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A million-dollar engineering problem

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Re: A million-dollar engineering problem

#61

Post by qeternity »

amelius wrote: post #49
Negitivefrags wrote: post #16

A friend of mine was annoyed that a small service he liked was shutting down. He contacted the developer who said that they were shutting it down because the server costs were higher than the money they were making. They were spending 5k a month on AWS crap and claimed it was impossible to get any lower. He helped them consolidate everything onto a single rented dedicated server costing 400 a month. Now the service i…

I guess you could go even lower by not renting, but buying a server instead.

Not necessarily true. We run a decent amount of gear with OVH, and because if their scale and bulk discounts from OEM, our TCO is actually lower than it otherwise would be. I'm sure this isn't true at much larger scale, but I would bet it's true for most people.

Re: A million-dollar engineering problem

#62

Post by QuinnyPig »

qeternity wrote: post #59
QuinnyPig wrote: post #51

Earlier quoted context omitted.

> At this point simply not using AWS is a competitive advantage. Respectfully, I'm going to disagree. I consult full time on AWS cost optimization / reduction / understanding. If you blindly run things on AWS without an understanding of the costing model, that'll work for a time. As you scale, you start to realize "oh my god it runs on money." There are myriad ways around that, but a blanket "never use AWS" isn't goi…

I am curious your thoughts on the following. It seems like there is a trough of benefit to AWS. In the mid-size world, especially where computing needs are relatively stable/predictable, you are much better leasing dedicated servers from the usual suspects. Below that size, the linear scaling allows small scrappy startups to really scale/burst with their needs. And at large scale, but below Google/Facebook et al scal…

I agree with a lot of what you're saying-- but that trough is a lot wider than most people think.

At the single instance very small scale, it simply doesn't matter all that much. "Our business failed because our infrastructure bill was $400 instead of $150 every month" isn't that common of a story.

Base load can be effectively migrated to AWS, depending upon how it's built / structured. It's hard to lose money on infrastructure by converting worker servers to spot instances or lambda functions, as a for-instance-- but it's VERY easy to lose months of engineering effort in doing so.

Remember as well: done right you're not just buying services from the cloud, but flexibility as well. Resizing on the fly, bursting, duplicating your infrastructure for a test-- these things add value.

Re: A million-dollar engineering problem

#64

Post by QuinnyPig »

a13n wrote: post #42
a13n wrote: post #40

Earlier quoted context omitted.

Or charge 20% of what you save them over the next year. This way you're charging more overall (especially if their costs are growing). Also your revenue will be more recurring rather than a one time thing. And by the time the 12 months is up, maybe they'll need your service again. :P

Also as a SaaS founder running on AWS, I would totally do this once our AWS bill is in the 4-5 figures.

It's almost like clockwork. Companies start wondering around $10K a month; they start doing something about it at $50K a month. I can almost set my watch by it.

This turns into a fun parlor trick when I can estimate a client's bill based upon the story they tell me!

Re: A million-dollar engineering problem

#65

Post by rbranson »

secabeen wrote: post #56
GFischer wrote: post #41

Earlier quoted context omitted.

I disagree. Depends on the service's business model obviously, but there are services where the convenience will more than offset the extra costs. Once the company grows big enough, yes, then it might make sense to go off AWS (or not - see: Netflix).

Remember that Netflix runs their core product (content distribution) internally on their own CDN. All of the supporting technologies (billing, content discovery, etc.) is on AWS, but the core product is not.

This was a pretty recent change. Netflix has classically relied on third-party CDN providers. They launched the streaming service in 2007, and it took them 9 years to move 100% of their traffic to their own CDN infrastructure. That said, they still have one of the largest AWS footprints.

Re: A million-dollar engineering problem

#66

Post by QuinnyPig »

sly010 wrote: post #14
teh wrote: post #6

I've been joking with friends that my next job will be AWS efficiency guru. I've somewhat optimized our own use, but I think I could use similar, simple rules to get 20% out of a 500k / month budget. Give me what I save you in 2 months and I'll have a good business :)

The simplest one might be to convince a company to reserve 3 years worth of AWS resources and paying upfront. I am in this situation right now, but and it's a tough pill to swallow. I decided that all of my personal projects will be GCE. It is much more cost efficient already and Google will soon allow me to commit to future usage and pay my commitment as I go (Right now AWS forces you to pay upfront to get the same…

With a couple of exceptions, 3 year RIs are a poor move.

You're locking in pricing, and opting out of both newer instance classes and future price reductions during that time period.

Generally, they're only useful for "that database we WILL NEVER MOVE," or if you're writing portions of your cloud spend as CapEx and want to amortize depreciation.

Re: A million-dollar engineering problem

#67

Post by GFischer »

pm90 wrote: post #53
GFischer wrote: post #41

Earlier quoted context omitted.

I disagree. Depends on the service's business model obviously, but there are services where the convenience will more than offset the extra costs. Once the company grows big enough, yes, then it might make sense to go off AWS (or not - see: Netflix).

I've always found it interesting that Netflix has not at least tried to go off AWS; if only because Amazon has a competing service with Amazon video. I'm sure its not an easy problem to solve, but Dropbox has gone off AWS as well; it seems like they would be much better served with their own "Video Cloud" with specialized hardware for streaming/processing videos.

Dropbox is an example where their core business is very data-intensive and AWS costs can be considerable.

I'm thinking of services, say the automated robo-built sadwiches, or the Easy 401 service, or the luxury shoes startup (all real YC-accepted companies), where the core business proposition isn't necessarily dependent on having a huge infrastructure.

Re: A million-dollar engineering problem

#68

Post by burntwater »

Had an interesting experience when I went to the pricing page for Segment - Had a little sales guy pop up in the lower right corner asking "Would (my enterprise employer name) like to know if you qualify for a volume discount?"

I only recently started working (and web browsing) from an enterprise network, so maybe this has been done before, but it's my first time seeing it and I thought it was really interesting.

Edit: To be clear, I'm not intrigued at the little guy himself, I'm intrigued at how personalized it was.

Re: A million-dollar engineering problem

#69

Post by QuinnyPig »

asptimothy wrote: post #11
nik736 wrote: post #5

Have you guys considered going bare metal or a hybrid approach? With such immense spendings (even when saving the $1m/yr) it would probably be a lot cheaper.

I was curious about that myself. What's the best way to model the costs associated with maintenance overhead that comes with bare-metal, vs the savings from managing bare-metal servers using a service (like packet), co-locating your own hardware or running your own datacenter. My gut feeling is that you have to get to an extraordinary size to realize any meaningful savings, but that's primarily based on Dropbox's mig…

It depends upon your constraints.

As a for-instance, I was asked this exact question a year or so ago about an on-prem object store instead of S3.

The break-even price to go multi-region was ~15PB on paper; that included DC space, hardware, software (build vs buy was another factored discussion), and the staff to run it.

That assessment was delivered with the caveat that their uptime was not going to approach S3's by any stretch of the imagination-- and their infrastructure outages weren't going to sync with "most of the internet's."

It's a complex topic, and there are many hidden costs...

Re: A million-dollar engineering problem

#70

Post by kornish »

burntwater wrote: post #68

Had an interesting experience when I went to the pricing page for Segment - Had a little sales guy pop up in the lower right corner asking "Would (my enterprise employer name) like to know if you qualify for a volume discount?" I only recently started working (and web browsing) from an enterprise network, so maybe this has been done before, but it's my first time seeing it and I thought it was really interesting. Edi…

Did the box have a "Powered by x" statement anywhere? Would be curious to know if it's Intercom or something else.
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