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

businessinsider.com

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

#31

Post by chatmasta »

stiray wrote: post #26
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 premi…

Operating at a minimum? How do you come to that conclusion? From a pure cost of infrastructure perspective (ignoring all the human elements), the cloud is always more expensive than any other option. It’s got some of the most ridiculous margins and price gouging of any business out there.

I think the opposite will happen. Cloud providers are becoming commoditized. Kubernetes, blah blah. Developers hate lock-in, and on a long time scale, developers drive tech decisions. Nowadays new software is cloud agnostic, and it will continue to be that way. This is commoditization, which generally drives down prices.

That said, buying commodities from a market with four participants is more like buying from a cartel than a marketplace. I definitely worry about the consolidation of the world’s IT spending going into the coffers of three or four massively profitable and morally corrupt corporations.

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

#32

Post by vshastry »

You’re also neglecting TTM as a consideration. As an example, I’m stuck having to wait 6 weeks to get new hardware provisioned into an available slot in one of my data centers to spin up a new Hadoop cluster, something my team could probably do in a couple of hours in the cloud.

That being said, we control the HW and SW stacks end to end so I don’t have to worry as much about the nightmare scenarios the NordVPN folks went public about today. Critical given we’re in fintech ...

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

#33

Post by McAtNite »

mywittyname wrote: post #20
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…

Also reducing friction in getting products to market. A small team with their own BigCloud account is probably going to deliver a product to market much faster than one that needs to go through the friction of dealing with the various IT departments which invariably exist at large companies. There is absolutely value to delivering a product to market a year or more sooner than otherwise.

The friction from various IT departments are often beneficial. I’m probably speaking from a point of bias as I’m one of those departments, but we often have to sanity check the implementation of things and review the security implications.

I’ve encountered quite a few devs whose only focus is on achieving the specified goal without considering the full security scope. I don’t blame them, that’s what they are there for. Stepping in for ensuring the customer security and regulation requirements is what I’m here for.

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

#34

Post by zelon88 »

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…

> In this case BoA are saving money but in exchange retain additional layers of staffing, that require oversight, and ultimately decision makers willing to take risks.

I think some companies, like BOA, look at this as the safer alternative.

We all assume that large Cloud providers are bulletproof. That's just because we haven't seen them taken down yet. Someday we will. Just wait until there's another major world conflict. These global companies with outsourced IT will be in ruins because politics and digital DMZ's will keep them from acting cohesively.

For an organization like a bank that's worth over $400b that layer of staffing, equipment, oversight, and all the inefficiencies are a $400b insurance policy that you will be able to continue operating regardless of geographic or political events outside of your control.

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

#35

Post by mfer »

> Right now, the bank estimates its private cloud is 25% to 30% cheaper than public providers, though it also recognizes that probably won't last forever.

I am glad they shared this situation. We often here marketing telling us that public cloud is always better. It's nice to see different perspectives being shared and some details around them.

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

#36

Post by dwoozle »

zelon88 wrote: post #34
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…

> In this case BoA are saving money but in exchange retain additional layers of staffing, that require oversight, and ultimately decision makers willing to take risks. I think some companies, like BOA, look at this as the safer alternative. We all assume that large Cloud providers are bulletproof. That's just because we haven't seen them taken down yet. Someday we will. Just wait until there's another major world con…

Exactly. Jeff Bezos tweets something that gets Xi’s panties in a ruffle and AWS is blocked in China and Bank of America can’t do cross border payments... no way should such a big company have their eggs in such a basket.

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

#37

Post by blantonl »

chatmasta wrote: post #31
stiray wrote: post #26

Earlier quoted context omitted.

...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 premi…

Operating at a minimum? How do you come to that conclusion? From a pure cost of infrastructure perspective (ignoring all the human elements), the cloud is always more expensive than any other option. It’s got some of the most ridiculous margins and price gouging of any business out there. I think the opposite will happen. Cloud providers are becoming commoditized. Kubernetes, blah blah. Developers hate lock-in, and o…

It’s got some of the most ridiculous margins and price gouging of any business out there.

You and enterprise software should get together and have a introductory meeting...

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

#38

Post by cosmie »

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.

> for some reason it did not happen.

Part of the organizational allure of migrating to the cloud is being able to rationalize headcount. Hybrid clouds, while bringing a lot of potential upside, are complex. While you can potentially reduce the scale of labor involved, you still have to retain all of the core skillsets you already have to maintain your on-prem locations. Then add headcount to optimize the cloud deployment, _plus_ the ever elusive skillset of the individuals that can marry the two in such a way where you show operational savings from the hybrid model.

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

#39

Post by jariel »

Folks are generally misinterpreting the 'cost' of the cloud by mostly looking at data centre costs, margins etc.. The 'TCO' or 'Total Cost of Ownership' of cloud services is generally much lower than otherwise.

The cloud is valuable because of the variety of features, immediately available, at very large scale, run by very credible people with $0 in capital expenditures.

In most cases, it's worth far more than the price, which is why it's so popular.

In very, very few cases is it 'cheaper' to run one's own cloud given the massive operational overhead of hiring people with very specialised skills, risks all over the board, the enormous planning, extensive investments.

Wallmart must have 1000's of trucks but they don't 'roll their own' delivery vehicles, because there's an inherent degree of specialisation in making vehicles.

So yes - in some specific cases it makes sense to 'host': say Dropbox, just wants massive cheap storage, or Google, has special needs & scale & ability, or some entity has very specific privacy requirements - and of course I wish there were more variety in providers, especially localised ... but the cloud is essentially now the default hosting option and that's not going away because it makes a lot of sense.

The surpluses generated by such services are vast - it's a big step forward for everyone. Companies using AWS are probably profiting more in surplus than the margins in AWS.

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