Live data from Hacker News

FedEx to close data centers, retire mainframes

datacenterdynamics.com

71–80 of 573 posts

Re: FedEx to close data centers, retire mainframes

#71
post #19

Ultimately companies that abdicate their informatics operations like this will give their profits to their data-center operators, who will be empowered to charge them whatever price they want. Because what's their BATNA? Migrating from Azure to AWS when Microsoft doesn't want to let them? Renting your information infrastructure is a great way to reduce startup costs, but down the road, that information infrastructure…

You can say the same thing for hundreds of parts of a company like FedEx. For example FedEx flies Boeing jets. It's completely reliant on Boeing for parts for those jets. Presumably Boeing can charge whatever it wants. Your company is always going to be reliant on other suppliers and contracts. Unless you're planning on building your own independent country in some location that has all the natural resources you need…

It's true, of course, that every company is deeply reliant on its web of suppliers and customers, and it is common for a company to have a single supplier or customer that has enormous power over it. But I think you may not appreciate the impact of that situation.

FedEx might have a viable alternative to Boeing for repair parts, but not for planes, and more broadly I think you could make that argument about US airlines in general in the late 20th century: despite things like the MD-80 (before the merger) they really had no alternative to Boeing. It is perhaps not a coincidence that the net profits of US airlines in the late 20th century were almost exactly zero, while Boeing was and is one of the most profitable companies in the world. So far Boeing isn't squeezing FedEx that way, but not because it can't.

(I do note, though, that FedEx owns its own jets rather than renting them.)

But I think there's a different sense in which informatics are more core to FedEx than even flying. FedEx is a corporation, which in its essence is a set of business processes: relationships, practices, and information; unlike a 19th-century railroad, its physical assets like airplanes are relatively expendable by comparison. Historically, those processes happened mostly in people's heads, especially the heads of its managers, but today the vast majority of FedEx's business processes are automated, which means they happen in FedEx's data centers.

And whether those automated business processes happen at all, and how well they happen, is a matter of competence in informatics. Dan Luu argues convincingly that Twitter's kernel team has been key to their ability to execute in https://danluu.com/in-house/; FedEx needs not only data centers but a kernel team and a convex optimization algorithms team.

It's extremely common for companies that are deeply dependent on a single supplier or customer to end up either merged into that other company or bankrupted by the situation.

As for the country, when I set it up I'll be needing yeomanry regiments. You in?

Re: FedEx to close data centers, retire mainframes

#72
post #23

Making accurate calculations of data center cost is of course complicated and rarely manages to take everything into account, but the common knowledge I’ve heard is that there comes a point when a company is so large that going on-prem is what actually saves them a lot of money. If FedEx is not large enough to be one of those companies, how large do you actually have to be? Or has cloud pricing changed to the point w…

Technology scales faster than fedex's data needs. Maybe somewhere in the future the reverse trend happens as their needs can be met with very small servers. Though I've always been wary of putting your data somewhere because getting your data to a competitor costs alot of money.

> Technology scales faster than fedex's data needs.

I don't think this sentence has meaning

Re: FedEx to close data centers, retire mainframes

#73
post #19

Ultimately companies that abdicate their informatics operations like this will give their profits to their data-center operators, who will be empowered to charge them whatever price they want. Because what's their BATNA? Migrating from Azure to AWS when Microsoft doesn't want to let them? Renting your information infrastructure is a great way to reduce startup costs, but down the road, that information infrastructure…

I think this is one side of an argument. It's valid, and it needs to be heeded, but still incomplete.

Cloud setups are useful, as are many ways of their associated architecture/infrastructure elements. Saying no to these is problematic too.

It is true that cloud computing has become a monopolistic, categorically non-neutral sector. They'll have you over a barrell.

So, dilemmas. Difficult strategic choices.

Re: FedEx to close data centers, retire mainframes

#74

Earlier quoted context omitted.

You can say the same thing for hundreds of parts of a company like FedEx. For example FedEx flies Boeing jets. It's completely reliant on Boeing for parts for those jets. Presumably Boeing can charge whatever it wants. Your company is always going to be reliant on other suppliers and contracts. Unless you're planning on building your own independent country in some location that has all the natural resources you need…

The better analogy would be that Fedex, since they need to transport things from city to city, could choose to buy jets to transport with instead of renting them or contracting a company to fly for them, which they already do. To remove datacenters is more like removing the jets. Edit: removed rude phrasing.

> The comparison you meant

No that’s not what I wrote.

You don’t buy a jet outright and forget about the supplier - you’re eternally reliant on their service, certification, parts, etc, as regulation is so high.

Re: FedEx to close data centers, retire mainframes

#75
post #45

Earlier quoted context omitted.

"We presently own and operate four primary campus locations (“Primes”), encompassing 12 active multi-tenant data center facilities with an aggregate of up to 14 million gross square feet (GSF) of space. Our existing facilities are equipped to provide up to 490 megawatts (MW) of power, with the potential to scale to more than 1,300 MW upon full build out of our existing footprint."[0] It sounds like Switch Inc. advert…

Very common.

Do you buy by the watt though?

It also advertises the square footage but you don't buy by the sq ft either

Re: FedEx to close data centers, retire mainframes

#76
post #46
post #19

Ultimately companies that abdicate their informatics operations like this will give their profits to their data-center operators, who will be empowered to charge them whatever price they want. Because what's their BATNA? Migrating from Azure to AWS when Microsoft doesn't want to let them? Renting your information infrastructure is a great way to reduce startup costs, but down the road, that information infrastructure…

But that's only really a change when you come from commodity hardware. For those still on mainframes, what's the difference? Technically the hardware might be charged per replacement cycle instead of monthly, but vendors are just as empowered to demand whatever they want. It's certainly hard to avoid lock-in running stuff on a cloud provider, but I suspect that it is even harder when depending on ye olde mainframe.

I agree, mainframes are almost as bad.

Re: FedEx to close data centers, retire mainframes

#77
post #36

Earlier quoted context omitted.

Without a doubt, a future generation of executives will revisit and reverse the decision to rent all information infrastructure, but that will likely be many, many years down the road. In the meantime, the current generation of executives who made this decision will look very smart for saving the company lots of money for a good number of years. And they stand to benefit personally from it. They're doing the rational…

I used to work with a very smart man that I'm sure was some kind of secret genius. He's was that sort of tech gofer. Hardware, software, didn't matter, if there was a problem he'd solve it. Sort of guy you'd see carrying a thick ass SQL book around because he 'needed to learn it' to solve just one little problem. He built whole entire solutions for the company I worked at in his spare time that the company once tried…

Never confuse movement for action :-)

Re: FedEx to close data centers, retire mainframes

#78
post #36

Earlier quoted context omitted.

Without a doubt, a future generation of executives will revisit and reverse the decision to rent all information infrastructure, but that will likely be many, many years down the road. In the meantime, the current generation of executives who made this decision will look very smart for saving the company lots of money for a good number of years. And they stand to benefit personally from it. They're doing the rational…

I used to work with a very smart man that I'm sure was some kind of secret genius. He's was that sort of tech gofer. Hardware, software, didn't matter, if there was a problem he'd solve it. Sort of guy you'd see carrying a thick ass SQL book around because he 'needed to learn it' to solve just one little problem. He built whole entire solutions for the company I worked at in his spare time that the company once tried…

In this sense, Oscar Wilde was the executive's executive: "I have spent most of the day putting in a comma and the rest of the day taking it out."

Re: FedEx to close data centers, retire mainframes

#79
post #23

Making accurate calculations of data center cost is of course complicated and rarely manages to take everything into account, but the common knowledge I’ve heard is that there comes a point when a company is so large that going on-prem is what actually saves them a lot of money. If FedEx is not large enough to be one of those companies, how large do you actually have to be? Or has cloud pricing changed to the point w…

Technology scales faster than fedex's data needs. Maybe somewhere in the future the reverse trend happens as their needs can be met with very small servers. Though I've always been wary of putting your data somewhere because getting your data to a competitor costs alot of money.

I don't think it's the server costs they care about it's stuff like db maintenance, security, security, and security. Security professionals are expensive, and it's very hard to get right in house on metal.

Re: FedEx to close data centers, retire mainframes

#80
post #36

Earlier quoted context omitted.

Without a doubt, a future generation of executives will revisit and reverse the decision to rent all information infrastructure, but that will likely be many, many years down the road. In the meantime, the current generation of executives who made this decision will look very smart for saving the company lots of money for a good number of years. And they stand to benefit personally from it. They're doing the rational…

It's amazing there are no other voices in the room pushing back against this. It really makes you wonder how companies even function at all, much less make money. Being so short sided never ends well.

The optimize for the near term and after a while some other company optimizing for their near terms as startups stumble upon an awesome new product-market fit and upend the previous companies.

There is no grand plan, there's just evolution.

Post reply on HN