Is the Cloud Recession-Proof? • Hacker News Board

Re: Is the Cloud Recession-Proof?

#31

Post by throwawayoverhe » Sun, May 03, 2020, 9:22 PM UTC

jrockway wrote: post #15

EmielMols wrote: post #13

Earlier quoted context omitted.

For those wondering as well, at 10b quarterly revenue, 10m monthly is ~.3% of all AWS revenue.

It seems likely to me that a recession or pandemic affects more than just the OP's business, so while that one customer is probably meaningless to AWS, the thought process that led to scaling back spending could be meaningful.

Interestingly, I had the opposite takeaway.

0.3% of monthly revenue from a single customer's reduced spending only a couple months in to a multi-year recession is pretty alarming.

Makes me wonder if OP's company is particularly exposed to retail, travel, or another sector severely impacted by the first order effects of the virus.

Re: Is the Cloud Recession-Proof?

#32

Post by jhwang5 » Sun, May 03, 2020, 9:25 PM UTC

Hokusai wrote: post #29

Right now a more important question is how fast is the Cloud growing? Will it outgrowth the recession? The Cloud is still growing as many businesses are still moving towards it. If the natural growth of the Cloud is bigger than how much the economy shrinks then the growth will still be positive or flat. I work for a tech company in this situation. It has grown a lot the past years and was expected a lot of growth in…

I think growth of cloud business - net / net - will decrease in 2020.

1) The basket of customers who may do a big Cloud migration may shy away from big CAPEX projects (unless it's a very low hanging fruit that saves money).

2) It's not completely obvious whether cloud saves money, it really depends on the customer case by case.

3) The big sales pitch for cloud migration was so it can add features faster. Adding new features isn't on top of people's minds right now

4) Existing cloud customer will find ways to optimize their cloud spend.

Re: Is the Cloud Recession-Proof?

#33

Post by tjr225 » Sun, May 03, 2020, 9:33 PM UTC

itwy wrote: post #23

cunac wrote: post #11

Earlier quoted context omitted.

having a hard time to see how you scale down 120 mil a year. How much you spend yearly now

The guy is lying, obviously.

Maybe, maybe not. But I think I agree with you- 10m/m is a comically large number(I wonder how many companies spend even 1/100th of that a month on cloud compute?) and I have no reason to believe this person so why would I?

Re: Is the Cloud Recession-Proof?

#34

Post by pram » Sun, May 03, 2020, 9:39 PM UTC

tjr225 wrote: post #33

itwy wrote: post #23

Earlier quoted context omitted.

The guy is lying, obviously.

Maybe, maybe not. But I think I agree with you- 10m/m is a comically large number(I wonder how many companies spend even 1/100th of that a month on cloud compute?) and I have no reason to believe this person so why would I?

Correct there is no reason to believe me. However for context and perspective our quarterly revenue is usually around $3 billion. $10 million is not comically large. I’m not talking about a startup. hth

Re: Is the Cloud Recession-Proof?

#35

Post by echelon » Sun, May 03, 2020, 9:40 PM UTC

pram wrote: post #2

Definitely not. My company has been drastically scaling back our AWS spend and I mean about a $10m+ a month reduction. I guarantee we're not alone. All the gee-whiz resume-driven-development type project infrastructure was the first to go lol.

If you had to do it all over again, would you still choose AWS? Or would you go with another cloud, or perhaps even non-managed bare metal?

Re: Is the Cloud Recession-Proof?

#36

Post by hnarn » Sun, May 03, 2020, 9:46 PM UTC

The cloud is the opposite of recession proof. Why do you use the cloud in the first place? Flexibility, scale, ease of operations. What are you gonna do with your servers during a recession, put them on Craigslist? Are you gonna put your entire datacenter on there too?

The same mechanic that makes the cloud attractive in the first place is what will bring the hammer down in a serious recession. Companies will turn every stone to use less capacity and save money, and they will easily be able to do it.

Re: Is the Cloud Recession-Proof?

#37

Post by reilly3000 » Sun, May 03, 2020, 9:48 PM UTC

hnarn wrote: post #36

The cloud is the opposite of recession proof. Why do you use the cloud in the first place? Flexibility, scale, ease of operations. What are you gonna do with your servers during a recession, put them on Craigslist? Are you gonna put your entire datacenter on there too? The same mechanic that makes the cloud attractive in the first place is what will bring the hammer down in a serious recession. Companies will turn ev…

There are a whole love of reservations on instances and lock-in to databases, serverless, networking infrastructure, etc. Its hard to leave.

Re: Is the Cloud Recession-Proof?

#38

Post by scruffups » Sun, May 03, 2020, 9:50 PM UTC

itwy wrote: post #23

cunac wrote: post #11

Earlier quoted context omitted.

having a hard time to see how you scale down 120 mil a year. How much you spend yearly now

The guy is lying, obviously.

Apple spends more than $30M/mo. on AWS. [1]

Comcast, I was told, spends over $1B/year on AWS but I cannot find any public references to back it up.

[1] https://www.cnbc.com/2019/04/22/apple-spends-more-than-30-mi...

Re: Is the Cloud Recession-Proof?

#39

Post by JMTQp8lwXL » Sun, May 03, 2020, 9:50 PM UTC

grey-area wrote: post #21

jarym wrote: post #10

Earlier quoted context omitted.

A $10m/month reduction is quite significant. Question is, was your company spending $10m/month extra unnecessarily or have they had to cut down and go without important things in getting this kind of reduction?

A reduction in customer numbers means a reduction in the resources required. Many businesses associated with outdoor activities, sports, travel etc etc will be seeing less traffic at the moment. Many business are pretty much closed. This will then severely impact other businesses which sell to those businesses, and so on, all the way up the chain to advertising and cloud providers.

The Ubers and Lyft's save by committing to a certain level of spend. They have paid -- might as well use the resources, anyways -- unless they've since negotiated with Amazon.

Re: Is the Cloud Recession-Proof?

#40

Post by JMTQp8lwXL » Sun, May 03, 2020, 9:53 PM UTC

MattGaiser wrote: post #5

The cloud is this recession proof because this recession is also a people retreat to their homes recession.

In what recession do people not retreat to their homes? Recessions are usually associated with higher levels of unemployment, presumably with that extra time spent at the home (as opposed to going out, and spending money).