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Is the Cloud Recession-Proof?

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Re: Is the Cloud Recession-Proof?

#71

Post by W-Stool »

toomuchtodo wrote: post #55
9nGQluzmnq3M wrote: post #52

Earlier quoted context omitted.

On-prem servers don't run themselves: there's hardware maintenance, depreciation, security, networking, license renewals etc etc. The typical customer I see who's moving from on-prem to cloud has a clear trigger/deadline in the form of hardware reaching EOL or licenses being up for renewal, and these aren't going away with COVID.

On prem equipment can be depreciated, and you can drag out the useful life of the equipment you own if necessary. Cloud opex evaporates each month, never to be seen again. CTOs/CIOs call the shots when times are good, CFOs when times get lean.

I'm going to use that in my daily conversations if that's OK. Truer words have never been spoken.

Re: Is the Cloud Recession-Proof?

#72

Post by jandrewrogers »

jlg23 wrote: post #45
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.

Pretty sure a typo and the million wanted to be a kilo? $120m/year for apparently unnecessary IT capacity would be hard to hide even in government contracts...

I know of a few companies burning AWS at around that rate, though they are outliers. And yes, 90+% of that is lighting money on fire. In the list of business priorities, cost containment is pretty low for some companies when capital is cheap. There is a much larger cohort of companies spending much less but wasting just as much.

Re: Is the Cloud Recession-Proof?

#73

Post by grey-area »

Horba wrote: post #43
grey-area wrote: post #22

Earlier quoted context omitted.

It's pretty easy to cut down clusters to the minimum number of nodes for them to function (say cutting 10 servers to 2), or downgrade the size of instances to compensate for lower traffic. There's no need to restructure infrastructure in most cases, if anything using a cloud provider makes this easier.

Aren't you making gp's point for him?

GP was saying there is no flexibility of infrastructure if you use cloud servers and they are therefore recession proof.

I was saying it's pretty flexible within the constraints set up, and often companies have spare capacity they could significantly scale down to save money (for example a travel company during a pandemic has very few customers), so it is flexible in the most important way (cost).

That means cloud companies will see a significant reduction in resource usage and thus revenue if enough customers do this.

Re: Is the Cloud Recession-Proof?

#74

Post by grey-area »

icedchai wrote: post #50
grey-area wrote: post #22

Earlier quoted context omitted.

It's pretty easy to cut down clusters to the minimum number of nodes for them to function (say cutting 10 servers to 2), or downgrade the size of instances to compensate for lower traffic. There's no need to restructure infrastructure in most cases, if anything using a cloud provider makes this easier.

It's "easy" to do this, but it's also just as "easy" for your service to fall over when you do it wrong. Capacity planning and performance engineering is a lost art in a world where you would simply throw money at the problem until it went away.

It's not that hard (I've done this recently for clients). If your traffic is 90% of normal for a few months, scaling down with load makes a lot of sense, then you can scale back up when ready. There are also autoscaling solutions like serverless.

Re: Is the Cloud Recession-Proof?

#75

Post by [deleted] »

pram wrote: post #34
tjr225 wrote: post #33

Earlier quoted context omitted.

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

[deleted]

Re: Is the Cloud Recession-Proof?

#76

Post by scarface74 »

carlio wrote: post #20
yipbub wrote: post #19

Earlier quoted context omitted.

Can you explain how that works please?

The short version is lockin. Unless you get very careful ops engineers making it truly cloud-agnostic, you can't even move from AWS to GCP without a huge amount of overhead. I'm a contractor and several of the companies I've worked with recently have almost hard-coded their services to expect certain things available to them on GCP or AWS that aren't as easily available on the other. You can argue that they should us…

No matter how careful you are to avoid lock-in, infrastructure has weight. You have data, network infrastructure, security audits, IAM permissions, Infrastructure as code (no Terraform is not a magic bullet), training, DNS entries etc.

I wonder how many people who think they have a large “cloud agnostic” infrastructure have actually sat down with project managers and come up with a project plan and cost analysis of a large migration.

I have witnessed how much it costs to do just a Workday migration.

Re: Is the Cloud Recession-Proof?

#78

Post by kortilla »

jjeaff wrote: post #68
9nGQluzmnq3M wrote: post #53

Earlier quoted context omitted.

Amazon as a retailer, sure, but why would this be true for Microsoft (software licenses) or Google (ads)?

Microsoft is heavily invested in software that helps with remote work like office 360 and Microsoft teams. Google is getting more traffic than ever I'm sure with people stuck at home and looking to buy or do things online. All of which are advertising their services in Google.

Google doesn’t make money from increased traffic, they make money in ad spend. It doesn’t matter if more people are staying at home if the bottom falls out on the ad buyers.

Re: Is the Cloud Recession-Proof?

#79

Post by cco »

pram wrote: post #34
tjr225 wrote: post #33

Earlier quoted context omitted.

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

I'm shocked that some middle manager with half a technical head on their shoulders didn't use this as a VP play before this; surely, "I saved the company 120m a year with no downstream consequences to yada yada" would have been worth it for someone somewhere to climb the ladder.

Re: Is the Cloud Recession-Proof?

#80

Post by remus »

cosmodisk wrote: post #41

Short term winner in this game will be Salesforce-most of their stuff is on 12 month or 3 year agreements,so it will take time to propagate.

I wonder with contracts like that whether the short term gains from having people tied in to contracts also has some longer term negative consequences?

Fortunately I've not had to work with salesforce before, but if Id just signed a big contract with them on the expectation of a growing business and then they were inflexible and enforced the contract to the letter while the rest of the business suffered then it'd leave a bit of a sour taste. Having said that, I guess if you've got your shit together you'd write clauses in to the contract to protect you from stuff like that e.g. early termination with a bit of a fee.

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