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FedEx to close data centers, retire mainframes

datacenterdynamics.com

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Re: FedEx to close data centers, retire mainframes

#111

Post by sofixa »

hnarn wrote: 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…

It's not only about size, there's also workloads to take into consideration.

Take FedEx, their operations are highly dynamic - per day but also per period. The number of packages sent, and being transported, vary greatly between a random Tuesday 15:00 and the weeks before holidays.

In such a scenario, with your own infrastructure, you need to overprovision, by a lot, to be able to handle the heaviest load possible, and then some margin on top. And that capacity is wasted what, 90% of the year?

Meanwhile if you subcontract that part on AWS, it's their problem, and they can afford to handle it, and you only pay for what you actually use when you use it.

Re: FedEx to close data centers, retire mainframes

#112

Post by lotsofpulp »

oblio wrote: post #83
sokoloff wrote: post #8

Earlier quoted context omitted.

What’s to gain other than $400M in savings every year indeed? If it drops all the way to the bottom line, that would boost their 2022 profits by 35% and 2021 profits by about 45%. Seems like a decision you have to consider, even with possible failure modes.

https://en.wikipedia.org/wiki/FedEx Wikipedia says their net profit for 2021 was $75 billion, so your math seems off.

Wikipedia is wrong, see page 43:

https://www.sec.gov/Archives/edgar/data/1048911/000156459021...

I am not even sure where the $75.231B erroneous net income figure comes from, it is nowhere in the 2021 report:

https://investors.fedex.com/home/default.aspx

Re: FedEx to close data centers, retire mainframes

#113

Post by lallysingh »

TheRealDunkirk wrote: post #98
goindeep wrote: post #65

Earlier quoted context omitted.

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…

I'm 53, and I've worked for 3 Fortune 250's. Can confirm. I've seen this happen over and over again. Senior management makes some broad pronouncements, and the mid-level lieutenants have meetings with consultants, and then implement new, expensive projects that "will surely fix 'it' this time." Five to ten years later, after the dust settles, and we figure out that we've strapped YET ANOTHER LAYER of technical debt o…

In SOFTWAR Ellison called it a sort of fashion cycle.

Re: FedEx to close data centers, retire mainframes

#114

Post by thedougd »

From an executive viewpoint, this would be a reasonable forcing function to overcome long, deep rooted stasis in your IT department.

Let's assume for a moment that modernization is good. It probably is wrt mainframes. For every team that refused to modernize, you can now drive them to the 2024 date, absolutely no exceptions.

Re: FedEx to close data centers, retire mainframes

#115

Post by sofixa »

pclmulqdq wrote: post #49
baud147258 wrote: post #12

Are they really going to save 400 m$, or was it the figure "promised" by the shop that will handle the migration?

They were probably promised a very low price for their first few years, before their cloud costs get re-negotiated. Once they are locked in, the cloud cartel can jack up their price to make sure they get as much money as possible. But also, mainframes are extremely expensive, so they can probably do better on commodity hardware. The cloud is a way to rent a lot of commodity hardware. The big-brained move that they ar…

> They were probably promised a very low price for their first few years, before their cloud costs get re-negotiated. Once they are locked in, the cloud cartel can jack up their price to make sure they get as much money as possible

People often say that, but that literally has happened once, with GCP, and has no relation to how AWS and Azure do things. Please go and find an example in the 10+ years that AWS have been a big serious contender for the world's IT workloads of them jacking up prices.

Re: FedEx to close data centers, retire mainframes

#116

Post by kragen »

JumpCrisscross wrote: post #101
kragen wrote: 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…

> companies that abdicate their informatics operations like this will give their profits to their data-center operators Is the expectation data centre operators will see margin expansion? (Genuine question.) I had thought data centres were increasingly becoming commoditised.

Yes, a cloud vendor is a company that has literally all of your company's data and a plethora of cloud services that are subtly incompatible with their competitor's offerings, and their machines make the millisecond-by-millisecond decisions about what your company does. They are in a position to calculate precisely how much you can afford to pay them without going bankrupt, and charge you $1 less. Oracle has aspired to this business model for decades, but as you can see from the fact that many of the other Fortune 500 companies still have profits, hasn't been entirely successful.

Re: FedEx to close data centers, retire mainframes

#118

Post by theideaofcoffee »

benj111 wrote: post #75
tgsovlerkhgsel wrote: post #66

Earlier quoted context omitted.

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

> Do you buy by the watt though?

Usually in larger DC deployments, yes, you are quoted, metered, and billed by total power. The amount of space is (usually) an afterthought. There is more space than you can fill and remain under the power commit, which also correlates to total cooling load too.

Re: FedEx to close data centers, retire mainframes

#119

Post by lallysingh »

kragen wrote: 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…

On mainframes, they were already giving up profits and flexibility to IBM and that small ecosystem of related vendors.

Re: FedEx to close data centers, retire mainframes

#120

Post by bythckr »

I never understood the logic behind companies abandoning their own data centers and moving their gold (Data is the new gold) into somebody else hand. I see that many here are also thinking in the same line.

But when I spoke to a CTO of a F500 company. This was the take he had. He feels one of the major driving force is to reduce the carbon foot print of the company. His company is designing the system to have the crucial data on their own infrastructure but keep they other data & do the processing of cloud service. Instead of relying on 1 provider, they are using multiple. Also supporting some small local cloud providers.

This seems very relevant for a logistics company with a huge of fleet of air craft. Especially considering the upcoming carbon tax.

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