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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

#311

Post by Retric »

nightpool wrote: post #307
citizenpaul wrote: post #292

Earlier quoted context omitted.

> 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.

Which roughly covers the actual damage large trucks do per km traveled and in no way covers construction costs.

Re: FedEx to close data centers, retire mainframes

#312

Post by njarboe »

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…

Similar to the decision to own a building or rent. Moving is a real pain and can kill companies. Better get a long lease with lots of extension options because at the end of the lease your rent is going to go way up.

Re: FedEx to close data centers, retire mainframes

#313

Post by oogali »

misterprime wrote: post #306
citizenpaul wrote: post #292

Earlier quoted context omitted.

> 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.

Don’t forget the tolls for various highways, bridges, and tunnels as they’re almost always priced higher for vehicles with more than two axles.

Re: FedEx to close data centers, retire mainframes

#314

Post by IHLayman »

IMSAI8080 wrote: post #289
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…

The other thing is nVidia try and sell GPUs with similar performance at two very different prices. One price for data centres and a quite different price to kids. If you do the job yourself you can often get away with using the much cheaper gamer grade cards for AI work (unless you need a lot of VRAM), whereas such as AWS can't do that and are required by nVidia to use the considerably more expensive cards. If your w…

That is a really good point, and the 3090s have a surprising amount of VRAM on them. For many smaller models this is sufficient. However, where I work without going into a lot of specifics, because of the size of the models, the amount of VRAM is crucial, as well as the infrastructure of the PCI lanes connected to it, the speed of the local storage, and the networking between both cards on the same node as well as between nodes.

The moment the model gets to be bigger than the size of any one GPU's VRAM, the higher by orders of magnitude of difficulty in the process of training that model.

Re: FedEx to close data centers, retire mainframes

#315

Post by dehrmann »

cs702 wrote: post #36
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…

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 disagree. This isn't FedEx's core competency or a differentiator for them. They're also not at a scale where it could make sense to colocate or build their own DCs. Fiddling with low-level tech infra would just be a distraction.

Now, they might find that software is a differentiator for them, but that's different.

Re: FedEx to close data centers, retire mainframes

#316

Post by dend »

This makes a lot of sense if you think through the angle that their core value prop does not come from the network/data latency optimization. It's not Netflix and Dropbox - this is FedEx. Their core business value proposition comes from logistics and being able to react to the information quickly, but extra millisecond latency is unlikely to make or break the business.

In light of this, it's easier to outsource the network and data infrastructure to a provider that actually does it day in and day out and put the limited engineering resources to something that is more impactful.

Just reaffirms that quite a few companies do not want to run their own servers unless they absolutely have to.

Re: FedEx to close data centers, retire mainframes

#317

Post by dehrmann »

fires10 wrote: post #245
synergy20 wrote: post #180

Earlier quoted context omitted.

Some might return to on-premise data center, but most will not. It's really just like the utilities these days, 98% people will not dig their own well and install some sewage system and buy a generator, but big companies can still opt to have them on-premise installed, even though some of those are just backup systems. there is no return for the cloud for 98% of us.

You generally can not go from city water/sewage to on-prem for legal reasons. However, many are going on-prem with solar. I am going almost completely off-grid for cost and SLA requirements.

What's interesting is people seem really excited about installing rooftop solar, but I see fewer companies building collectors in places with cheap land and ample sun. That tells me part of the selling point of rooftop solar is it feels good, and the economics might not actually work.

Re: FedEx to close data centers, retire mainframes

#319

Post by [deleted] »

cs702 wrote: post #36
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…

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…

[deleted]

Re: FedEx to close data centers, retire mainframes

#320

Post by 8ytecoder »

bpodgursky wrote: post #305
earthboundkid wrote: post #301

Earlier quoted context omitted.

> 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.

Every one of these large enterprises, including the cloud providers themselves, like stability. So they sign multi-year multi-million dollar contracts that expect a minimum spending and offers a negotiated discounted price.

It’s also not just the cloud, enterprises know they get the best pricing when they commit to a vendor and the vendor also bends over backwards to accommodate these large companies. As long as there are 2-3 cloud providers big enterprises will be just fine.

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