? Your answer implies that if Netflix acquires X million more subscribers (whatever "X" happens to be), they should bring everything back in house and run their own bare metal servers. Is that correct?
  - 12y ago
t0mas88 12y ago
Nice story, but the numbers don't add up at all. If you order managed colo at a provider like Rackspace (which is a much higher level of support and guarantees than AWS, basically 24x7 and 100% on network and cooling etc) and get dual or quad CPU machines (really standard, I think they don't even have single CPU as an option anymore) with 256 or 512 GB ram you can run 64 or even much more "AWS medium" nodes on 1 piece of hardware. Because the AWS "core" is based on a very old type of Xeon. So in reality you could run this setup with fully managed network and a 100% SLA on 9 or 10 dedicated machines at Rackspace (or even a cheaper competitor of theirs). The price for that would be around 9x 800 and the cost of two dedicated firewalls for a redundant high performance setup. So I would guess 7 to 8k USD per month or 288.000 USD in three years. Which is over 60% cheaper than the proposed AWS setup. So maybe if you buy way too much hardware and combine it with a lot of manual work that could be done cheaper by a good provider, then yes... AWS looks cheaper. But if you look at a realistic setup on that scale, hardware is much more cost effective. The sweat spot for AWS is a small setup or very flexible load. If you're big with a steady load, a smart setup with a managed provider is much more effective. (And as a last remark: both AWS and Google have huge discounts for long commitments, Google even does it without upfront commitment. So if you use those prices the two options end up much closer again)
- deleted 12y ago
  [deleted]
yellowapple 12y ago
It probably doesn't if the article's headline has to phrase it as a question instead of just stating outright "Amazon Web Services Pricing Follows Moore's Law".

60 points by deitcher 12y ago

Price drop speed has already been examined: https://gigaom.com/2014/04/19/moores-law-gives-way-to-bezoss-law/ https://gigaom.com/2014/04/19/moores-law-gives-way-to-bezoss...

jimmrf 12y ago
Yes quite right that is the source of the slide I mention (cited in post itself/not in HN comment).
deitcher 12y ago
Excellent. I like the numbers - it took a long time to hunt down numbers, the GigaOM article would have helped - but it is the underlying costs beyond the hardware that make it so.

jimmrf 12y ago

Fascinating topic - yes AWS pricing falls slower than Moore's Law, this reflects the degree of market power shared by few large public cloud providers given the scale needed to compete at the top level. The profit maximizing strategy for each is enjoy rising margins while costs fall and reset prices to a lower level as a pack once costs have fallen so low that it is most profitable to lower the price to serve a larger market (google 'oligopoly' or 'kinked demand' for further clarity). There was actually a slide addressing this very question used in a Urs Hölzle keynote at Google Cloud Live 3/25/14. It was titled 'but prices are not falling fast enough' and showed 2006-2014 cloud prices falling 6-8% vs. 20-30% improvement in hardware pricing. I included a screenshot in my deep-ish dive I'm developing on the economics of cloud market pricing http://www.stackalpha.com/blog/2015/2/25/cloud-price-wars-the-joke-is-on-us http://www.stackalpha.com/blog/2015/2/25/cloud-price-wars-th...

ceejayoz 12y ago
> It was titled 'but prices are not falling fast enough' and showed 2006-2014 cloud prices falling 6-8% vs. 20-30% improvement in hardware pricing. Did power, land, maintenance, staffing, R&D, etc. costs fall 20-30% during that time period too?
- jimmrf 12y ago
  Good point: Power - per kW cost would not have fallen materially, but efficiency per instance would have improved Land - flat fixed cost would not have fallen, but sunk cost on existing facilities no marginal cost only relevant to geographic expansion. Also, AWS would own so would be working from increasingly small amortized base Maintenance - might improve marginally with scale and experience as improve leverage on physical infrastructure Staffing - would expect headcount per instance to fall in the period and automation to simplify some roles, offset by rising wage R&D - You are 100% correct this would most definitely be increasing in the period and illuminates an interesting nuance. I am probably perverse in thinking of the underlying 'core' service (compute, storage, etc) margins as funding R&D to compete by creating the suite of services on top
- nostrademons 12y ago
  For Google's purposes, this is immaterial. They already have core competencies in power, land, maintenance, staffing, R&D, etc that are sunk costs. Their point is that Amazon is enjoying 80-90% profit margins, and so this is a lucrative business for them to enter. Moreover, they're pointing out that they can offer you large cost savings sustainably to entice you to switch. For a small business's perspective, the cost of overhead is absolutely material - but then, most of them probably wouldn't switch to bare metal anyway, but rather Dockerize their app and shop it around to whoever the lowest-cost IaaS provider is.
  - ceejayoz 12y ago
    > They already have core competencies in power, land, maintenance, staffing, R&D, etc that are sunk costs. Their cloud offerings expanding mean more power use, more land use, more maintenance, more staffing, more R&D. It's not all sunk cost.

rjsamson 12y ago

Quick comment on the comparison of AWS cost to DIY cost - for AWS costs you're using the on demand pricing for 3 years and comparing it to the cost of buying hardware over 3 years. If you're going to be running instances for 3 years you're probably going to be using reserved instances - in the case of m3.medium instances the rate drops from $0.070 / hour to $0.0261 / hour. So, with the 3 year reserved pricing your total cost ends up being something like $411,544 - less than half the cost of the referenced $880,000 hardware purchase price.

deitcher 12y ago
You are 100% correct. That is why the article explicitly listed it as an assumption, and that the advantage for public cloud over private hardware is even better once you account for that.
- rjsamson 12y ago
  Whoops - totally missed that assumption!

jasode 12y ago

I don't agree with the methodology for calculating AWS -vs- Moore's Law as mentioned in blog articles such as this one.[1] A more accurate cost model would require multiple components in addition to number of transistors that amazon buys. For example, to fully build an AWS service: ++You need a plot of land for the data center. Do real estate prices follow Moore's Law? ++Concrete and steel to erect the data center building. Do raw building materials follow Moore's Law? ++Energy costs. Does the price of terawatts follow Moore's Law? ++Bandwidth costs. Does the price of network transfers from Tier 1 backbones follow Moore's Law? ++Staffing costs. Do the programmers, system admins, and other techies' salaries paid by amazon follow Moore's Law? ++etc, etc. If transistor count was the overwhelming cost item for supplying an "AWS" offering, we could then ignore all other component costs as an insignificant rounding error. Is this the case? [1]https://gigaom.com/2014/04/19/moores-law-gives-way-to-bezoss-law/ https://gigaom.com/2014/04/19/moores-law-gives-way-to-bezoss...

deitcher 12y ago
@jasode, actually, that is the exact point of the article. Non-Moore's-Law-subject costs are, at a bare minimum, 60% of the fully-loaded costs, probably more. All of that means that AWS costs should drop much slower than Moore's Law, about 60% slower. And yet, they keep dropping at a fast clip. Most of that would be due to Amazon's innovation and scale on everything beyond Moore's-Law-subject components. I think we are agreeing.
deleted 12y ago
[deleted]
Someone 12y ago
"Do real estate prices follow Moore's Law?" It doesn't have to. If prices are constant and computers halve in size/power use every x months, real estate prices per bogomips halve every x months, too. "Do the programmers, system admins, and other techies' salaries paid by amazon follow Moore's Law?" Again, they don't have to. It also is possible to make efficiency gains. Here, I would guess Amazon has outsprinted Moore's law. Similarly, I would guess network costs and speed have gone down faster than Moore's law. Of the things you mention, my _guess_ would be that only energy prices are a significant factor stopping AWS pricing from following Moore's law. But yes, it is more complicated than "pricing should follow Moore's law"

bengali3 12y ago

remember, price != cost. pricing has many other influences. Interesting conundrum however that the author discusses, that the gigaom link does not. At first glance this may appear that big consumers would be better off with their own hardware long term since they could theoretically follow the moore curve, but the missing piece is the cost of ownership AND cost of staying on the curve(since the curve keeps falling, you're continuously upgrading) Next up is to build such that you can treat all cloud hosts as a commodity. Continuously monitoring pricing and loads and moving large amounts of instances from one provider to the next to optimize your costs.

rkwasny 12y ago

I don’t quite agree with all the calculations of AWS vs DIY. m3.medium instance - 1 core, 3.75GB RAM, 4GB SSD Typical server this days: 2*10 physical cores, 256GB RAM, 2 TB SSD For around ~$10k So you can run AT LEAST 20 m3.medium instances on a physical box (without overbooking). If you use overbooking a single server can handle probably 40 m3.medium class machines. So instead of 100 servers, you need 30, or more probably 20. Bottom line is: People locked in the cloud mindset do not understand how fast physical hardware is this days compared to "cloud" offerings.

jdub 12y ago
People locked in the physical mindset do not understand how flexible cloud infrastructure is these days compared to "metal" offerings. By the way, your rack is on fire.
- deitcher 12y ago
  "by the way, your rack is on fire." LOL!
- beachstartup 12y ago
  http://www.datacenterknowledge.com/archives/2015/01/09/fire-amazon-data-center-construction-site-ashburn-contained/ http://www.datacenterknowledge.com/archives/2015/01/09/fire-...
  - jdub 12y ago
    And isn't it just wonderful how I don't have to give any fucks at all?
    - beachstartup 12y ago
      well, it wasn't in production yet, but it could happen in production, and will. my point was that aws is still metal servers in racks.
  - jdcarr 12y ago

dumbfounder 12y ago

The increasing energy cost in computing these days should change our thinking on Moore's law. We shouldn't be worried as much about doubling the power of a cpu, especially in a cloud setting, because you can always do that by using 2 cpus. We should instead create an equation based on the computing power, energy consumption, and energy prices.

skuhn 12y ago

It's difficult to top AWS just based on an apples-to-apples comparison of buying servers versus turning up EC2 instances. EC2 is pretty price aggressive if you know what your needs are, identify an instance type that fits well, and reserve it for 3 years. A lot of people don't actually achieve all three, but it's often possible. Most comparisons overlook the crucial price differentiator between AWS and a datacenter build: bandwidth costs. AWS bills based on bytes transferred, every IP transit provider bills by 95th percentile or similar. A 1 gig commit on a 10 gig circuit is $1-2/meg in a well served on-net building, so let's say $2000/mo. The switch is $5000 or so, something that can't do full table BGP but is layer 3 capable, and support is $1000/yr. The cross connect is $300/mo. Plus a little bit more for optics and fiber. Over three years the cost is $91,000 (plus power to run the switch), if you never go above the 1 gig commit. Seems like a lot of money right? Compare this to transferring 500mbit/s constantly to the Internet over 3 years at AWS pricing. That amounts to 156 TB / month transferred. Per month that will cost $11,878.40. Over 3 years the cost is $427,622.40. There are some other key differences between AWS and datacenters: - it puts all of your spending into opex, eliminating capex (this matters for some businesses); - it limits the ways you can solve problems, there's no VRRP support for example, which is very limiting for a lot of service types; - there is no ability to peer or receive settlement free transit if you deploy in AWS However, in terms of raw dollars, the method that AWS uses to bill bandwidth consumption is always the major cost differentiator.

deleted 12y ago
[deleted]
athrun 12y ago
The bandwidth between AWS regions and Cloudfront is free so you can save a lot here as well while improving performance for your end users. And on the Cloudfront side, you can negotiate pricing to further reduce the cost. Edit with Source: Cloudfront pricing page: http://aws.amazon.com/cloudfront/pricing/ http://aws.amazon.com/cloudfront/pricing/ "If you are using an AWS origin, effective December 1, 2014, data transferred from origin to edge locations (Amazon CloudFront "origin fetches") will be free of charge."
- 12y ago

alexnewman 12y ago

The hp server prices had no discount. Made me think the guy was being dishonest or uninformed about the rest

alexnewman 12y ago

The hp server prices had no discount. Made me think the guy was being dishonest or uninformed about the rest

TTPrograms 12y ago

GPU instances still seem overpriced. Reserved gets you $0.30 an hour, which would run you ~$8000 over 3 years. Hard to imagine the specs are much better than a $1500 computer.

skuhn 12y ago
The GPU instances use Nvidia GRID K2 cards, which cost $3000 in qty 1. AWS only runs two GPU instances per card, so they need to recoup the cost from fewer instances than typically share components. Nvidia's high end cards (GRID, Tesla) also have significantly disproportionate per-gflop costs. The g2 instance costs have also come down a bit in the last 6 months, so they used to be even more overpriced. For $8.4mm you can run 592 g2 instances reserved for 3 years and get 1,355,680 gflops. In a datacenter environment (including power, network equipment, installation, redundancy, etc.) you could achieve that level of performance for $3mm (not using GRID or Tesla cards). And then bandwidth prices really blow EC2 out of the water.

coldcode 12y ago

I'm always amazed that anyone can accurately calculate any cost of a set of Amazon web service elements, must less do it sufficiently accurately to measure over time.

dbarlett 12y ago
There's an old joke that AT&T was really a billing company that happened to offer phone service. You could say the same thing about AWS.

MichaelGG 12y ago

No, but Google Compute Engine does a bit. For instance, Azure is at least twice as expensive than Google for cloud compute. (In addition to having their weirdass PaaS design leaking into their IaaS. Nice service otherwise.) I was super hesitant to use Google for anything (A: because I dislike them now, B: I couldn't be sure they'd be committed to it, C: I recall they screwed people on Google App Engine?). But their offering is so much more straightforward and much cheaper. No commits, just use VMs and get discounts. GCE is also way faster to start up. And single-core performance blows away Azure. Azure and AWS make a big deal about storage and transfer, while ignoring they're way overpricing the CPU. Edit: Here's Google's pricing "philosophy": https://cloud.google.com/pricing/philosophy/ https://cloud.google.com/pricing/philosophy/ where they explicitly say they're committed to Moore's Law and others aren't.

astrodust 12y ago

Moore's Law refers only to the number of transistors in a component, and while transistors generally translates to computing power, this is not a 1:1 thing. Lately the shift has been from CPU power to GPU power, so while there's more compute capability than ever, you need a hybrid system to take full advantage of Moore's Law.

late2part 12y ago

I hope to have time to build a google spreadsheet to compare your numbers more closely. Mose people don't realize that an AWS "core" is a threaded core. So the example quoted below of 2 processors with 10 cores is not 20 equivalents to amazon cores, but 40 cores. Additionally, you're not depreciating your costs over several years as near as I can tell. Whatever these numbers come out to, it's clear that if you're small and need unpredictable agility, AWS is cheaper. If you're larger and have enough foresight into your usage pattern, AWS is never cheaper at the right economy of scale.

mabbo 12y ago
> Whatever these numbers come out to, it's clear that if you're small and need unpredictable agility, AWS is cheaper. If you're larger and have enough foresight into your usage pattern, AWS is never cheaper at the right economy of scale. Isn't that pretty much just a rule of the economy? Something like "It will always be cheaper to do it yourself, at a sufficient scale"?
- late2part 12y ago
  Probably true. But, I think, and hope to prove, that that inflection point is much lower than represented in the OP's writings.
jasode 12y ago
>, AWS is never cheaper at the right economy of scale. Of course, it's a case-by-case analysis of whether AWS makes financial sense. However, I think some people have a misunderstanding on what the "right" economy scale could be. The smart guys at Netflix (including Adrian Cockcroft) crunched the numbers it and it made more sense to go 100% on AWS rather than spend money on trying to maintain their own datacenters. Is Netflix a small time startup? Did CEO Reed Hastings properly evaluate that his business was the "right" scale? Your answer implies that if Netflix acquires X million more subscribers (whatever "X" happens to be), they should bring everything back in house and run their own bare metal servers. Is that correct?
- 12y ago

t0mas88 12y ago

Nice story, but the numbers don't add up at all. If you order managed colo at a provider like Rackspace (which is a much higher level of support and guarantees than AWS, basically 24x7 and 100% on network and cooling etc) and get dual or quad CPU machines (really standard, I think they don't even have single CPU as an option anymore) with 256 or 512 GB ram you can run 64 or even much more "AWS medium" nodes on 1 piece of hardware. Because the AWS "core" is based on a very old type of Xeon. So in reality you could run this setup with fully managed network and a 100% SLA on 9 or 10 dedicated machines at Rackspace (or even a cheaper competitor of theirs). The price for that would be around 9x 800 and the cost of two dedicated firewalls for a redundant high performance setup. So I would guess 7 to 8k USD per month or 288.000 USD in three years. Which is over 60% cheaper than the proposed AWS setup. So maybe if you buy way too much hardware and combine it with a lot of manual work that could be done cheaper by a good provider, then yes... AWS looks cheaper. But if you look at a realistic setup on that scale, hardware is much more cost effective. The sweat spot for AWS is a small setup or very flexible load. If you're big with a steady load, a smart setup with a managed provider is much more effective. (And as a last remark: both AWS and Google have huge discounts for long commitments, Google even does it without upfront commitment. So if you use those prices the two options end up much closer again)

deleted 12y ago
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yellowapple 12y ago

It probably doesn't if the article's headline has to phrase it as a question instead of just stating outright "Amazon Web Services Pricing Follows Moore's Law".