Bank of America's CEO says it's saved $2B per year by building its own cloud • Hacker News Board

Re: Bank of America's CEO says it's saved $2B per year by building its own cloud

#21

Post by vkaku » Mon, Oct 21, 2019, 5:10 PM UTC

In my opinion, a company can save money on a cloud if it has these things:

- Access to cheap real estate

- Access to enough human capital, especially a team of 80+ to operate all aspects of a cloud: hardware, switches, openstack / kubernetes

- Requires scale of 20k+ servers = 320k+ VMs and a strong inclination to not host on AWS/Azure/Others.

- Lease to servers costing about $250 / server / mo. With AMD, you could go half of that, with VMs costing $10 a month. Add network costs of $15 / 2 ports / server / month.

Re: Bank of America's CEO says it's saved $2B per year by building its own cloud

#22

Post by stestagg » Mon, Oct 21, 2019, 5:11 PM UTC

reilly3000 wrote: post #6

Is this a story about virtualization? I fail to see the distinction between data center and private cloud in this context.

I think in this context it relates to the overheads of provisioning new services.

Traditional virtualized hosting environments typically also come with varying levels of technical overheads when setting up new boxes.

What bofa have is a virtually self-service (some business approvals needed) user interface with the ability for devs to set up new virtual servers with little/no knowledge of the underlying hosting infrastructure.

Re: Bank of America's CEO says it's saved $2B per year by building its own cloud

#23

Post by manigandham » Mon, Oct 21, 2019, 5:11 PM UTC

thorwasdfasdf wrote: post #7

toomuchtodo wrote: post #4

Earlier quoted context omitted.

And it's still cheaper than public cloud. Look at cloud provider margins, that profit is your opportunity at this scale (and BoA, JPM, etc are big enough to run their own technology teams, and do, having worked with them). Fat public cloud margins come from somewhere. This isn't a religious argument. Some workloads are fine on prem (known load profiles, shed infrequent traffic spikes instead of bursting), some need c…

but why aren't those fat profit margins being competed away by competitors?

Because of the capital and talent required to build a competitive offering. Even large companies like IBM and Oracle have failed to keep up.

The big 3 clouds have built a nice moat and can charge whatever they want. They still compete on prices but it's clear they're colluding on network fees at least.

Re: Bank of America's CEO says it's saved $2B per year by building its own cloud

#24

Post by gumby » Mon, Oct 21, 2019, 5:11 PM UTC

I'm not really sure why this should be a surprise. Just as big companies use a mixture of owned and rented real estate for various reasons, the same is true of other large expenses. If you have a large, predictable, core workload it makes sense to bring it in house, and use the elastic (rented) resources for unpredictable stuff (e.g. new efforts).

It's not like Amazon doesn't know this too (e.g. they try to make the transition harder by offering lots of proprietary services that help you ramp up faster, but can't be used elsewhere)

Re: Bank of America's CEO says it's saved $2B per year by building its own cloud

#25

Post by toomuchtodo » Mon, Oct 21, 2019, 5:12 PM UTC

manigandham wrote: post #23

thorwasdfasdf wrote: post #7

Earlier quoted context omitted.

but why aren't those fat profit margins being competed away by competitors?

Because of the capital and talent required to build a competitive offering. Even large companies like IBM and Oracle have failed to keep up. The big 3 clouds have built a nice moat and can charge whatever they want. They still compete on prices but it's clear they're colluding on network fees at least.

It's not just capital or talent. I have seen first hand non-tech executive decision makers pick a specific cloud provider because of the old adage "No one got fired for buying IBM". That momentum is incredibly hard to compete against. Google Cloud is fairly solid from a technology perspective, not to mention Google's deep pockets, and still has an uphill climb against MS and AWS.

Re: Bank of America's CEO says it's saved $2B per year by building its own cloud

#26

Post by stiray » Mon, Oct 21, 2019, 5:12 PM UTC

Someone1234 wrote: post #14

I think a strong argument can be made either way. There's definitely financial savings to be had by doing it in-house (either literally or utilizing existing data centers as here). But what I've experienced is that companies are often attracted to Big Cloud™ not just for financial reasons but to flatten/simplify their corporate reporting structure. It is the ultimate delegation. This isn't simply about having fewer s…

...but they are also acumulating know how which they might be able to sell in decades to come. Even more if the scenario of mainframes, IBM software, Oracle databases,... will happen and sooner or later I believe it will. Currently cloud providers are operating on absolute minimum, to get as much customers as possible into their trap. And for sure, it is highly beneficial for startups that cant afford to buy on premise hardware, but this wont last forever. History has shown that immediately when you are vendor locked, you will be charged for your dependance. Even more if people beeing able to build on premise infrastructure are becoming rare beasts. I would be glad to see I am wrong but history proves it is best teacher.

Re: Bank of America's CEO says it's saved $2B per year by building its own cloud

#27

Post by manigandham » Mon, Oct 21, 2019, 5:13 PM UTC

> "Now, it's pared that down to 70,000 servers, of which 8,000 of those are handling the bulk of the load."

I wonder what the other 62000 servers are doing.

Re: Bank of America's CEO says it's saved $2B per year by building its own cloud

#28

Post by x0x0 » Mon, Oct 21, 2019, 5:14 PM UTC

thorwasdfasdf wrote: post #7

toomuchtodo wrote: post #4

Earlier quoted context omitted.

And it's still cheaper than public cloud. Look at cloud provider margins, that profit is your opportunity at this scale (and BoA, JPM, etc are big enough to run their own technology teams, and do, having worked with them). Fat public cloud margins come from somewhere. This isn't a religious argument. Some workloads are fine on prem (known load profiles, shed infrequent traffic spikes instead of bursting), some need c…

but why aren't those fat profit margins being competed away by competitors?

There's not much competition because of enormous lockin effects. Once a cloud provider is chosen, you're pretty wedded to it.

Inside your dev team, every institutional bit of knowledge about how AWS works, how to configure it, how to work around their mostly bad docs, and how to navigate their hot garbage UI.

Every line of code that touches an AWS api.

If you need data centers in certain regions for eg localization laws, AWS is afaik the only choice.

Re: Bank of America's CEO says it's saved $2B per year by building its own cloud

#29

Post by valbaca » Mon, Oct 21, 2019, 5:15 PM UTC

panarky wrote: post #3

Bad title. They didn't switch from AWS to private cloud. They consolidated 60 data centers with 200k servers to 23 data centers and 70k servers.

The title isn't bad: "ignoring" implies they were never on AWS and just went their own way.

Re: Bank of America's CEO says it's saved $2B per year by building its own cloud

#30

Post by m0xte » Mon, Oct 21, 2019, 5:15 PM UTC

api wrote: post #18

sairahul82 wrote: post #5

If you know your traffic well, private cloud saves a lot of money. Few years back i bet hybrid clouds will take over and for some reason it did not happen. I still believe hybrid cloud is the solution for mid size and up companies. You definitely need cloud provides for handling traffic spikes.

Nobody ever got fired for using AWS.

Yet