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Cloud costs are in a bubble

the-investing-desk.com

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Re: Cloud costs are in a bubble

#71

Post by crmd »

jimhi wrote: post #19
crmd wrote: post #5

The most valuable information for the average HN reader, especially younger colleagues who have only been in the workforce for the last decade, is that the ~70% gross margins of the hyperscalers, and by extension the $300k+ salaries for early career software developers, has been fueled by a temporary era of low central bank interest rates and an excess of VC capital. This era is almost certainly coming to a close. We…

Always good advice to budget and prepare for the worst, but wow this is a big stretch from the article. Of the large salary companies - Amazon, Google, and Microsoft are in the cloud space. Google doesn't make most of its profits from cloud. Netflix and Facebook don't sell these services at all. Dropbox and Digital Ocean (and sort of Cloudflare) are also in the cloud space and aren't known for such salaries. It's pos…

Every square inch of the tech sector has been inflated by the past 14 years of almost free capital.

Re: Cloud costs are in a bubble

#72

Post by lifefeed »

biohax2015 wrote: post #20
crmd wrote: post #5

The most valuable information for the average HN reader, especially younger colleagues who have only been in the workforce for the last decade, is that the ~70% gross margins of the hyperscalers, and by extension the $300k+ salaries for early career software developers, has been fueled by a temporary era of low central bank interest rates and an excess of VC capital. This era is almost certainly coming to a close. We…

This is just incredibly frustrating and disheartening to read. How is one supposed to plan for a future in this career when your lifestyle can just disappear overnight?

The software industry isn't going to disappear overnight. It didn't disappear in 2001 or in 2008, despite all the concerned emails I read from my relatives.

That said it's always a good idea in general to live below your means, and to be specific, not get the biggest mortgage your lender thinks you can afford.

Re: Cloud costs are in a bubble

#73

Post by novok »

shubhamjain wrote: post #13

Be it VC money, or just general apathy, it seems cloud costs are rarely a priority. My biggest gripe is when see that justification that goes like, "developer's time is $100/hr and better spent elsewhere." Okay, I agree, doing something like self-hosting everything to reduce costs would be a terrible idea, but there's a fine balance. In 2019, Lyft spent $300M on AWS [1]. Sure, it's a big service, but are you seriousl…

When you have big contracts like that, you get significantly discounted rates. And when you need large amounts of compute like that, you do need a whole bunch of staff to manage it and make it efficient and start reproducing / maintaining similar software created by the cloud providers. Let's say AWS makes a %50 profit margin over the raw cost of the hardware than you doing it yourself in DC, and each engineer is $400k/yr. You need to keep under 100 engineers to just start beating AWS, and your not in the business of running cloud infra.

Also when you run the DCs yourself, usually it's much slower for other engineers using your DC infra than using AWS or similar. It gets complicated!

Re: Cloud costs are in a bubble

#74

Post by crmd »

throwaway894345 wrote: post #53
xadhominemx wrote: post #52

Earlier quoted context omitted.

OP probably considers it a compliment to be compared to zero hedge, so I don’t consider my comment to be aggressive

There's no charitable way to interpret "unhinged" and "ripped straight from" as anything other than aggressive. Note that I upvoted your original comment despite the hostility because I thought the substance was interesting.

Bubbles by definition don’t exit unless the majority of market players temporarily believe that the current trajectory is the new normal and not an anomaly.

Re: Cloud costs are in a bubble

#75

Post by arrosenberg »

throwaway894345 wrote: post #53
xadhominemx wrote: post #52

Earlier quoted context omitted.

OP probably considers it a compliment to be compared to zero hedge, so I don’t consider my comment to be aggressive

There's no charitable way to interpret "unhinged" and "ripped straight from" as anything other than aggressive. Note that I upvoted your original comment despite the hostility because I thought the substance was interesting.

You are replying to someone whose s/n is literally ad hominem.

Re: Cloud costs are in a bubble

#76

Post by NohatCoder »

jd_mongodb wrote: post #4
bfung wrote: post #2

Hard to confirm the article and the tweet. The author should provide the exact details and operations for someone to replicate and verify, or at least do the math. The mongodb pricing page says one can setup a M10 instance for $57/month. [ https://www.mongodb.com/pricing ] Racking up a $2500/day bill is several of magnitudes off - there’s nothing in the article to help put the workload in context. I have zero interes…

I did manage to approach his costs by running a sharded cluster with our largest configuration (M600 nodes with 640GB RAM. 4TB storage and 3.8m IOPS). That is priced quite clearly on the bottom page at 102.49 USD an hour.

Depending on exact specifications that is like $10k of hardware, so 4 days of rent pays the machine in full.

So in this service the actual cost of the hardware is a rounding error. It also needs power, cooling, a roof and some maintenance crew, but that still doesn't come close to the rental price. So what are customers actually paying for?

Re: Cloud costs are in a bubble

#77

Post by morelisp »

xadhominemx wrote: post #38
crmd wrote: post #5

The most valuable information for the average HN reader, especially younger colleagues who have only been in the workforce for the last decade, is that the ~70% gross margins of the hyperscalers, and by extension the $300k+ salaries for early career software developers, has been fueled by a temporary era of low central bank interest rates and an excess of VC capital. This era is almost certainly coming to a close. We…

Another unhinged HN comment ripped straight from ZeroHedge. Loss making venture funded startups are a small part of cloud revenues. The overwhelming majority of cloud revenue and gross profit comes from stable and profitable enterprise customers who have a 15 year plan to exit the majority of their on prem footprint, and interest rates have little bearing on these plans.

The calculus of whether the premium of someone else's ops team is "worth it" changes drastically as dev salaries stagnate / drop.

Re: Cloud costs are in a bubble

#78

Post by acchow »

crmd wrote: post #5

The most valuable information for the average HN reader, especially younger colleagues who have only been in the workforce for the last decade, is that the ~70% gross margins of the hyperscalers, and by extension the $300k+ salaries for early career software developers, has been fueled by a temporary era of low central bank interest rates and an excess of VC capital. This era is almost certainly coming to a close. We…

The money printing inflated salaries. But they also inflated the prices of the most expensive thing we spend that salary on - real estate

Re: Cloud costs are in a bubble

#79

Post by tengbretson »

slt2021 wrote: post #69
mnd999 wrote: post #67

Earlier quoted context omitted.

SQLite isn’t really comparable to Oracle or SQL Server though. It’s an embedded database. Probably you meant Postgres there too?

same with postgres's jsonb - it is not comparable to mongo at all, they dont have any feature parity

> they dont have any feature parity

They very obviously have a significant degree of feature parity.

Re: Cloud costs are in a bubble

#80

Post by jimhi »

r0m4n0 wrote: post #56
jimhi wrote: post #40

Earlier quoted context omitted.

Startups have to show growth and/or revenue. They dump most of their funding into advertising. Many are spending more than the lifetime value of their customers (if that can even be calculated at their stage at all). Interest rates go up -> VC Money goes down -> Advertising budgets go down Online advertising is "theoretically" better than other advertising. You can track exactly how it converts to sales or not. It is…

Interest rate increases are causing money to move around for sure. I’m just not convinced startups are the primary buyer of these online ads. Hell I would barely even consider them a drop in the bucket. Im sure basically every Fortune 500 and brick and mortar store have hefty online ad spends now a days. I suppose we will see soon enough

True - that's my guess anyway
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