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Is the Cloud Recession-Proof?

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Re: Is the Cloud Recession-Proof?

#91

Post by JackPoach »

irjustin wrote: post #86

Is anything 'recession proof', 'crash proof'? I dislike articles like this because nothing is "proof/immune" if the hurt/pain is strong enough. I 100% believe that many cloud companies are recession resistant, but it really depends what market forces that recession is driven by. If this was 2008 crash again, we'd say all real estate cloud companies were not recession proof.

Different industries are affected by recession in different ways. Generally speaking, recession proof industries are affected much less than the general economy. Some examples of recession-proof industries include grocery stores, alcohol manufacturers, gas stations (funny in today's reality), some entertainment segments (movie making and music business), national defense. Generally speaking, if it's a necessity (food) - it's considered to be much more recession proof than discretionary spending industries. IT or cloud are two general terms but parts of them can definitely grow during recession.

Re: Is the Cloud Recession-Proof?

#92

Post by JackPoach »

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…

Well, the cloud is supposedly 'scalable'. And by that we all thought about 'scaling up'. But scaling down or shrinking is 'scalable' too and now is the time to find out if that's going to happen. Ironically, more businesses right now need to be scalable in terms of shrinking without dying than the original premise of being scalable (growing bigger and bigger without interruptions).

Re: Is the Cloud Recession-Proof?

#93

Post by nucleardog »

chii wrote: post #51
jlg23 wrote: post #45

Earlier quoted context omitted.

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...

$120m is not ridiculous for a medium to large enterprise. For an engineering team of ~1000, just the build servers will cost about $1-5m a month (depending on what's being done there).

That seems... excessive.

Let's say we pair engineers up just to make my math a little easier here. One engineer's allotment goes to compute resources, another goes to storage.

At the low end, that's a 32 core/128GB RAM build server with 10TB of storage per pair.

At the high end, depending which way you spec that out, that's 96 core/385GB RAM with 50TB per pair.

What the hell are you guys building?!

Re: Is the Cloud Recession-Proof?

#94

Post by jayp »

tjr225 wrote: post #64
opportune wrote: post #62

Earlier quoted context omitted.

I think it would be easy to hit especially if you were spending on cloud SAAS offerings + actually have a lot of users. I know I've managed to spend a few $10K/month on a project before - and it was actually celebrated because it was less than half the cost of what it was replacing.

Yeah but that’s almost my point; 20k/m is an order of magnitude less than 10 million/month.

Technically, 2.5 orders of magnitude.

Re: Is the Cloud Recession-Proof?

#95

Post by markvdb »

cco wrote: post #79
pram wrote: post #34

Earlier quoted context omitted.

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.

Why would you, if in good times you can enlarge your own budget/headcount/importance/... just by increasing budget no questions asked, that's a safer way ahead. You risk devaluing your own position in the company for an uncertain gain...

Re: Is the Cloud Recession-Proof?

#96

Post by nitwit005 »

JackPoach wrote: post #91
irjustin wrote: post #86

Is anything 'recession proof', 'crash proof'? I dislike articles like this because nothing is "proof/immune" if the hurt/pain is strong enough. I 100% believe that many cloud companies are recession resistant, but it really depends what market forces that recession is driven by. If this was 2008 crash again, we'd say all real estate cloud companies were not recession proof.

Different industries are affected by recession in different ways. Generally speaking, recession proof industries are affected much less than the general economy. Some examples of recession-proof industries include grocery stores, alcohol manufacturers, gas stations (funny in today's reality), some entertainment segments (movie making and music business), national defense. Generally speaking, if it's a necessity (food…

I wouldn't count on even supposed essentials like food being all that resistant. It used to be that people couldn't cut their food spending significantly because it was mostly the basics of bread or rice to survive. Those days are gone across much of the world. I could cut my food spending to a fairly small fraction of what I am now if I truly needed to.

Re: Is the Cloud Recession-Proof?

#97

Post by remus »

antsar wrote: post #48
jlg23 wrote: post #45

Earlier quoted context omitted.

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...

Its AWS. Isn't "obscure high costs" the name of the game? But now people have the time and incentive to dig into those costs more critically.

I guess the question is why would you wait to make savings like that? $10m/month would pay for a small 'cloud cost cutting' team with plenty of change left over.

Re: Is the Cloud Recession-Proof?

#98

Post by JackPoach »

nitwit005 wrote: post #96
JackPoach wrote: post #91

Earlier quoted context omitted.

Different industries are affected by recession in different ways. Generally speaking, recession proof industries are affected much less than the general economy. Some examples of recession-proof industries include grocery stores, alcohol manufacturers, gas stations (funny in today's reality), some entertainment segments (movie making and music business), national defense. Generally speaking, if it's a necessity (food…

I wouldn't count on even supposed essentials like food being all that resistant. It used to be that people couldn't cut their food spending significantly because it was mostly the basics of bread or rice to survive. Those days are gone across much of the world. I could cut my food spending to a fairly small fraction of what I am now if I truly needed to.

There's a big difference between what you CAN and what you WILL cut. Alcohol and tobacco aren't necessary to survive. But alcohol consumption is some countries have actually gone UP during the lock down. Not sure about cigarettes, didn't see any stats. We'll see what happens to the food industry. Milk consumption is WAY down, because up to 50% of milk products were sold through restaurants. But wheat and rice producers may not be negatively affected or may even gain on the recession. Think about this in the following terms. Yes, you can cut your food BUDGET by 30% and survive. But you won't be able to cut your CALORY intake by 30% without starving.

Re: Is the Cloud Recession-Proof?

#100

Post by dannyw »

cachestash wrote: post #89
blackrock wrote: post #12

The cloud appears to be a short term gain to achieve operational readiness and efficiency, but it becomes a long term loss in terms of ongoing operational costs.

> it becomes a long term loss in terms of ongoing operational costs. Based on what, that sounds like something you have just pulled out of the air.

AWS bandwidth costs, even with their volume pricing tiers, are >10x as much as you'd pay than if you'd bought it directly.

On a small enough scale, it doesn't matter so much. When you're paying millions a month, it matters a huge deal.

Even on a micro scale:

* Vultr, DigitalOcean are 2-4x cheaper than AWS (and they are established companies with a track record of reliability, as well as 20+ locations around the world)

* Even AWS offers "Lightsail" which are significantly discounted VPSes with included bandwidth that costs more than the Lightsail price! Their ToS prevents you from using it as proxies... lol.

* Want to save money on S3? Get some colo space, buy some Enterprise HDDs and set it up on RAID, and your opex is going to be 5-10% the cost of S3. Or SSDs if your access patterns require it. Set up some SMART-based email alerts and an offsite backup procedure, and it's absolutely reliable enough for the vast majority of business use cases. P.S. even S3 silently loses files...

* Using CloudFront? It might be easy and integrated, but it's absolutely not going to be the cheapest or best value. It's really marked up, heavily. Spend a few hours talking to leading competitors and you'll get a quote for half your CloudFront bill, if not less; often for a better CDN.

* Trying AWS Rekognition, or other ML-as-a-service products? Hire some data science intern and they can copy/paste the leading open source project from GitHub, train it on your data, and you'll quite possibly get better results than generic ML solutions... for as low as 1/100th the cost. (Real example).

Yes, you gotta maintain it, but I find that people generally think maintenance is a bigger monster than it actually is. AWS has huge profit margins: where do you think it comes from? Hint: it makes it from you.

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