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Snap commits $2B over 5 years for Google Cloud infrastructure

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Re: Snap commits $2B over 5 years for Google Cloud infrastructure

#91

Post by andrewstuart2 »

randartie wrote: post #50

Needing this amount of resources implies that Snap is expecting huge growth. This sounds like a really bad move on their part and they should have committed to building out their own infrastructure on 'bare metal' over the next 5 years instead. If you read their S-1, they list a dependence on Google cloud as one of their big risk factors. Yet they then go ahead and make this commitment instead of working towards elim…

Facebook reported $27 billion in revenue in 2016. Snap reported $400 million. You're talking two orders of magnitude lower than Facebook and almost three lower than Google. Snap simply does not have the resources to pour into custom data centers, even if they can raise $2 billion for infra over 5 years. Unless they have serious talent already, they're not going to match Google's massive 15 year investments by a long shot, even if you only consider the services they actually need to use.

Re: Snap commits $2B over 5 years for Google Cloud infrastructure

#92

Post by azinman2 »

ulfw wrote: post #78
randartie wrote: post #50

Needing this amount of resources implies that Snap is expecting huge growth. This sounds like a really bad move on their part and they should have committed to building out their own infrastructure on 'bare metal' over the next 5 years instead. If you read their S-1, they list a dependence on Google cloud as one of their big risk factors. Yet they then go ahead and make this commitment instead of working towards elim…

It begs the question what their product really is if so much is outsourced to others and where the valuation is at if all it is is just branding.

Network effects are massive, and they keep iterating on product successfully. You're focusing on the least interesting bit that's outsourced.

Re: Snap commits $2B over 5 years for Google Cloud infrastructure

#93

Post by some_guy_there »

obulpathi wrote: post #12
user5994461 wrote: post #5

This makes no sense. One cannot spend $33M a month on Google Cloud. (Remember that it's half the price of AWS, and given a contract of that magnitude it's possible that they negotiated yet another half off). The amount of hardware and services one would get for that bill is insane. Snapchat doesn't need that much computing power and storage.

I guess that speaks about the scale at which they are operating in Google Cloud. Diane Green mentioned in a recent conference that one of their healthcare customers collect about 2 PB / user. Lot of companies struggle with managing / extracting value from data. Thats where the bottle neck is usually. If they have capability to handle more data, overtime their services evolve to collect, store and process more data. O…

That seems a bit too much storage, considering that Seagate only shipped around ~ 250 Exabytes worth of HDD in 2015[1]. Being extremely generous for world supply of Hard drive, we might have had only 1000 Exabytes of storage shipped in a year.

Assuming 2 Petabyte per user, mere 500,000 user will consume entire storage produced every year. May be they do, but 2 PB/user seems improbable. That's also $14k per person of data (assuming no discount from Google to this company).

[1] http://www.anandtech.com/show/10098/market-views-2015-hard-d...

Re: Snap commits $2B over 5 years for Google Cloud infrastructure

#94

Post by sobinator »

Many talking of software here, but at this scale I think we should be looking at the cost of energy. Suppose Google has a true edge on the rest of the market in terms of what the cost of a Watt is to them. Take that outlook over the horizon of 5 years; all software arguments are thereby moot. If Google can generate a Watt in 5 years at 10% the cost that AWS can, then this drastically changes the equation.

Re: Snap commits $2B over 5 years for Google Cloud infrastructure

#95

Post by ohashi »

matt_wulfeck wrote: post #89
Alex3917 wrote: post #69

Earlier quoted context omitted.

> Needing this amount of resources implies that Snap is expecting huge growth. It's a hedge. If they don't grow as rapidly as expected then they're betting that someone else will buy the excess reserved capacity from them for close to market rates. So in the case that they only use 1.5 billion dollars worth of hosting, they're betting that they'll be out, say, $25M rather than $500M. On the other hand they want to ma…

I've never heard of anyone buying excess cloud capacity from a private party. Is this a thing? Is there a market for this? Sounds like a security nightmare.

http://docs.aws.amazon.com/AWSEC2/latest/UserGuide/ri-market...

Re: Snap commits $2B over 5 years for Google Cloud infrastructure

#96

Post by Alex3917 »

matt_wulfeck wrote: post #89
Alex3917 wrote: post #69

Earlier quoted context omitted.

> Needing this amount of resources implies that Snap is expecting huge growth. It's a hedge. If they don't grow as rapidly as expected then they're betting that someone else will buy the excess reserved capacity from them for close to market rates. So in the case that they only use 1.5 billion dollars worth of hosting, they're betting that they'll be out, say, $25M rather than $500M. On the other hand they want to ma…

I've never heard of anyone buying excess cloud capacity from a private party. Is this a thing? Is there a market for this? Sounds like a security nightmare.

AWS reserved marketplace?

Security wise it's no different than any other instance; specific machines aren't associated with the party who originally reserved the capacity in any way.

Re: Snap commits $2B over 5 years for Google Cloud infrastructure

#99

Post by xux »

randartie wrote: post #50

Needing this amount of resources implies that Snap is expecting huge growth. This sounds like a really bad move on their part and they should have committed to building out their own infrastructure on 'bare metal' over the next 5 years instead. If you read their S-1, they list a dependence on Google cloud as one of their big risk factors. Yet they then go ahead and make this commitment instead of working towards elim…

I love Hacker News, where a random person can tell a company their $2 billion plan on infrastructure is "a really bad move" with authority
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