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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

#301

Post by earthboundkid »

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…

> Because what's their BATNA? Migrating from Azure to AWS when Microsoft doesn't want to let them?

Uh yes, exactly?

Clouds give small customers the first hit free as a loss leader. With very large customers, clouds have to be price competitive because if you're at a large scale, it is totally worth spending millions of dollars for a 5 year plan to change clouds. The people who get screwed are the medium to large customers for whom the cost of changing clouds is too high to recoup in a reasonable timeframe. The moral of the story is be very small or very large, but avoid being medium sized.

Re: FedEx to close data centers, retire mainframes

#302

Post by Spivak »

jchook wrote: post #230

Interesting story as I recall Bank of America saving 5x that amount per year by doing the exact opposite move. https://www.businessinsider.com/bank-of-americas-350-million...

Doesn’t matter what you actually do, you get the benefits of shaking off all the barnacles doing any rewrite or rearchitectire.

Re: FedEx to close data centers, retire mainframes

#303

Post by kjs3 »

oblio wrote: post #86
Ekaros wrote: post #30

Where are they using all of these data centers and mainframes? That is they are spending at least 400 million to do what exactly? To me that seems like rather high figure in any case for their sites and logistics...

With (most likely) 0 knowledge about the internal details of their business, but with the confidence of the average programmer: "they spend too much". I imagine Twitter could also be built over a weekend, right? :-)

The more ignorant you are about the reality on the ground, apparently the easier it is for some people to tell others "obviously, you're doing it wrong".

Re: FedEx to close data centers, retire mainframes

#304

Post by themerone »

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…

My company built a data center that was supposed to lead us into the future, and it started running out of capacity within a few years.

The cloud is the only reasonable way to keep up with exploding compute demands.

Re: FedEx to close data centers, retire mainframes

#305

Post by bpodgursky »

earthboundkid wrote: post #301
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…

> Because what's their BATNA? Migrating from Azure to AWS when Microsoft doesn't want to let them? Uh yes, exactly? Clouds give small customers the first hit free as a loss leader. With very large customers, clouds have to be price competitive because if you're at a large scale, it is totally worth spending millions of dollars for a 5 year plan to change clouds. The people who get screwed are the medium to large cust…

And if all you use is object storage, k8s, and some kind of SQL data lake, migrating between clouds is... actually not that terrible?

It's a huge project but there's not a lot of actual redesigning.

Re: FedEx to close data centers, retire mainframes

#306

Post by misterprime »

citizenpaul wrote: post #292
alexvoda wrote: post #283

Earlier quoted context omitted.

Difference being that FedEx pays 0 $/km for the roads, but the $/GB and $/GHz will be at the mercy of their cloud provider.

> pays 0 $/km for the roads, That is really not true at least in the USA. There are all kinds of taxes and fees for using the roads with large trucks. Have you ever seen the weigh stations on the sides of the highway in the US? Those are there to fine the trucks for what they are carrying if it is beyond what is allowed among other things. You said km though so you probably are not in the US.

Every state charges their own fee per mile to commercial trucks. Filing taxes as a long distance trucking company that operates in multiple states is pretty annoying.

There's also tax built in to every gallon of fuel.

There are also flat annual registration fees you have to pay as well.

Re: FedEx to close data centers, retire mainframes

#307

Post by nightpool »

citizenpaul wrote: post #292
alexvoda wrote: post #283

Earlier quoted context omitted.

Difference being that FedEx pays 0 $/km for the roads, but the $/GB and $/GHz will be at the mercy of their cloud provider.

> pays 0 $/km for the roads, That is really not true at least in the USA. There are all kinds of taxes and fees for using the roads with large trucks. Have you ever seen the weigh stations on the sides of the highway in the US? Those are there to fine the trucks for what they are carrying if it is beyond what is allowed among other things. You said km though so you probably are not in the US.

It's not true in the EU either, plenty of countries have truck and trailer specific tolls. The average truck on the German autobahn, for example, pays €0.15 per kilometre.

Re: FedEx to close data centers, retire mainframes

#308

Post by VBprogrammer »

prirun wrote: post #196
VBprogrammer wrote: post #68

Earlier quoted context omitted.

I think you are absolutely right, however when they do reverse the decision they will publish a great article about how bringing their datacentres in-house is going to save them $800m a year and a bunch of execs will grant themselves a bigger bonus for saving the company so much money. It's a win-win!

It's quite possible that at today's prices, they will save $400M/yr, and in the future, as cloud vendors raise prices, bringing it in-house will save them $800M/yr.

Not only that, it's possible that cloud vendors don't charge an extra penny but that the their software grows to consume the virtually limitless computing resources available to them costing them significantly more than expected.

It wouldn't take the most creative exec in the world to make a plausible looking case for changing in either direction even based on the same numbers. A bit of wishful thinking about which costs are included or excluded is probably more than enough.

Re: FedEx to close data centers, retire mainframes

#309

Post by landemva »

vlovich123 wrote: post #205
IHLayman wrote: post #150

Earlier quoted context omitted.

ML workloads definitely cost a lot of money. Even for a preemptible VM, A100 GPUs cost $0.88/hr/GPU. That's $624 a month for a single GPU and only the 40GB model. Want a dedicated 8 GPU machine in the cloud to do training with? That'll run you around 16 grand a month. Do that for 2 years and you may as well have bought the device. Want to do 16/24/40 GPU training? Good luck getting dedicated cloud machines with netwo…

Re data, I think egress rates are going to start disappearing over the next few years. The part that’s always missing with these rent vs buy analyses on HN for some reason is that it’s totally ignoring the opex cost of operating your own hardware which is going to be non 0. Sure, it won’t be quite as expensive (no profit margin) but it’s not an order of magnitude. Additionally, most companies don’t run the HW 24/7 an…

>> I think egress rates are going to start disappearing over the next few years.

Compute costs generally drop over time. Do you have any data points to confirm egress will soon go to zero?

Re: FedEx to close data centers, retire mainframes

#310

Post by [deleted] »

menzoic wrote: post #262
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…

>Renting your information infrastructure is a great way to reduce startup costs, but down the road, that information infrastructure runs your company. Trying to outsource it is like trying to outsource upper management. This isn't a one size fits all thing. For a company like FedEx I don't see the advantage of owning their own data centers. They just don't have the scaling challenges that would require that. Data cen…

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