That random person is right. One can run a DC at scale of 50 racks at least 20% cheaper than GCP. That's $80M a year to hire 20 smart people at $2M a year and 200 reasonably smart people at $200k per year. Snap will vanish like their pictures.
That's assuming that: - GCP will always have a margin that high - Snapchat is paying the advertised rate - They can find the requisite talent in a reasonable timeframe
Bingo. They aren't paying advertised rates. Google will have margin but not as much as usual. Snap also has google by the balls here. What if snap comes out with a statement saying Gcp sucks and they're moving to aws?
Snap needs to have consistent booked revenue in order justify this sort of outlay. This is akin to dot-com era companies signing long leases on buildings or small business owners buying lots of inventory. Plus, 2 gigadollars could easily buy 4-10 soup-to-nuts datacenters that have tangible (although less) resale value. Overexpansion is easy to do and super risky... these sort of moves increase expectations and scare…
Maybe. I agree with your sentiment, but a lot of investors say "cloud" - ooh good, I like Google, so Google Cloud must be good, buy Snap Stock!!!
Ideally, a company should use a hybrid of cloud and on-prem as a p&l dial to adjust risk and agility.
EDIT: for super scrappy startups playing with on-prem with lab-like reliability, https://unixsurplus.com/ is awesome.
Having a basic scaffolding in place on a hosted cloud and making sure your devops scripts are up to snuff is a good idea when you don't know how much infrastructure you need, because then when the situation calls for it you can fire up a new node on-demand. But unless you're still "in the garage" and a couple of DigitalOcean droplets are good enough, it's going to be much, much cheaper and usually much wiser to run y…
> Script your stuff out in Ansible or something similar, run it on your own hardware, and use GCloud/EC2 as secondary data centers for failover/backup/support/emergency bursts/whatever. You can have the flexibility without paying through the nose. Except then you have to run your own networking and when shit fails (as disks, links, and switches are want to do), it's now "your problem". Hybrid clouds and not being a t…
And when EC2 falls over, like it tends to do a few times a year? Hosts fall over, stuff dies. Something the scale of Snap, you're going to be doing setups that look a lot like cloud anyways. Bringing new systems up either by cloning a disk or through using PXE, setting up clustering, possibly by using the stuff they're already using, etc. You're going to be writing a lot of the same fallover code if you're running on someone else's hardware, so why rent?
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
Assuming that large companies can't be wrong is the reason why we have Enron and Bear Stearns
Completely wrong way to think about it. In fact, those companies are cases of fraud and lying, and we generally do not assume companies lie. When Google releases their quarterly earnings, we assume the numbers are correct, unless there is evidence to believe it's fraudulent.
Makes me wonder if Google will buy a substantial amount of Snap stock and if there were takeover discussions before the IPO. I'm not sure if I like this from Snaps POV but it seems like they expect massive growth and possibly want to focus more on the core business than on infrastructure (which could come back to bite them strategically but I'm sure they got a very sweet deal).
To be fair, that company is run by these same 'random persons' that are commenting here.
That doesn't mean anything, though. "Some people who do X also do Y" does not imply that "people who do Y are qualified to comment on X." For example: Elon Musk is a Twitter user. I too am a Twitter user. So's Kylie Jenner, Donald Trump, and random spambots. Using the same service does not mean they're equally qualified to speak with authority about the same things.
Being a 'random person' or a Twitter user should have no bearing on the merit of one's arguments.
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
Assuming that large companies can't be wrong is the reason why we have Enron and Bear Stearns
Large companies aren't always right, but they're not always wrong either.
Snap has competent engineering execs that have built a very strong company. I would have a hard time believing that they haven't put way more thought into this than OP.
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…
The other thing you get with GCloud is multiple datacenters around the planet. Assuming Snap are going after the 2billion+ people not in America, this seems like an advantage to use someone else's gear. 2billion seems high, maybe it's the maximum negotiated on paper for the deal as opposed to the guaranteed?
When you have Adwords dollars pouring in it makes sense to go send out a few people to buy up fibre and land/power/water for datacenters on the down low....