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Singapore software vendor says own hardware in colo costs $400M less than cloud

theregister.com

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Re: Singapore software vendor says own hardware in colo costs $400M less than cloud

#21

Post by siva7 »

tehCorner wrote: post #11

Not on the same scale but in my previous company we observed the same thing (though the other way around since we moved from self-hosted to cloud). He had a team of 4 managing the infra for an app (82 million users, 30 million DAU) and spent around 500.000€ per year on the data centers + this team's salaries + some other expenses like travels to the datacenters, some new stuff etc..., let's say around 1.000.000€ per…

Cost is only one aspect and infra should know that moving to the cloud will usually be more expensive than running on colo. I assume there were other aspects that played a role in this decision like elasticity, scalability and high-availability which are easier to go for with a cloud provider.

Re: Singapore software vendor says own hardware in colo costs $400M less than cloud

#22

Post by orangepurple »

endisneigh wrote: post #19
openplatypus wrote: post #16

Cloud was always more expensive (in the short term) than self-managed/collocated servers. How is this news? In cloud, you pay for availability, for ad-hoc instances without waiting for a month to install new servers and more. You only need to hire “software” DevOps, rather than people who neatly lay your cables, journey to DC to replace disks, etc, etc, etc. Pick a good, cheap cloud. It is a commodity product. Just b…

What is a "good, cheap cloud?"

Vultr comes to mind immediately. I used Ramnode a few years ago.

Re: Singapore software vendor says own hardware in colo costs $400M less than cloud

#23

Post by api »

mabbo wrote: post #20

My goodness is it Monday already and time for yet another of these articles? At a given scale and software maturity, it is cheaper to buy your own hardware and pay for your own team to operate it. Generally, this is when you start thinking of your hardware needs in terms of fractions of an entire data center, but in simple cases may be smaller. This almost is not ever true for software startups, who get more value fr…

I always tell people to do the spreadsheet. There is a point at which bare metal or colo becomes cheaper and that point will depend on your work load.

If it’s outbound bandwidth intensive that point will come sooner than say a storage intensive work load.

You always hear stories like this where people didn’t do that and were lazy and massively overpaid on cloud.

Re: Singapore software vendor says own hardware in colo costs $400M less than cloud

#24

Post by yonisto »

Like in every utility, at certain point of scale it make sense to cut the middle man and do it on your own. Mcdonald's, for example, own potatoes fields.

In my current working place, the cloud really saves us money. I would estimate 500k$ a year.

Re: Singapore software vendor says own hardware in colo costs $400M less than cloud

#25

Post by nprateem »

Over the weekend I created a globally distributed CDN pulling data from a globally distributed, auto healing database as a cache. It took a few hours then I tore it all down in 15 minutes, and it probably only cost a few dollars.

The cloud trades agility for cost.

Re: Singapore software vendor says own hardware in colo costs $400M less than cloud

#26

Post by andrewstuart »

No doubt people will be commenting here on how cloud makes sense because you don’t have to hire experts to run your own computers.

Folks…… it’s pure fiction that cloud does not require experts to run it.

Cloud is more expensive and slower often more complex, and risks major vendor lock-in if you use the cloud vendors APIs instead of open source solutions.

And if you need GPU computing you’d be crazy to use cloud GPUs which are much, much more expensive and much much slower than consumer grade GPUs.

And if you can summarise which parts of your system are incurring traffic costs then you’re beating the deliberately complex systems intended to nickel and dime your architecture every time a byte turns a corner.

Re: Singapore software vendor says own hardware in colo costs $400M less than cloud

#27

Post by johnbellone »

jtwaleson wrote: post #14
tehCorner wrote: post #11

Not on the same scale but in my previous company we observed the same thing (though the other way around since we moved from self-hosted to cloud). He had a team of 4 managing the infra for an app (82 million users, 30 million DAU) and spent around 500.000€ per year on the data centers + this team's salaries + some other expenses like travels to the datacenters, some new stuff etc..., let's say around 1.000.000€ per…

I was PM for a cloud hosting solution that we were originally running colocated. We moved it all to AWS for about 5x the costs after you calculated capex vs opex etc. "The Cloud" allowed our customers to set up their applications with High Availability and PITR (via RDS, building that ourselves at scale would have been problematic). It also allowed us to launch services anywhere in the world. Setting up data centers…

We are nearly two decades from the launch of EC2 and I still need to explain to people (technical and not) that the cloud isn’t cheaper once you get to a certain scale. Everyone is always amazed.

Re: Singapore software vendor says own hardware in colo costs $400M less than cloud

#28

Post by igtztorrero »

tehCorner wrote: post #11

Not on the same scale but in my previous company we observed the same thing (though the other way around since we moved from self-hosted to cloud). He had a team of 4 managing the infra for an app (82 million users, 30 million DAU) and spent around 500.000€ per year on the data centers + this team's salaries + some other expenses like travels to the datacenters, some new stuff etc..., let's say around 1.000.000€ per…

Wow what a number ! 5 times more expensive !

Re: Singapore software vendor says own hardware in colo costs $400M less than cloud

#29

Post by 300bps »

“Lift and shift” is always more expensive. That is, you will always pay more for cloud servers than you will for on-prem at a certain level of scale.

Lift and shift is not really getting the cost benefit of cloud though.

As applications get re-architected with serverless technologies like lambda, costs are optimized. The exact amount of resources will pop in and out of existence for the exact amount of time they’re needed.

Re: Singapore software vendor says own hardware in colo costs $400M less than cloud

#30

Post by siva7 »

andrewstuart wrote: post #26

No doubt people will be commenting here on how cloud makes sense because you don’t have to hire experts to run your own computers. Folks…… it’s pure fiction that cloud does not require experts to run it. Cloud is more expensive and slower often more complex, and risks major vendor lock-in if you use the cloud vendors APIs instead of open source solutions. And if you need GPU computing you’d be crazy to use cloud GPUs…

Sure, cloud is usually more expensive, so is developer time. If your team is wrangling more with the quirks of your own setup instead of the standardized workflow of a paas provider, your calculation won't work in your favour anymore.
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