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Dropbox saved $75M over two years by building its own infrastructure (2018)

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Re: Dropbox saved $75M over two years by building its own infrastructure (2018)

#61

Post by ericbarrett »

calderarrow wrote: post #3

I think this quote really hits the nail on the head and confirms what a lot of people may have intuitively known about the value of cloud providers: But once certain startups turn into big companies with hundreds of millions of users, with computing needs that they’ve come to intimately understand, it can be far more efficient to set up computing infrastructure designed exactly with those needs in mind. I think the m…

You’ve described the historical value of cloud computing perfectly. That said, I think the days where all but the largest or most stubborn companies run their own datacenters are coming to a close.

The problem will be finding skilled labor. Short-haul networking, power configurations, thermal load, hardware maintenance; these and many more are specific skills that can’t be learned overnight. Data center work used to be a viable middle-class career, but the pay scale for it has gone down and down. Companies that do run their own DCs like Google and Facebook have a few centralized experts, a thin professional staff on-prem, and an army of minimum wage disk swappers who are told what to do by a ticket system, just like an Amazon warehouse worker. The knowledge of how to build and run these things is all at the top now.

I’m not saying the jobs or talent pool are gone. Just that they’re shrinking, and will continue to shrink. Like the manufacturing industry, the fewer people there are who are comfortable working with real hardware, the harder it will be to start anew.

Re: Dropbox saved $75M over two years by building its own infrastructure (2018)

#62

Post by H8crilA »

post_break wrote: post #41
technologia wrote: post #40

Earlier quoted context omitted.

If you see it from the perspective of being able to retain staff or hiring new employees, it definitely seem worth it.

Except now you have to hire a staff to maintain and manage hardware, batteries, generators, buildings, security?

Yup, exactly. What's your new R&D spend going to be going forward, now that you have to maintain an edge in so many new areas? It really is a mediocre saving for a company this big.

Re: Dropbox saved $75M over two years by building its own infrastructure (2018)

#63

Post by wlll »

wrkronmiller wrote: post #12
calderarrow wrote: post #3

I think this quote really hits the nail on the head and confirms what a lot of people may have intuitively known about the value of cloud providers: But once certain startups turn into big companies with hundreds of millions of users, with computing needs that they’ve come to intimately understand, it can be far more efficient to set up computing infrastructure designed exactly with those needs in mind. I think the m…

Dropbox is in a relatively specific situation wherein their cloud costs would be extremely high (storage, bandwidth) and their in-house technical skills are probably quite good.

There's a lot of companies that have the scale to benefit from running their own tech, fewer who have the skills and number of people, but it's not a small niche even so.

Re: Dropbox saved $75M over two years by building its own infrastructure (2018)

#64

Post by ProAm »

calderarrow wrote: post #3

I think this quote really hits the nail on the head and confirms what a lot of people may have intuitively known about the value of cloud providers: But once certain startups turn into big companies with hundreds of millions of users, with computing needs that they’ve come to intimately understand, it can be far more efficient to set up computing infrastructure designed exactly with those needs in mind. I think the m…

> I think the main advantage of cloud providers is to offset the risk of purchasing equipment that eventually is no longer needed,

Every corporate use case I have seen is labor based. They dont want the overhead of salary and healthcare for the IT department. Even if long term they end up paying more, they always view it has pay for it now or pay for it later. And they always choose later because they dont know better.

(none of these have been the scale of dropbox, that is different)

Re: Dropbox saved $75M over two years by building its own infrastructure (2018)

#65

Post by toast0 »

awill wrote: post #15
streamich wrote: post #11

I would have loved to see them buying Wasabi instead of building their own infrastructure, and becoming the biggest client of Wasabi at the same time.

no serious company wants to be 'the biggest client' of a company. You'll find all the scaling issues.

It depends on the company you're the client of. I worked at a top 3 client of one company, and we were also the top client of another company where I was the only engineer dealing with them. It worked out well, because they were very responsive to our issues, were able to scale, and we used the least hands on parts of their service offerings.

Re: Dropbox saved $75M over two years by building its own infrastructure (2018)

#66

Post by dralley »

clubdorothe wrote: post #54

Wondering why a company like Netflix did the opposite?

Doesn't Netflix have cache boxes hooked directly into the ISP networks?

I'm sure Netflix uses a lot of AWS, but as a percentage of their total traffic (which is absolutely enormous), it's probably not that much.

Re: Dropbox saved $75M over two years by building its own infrastructure (2018)

#67

Post by jokethrowaway »

shay_ker wrote: post #2

Does anyone know what the break-even point is for building/managing your own infrastructure, vs. using cloud services? I'm also curious - what's the rough time/cost of moving to your own infrastructure? I'm sure it depends on lots of things, but looking for a ballpark. 1 year + 10 engineers? 5 years + 100 engineers?

It depends hugely on your cost of staffing.

Also, there is not only aws vs on prem.

There are solutions in the middle where you don't have all of the AWS services but price is much lower.

I've seen very average businesses spending 1mln per year in AWS for, really not much. IMHO most mid businesses would be better off renting servers and having some staff maintaining them.

Re: Dropbox saved $75M over two years by building its own infrastructure (2018)

#68

Post by b112 »

post_break wrote: post #41
technologia wrote: post #40

Earlier quoted context omitted.

If you see it from the perspective of being able to retain staff or hiring new employees, it definitely seem worth it.

Except now you have to hire a staff to maintain and manage hardware, batteries, generators, buildings, security?

No. That is factored into the new costs, which with all of those things, plus initial / ongoing hardware buys, saved that $75M.

Re: Dropbox saved $75M over two years by building its own infrastructure (2018)

#69

Post by ClumsyPilot »

igor_a wrote: post #26

$75M over two years is compensation of 75 engineers in the SV (not even taking into account opportunity cost - this 75 folks could innovate and bring more revenue) So either it's not $75m or it was a bad idea.

Some businesses are not about innovation, some businesses are about margins. Personal cloud storage is that business - people shop around and buy on cost.

I use OneDrive because it's free with Ms Office, which I need anyway, and their 'family plan' pricing is great. I decide cloud storage for like 5 accounts, backups of family photos, etc.

That is in spite of the fact that dropbox is miles better, and has extra features - they dont move the needle.

Re: Dropbox saved $75M over two years by building its own infrastructure (2018)

#70

Post by ramraj07 »

wrkronmiller wrote: post #12
calderarrow wrote: post #3

I think this quote really hits the nail on the head and confirms what a lot of people may have intuitively known about the value of cloud providers: But once certain startups turn into big companies with hundreds of millions of users, with computing needs that they’ve come to intimately understand, it can be far more efficient to set up computing infrastructure designed exactly with those needs in mind. I think the m…

Dropbox is in a relatively specific situation wherein their cloud costs would be extremely high (storage, bandwidth) and their in-house technical skills are probably quite good.

Netflix is a counterpoint? A good fraction (though not majority probably) of their cost is probably bandwidth and computation yet they continue to offload that to a cloud provider, who's a direct competitor no less.
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