The cost of cloud, a trillion dollar paradox (2021) • Hacker News Board

Re: The cost of cloud, a trillion dollar paradox (2021)

#31

Post by toast0 » Wed, Oct 25, 2023, 8:57 PM UTC

asah wrote: post #19

this makes no sense: can individual companies operate computing infrastructure more efficiently than cloud providers? if not, then instead of migrating just negotiate.

Probably, yes? Operating it to their specific needs is likely to be more efficient than operating to the generalized needs of cloud customers.

IMHO, the biggest wins for cloud are when you can't fill up a whole machine and when your needs vary significantly throughout the day and you can scale up and down quickly and not have to pay for unused capacity.

Re: The cost of cloud, a trillion dollar paradox (2021)

#32

Post by codemac » Wed, Oct 25, 2023, 8:58 PM UTC

bob1029 wrote: post #29

codemac wrote: post #27

It's my hardcore held belief that the cloud industry could wildly be disrupted if it was easy enough to order 5 year capacity contracts. Then AWS / GCP etc would be left with just the elastic demand, rather than the inelastic profit center. However - this would take a huge amount of upfront investment, have high risks for black swan events against 5y contracts without crypto-style escrow, and I have been unsuccessful…

5 years is a really long time on most types of B2B contracts. Especially ones with very thorough operational considerations bound to technology changing over time. Consider how much premiums would be on $TSLA put options that expire in 2028.

Somehow real estate gets away with it, and they have even more fungible contents!

Re: The cost of cloud, a trillion dollar paradox (2021)

#33

Post by Macha » Wed, Oct 25, 2023, 8:58 PM UTC

AIorNot wrote: post #8

So now the trend is away from cloud ? What about a good way to to judge the cost of the cloud - pricing has always been overly complex and arcane and full of gaps in understanding the overhead involved

Honestly the relative clarity of what cloud costs has been one of the advantages that companies want to pay a premium for, compared to the quagmire of capex, depreciation, attribution of datacenter costs, and interdepartmental chargebacks that on prem usually means.

I suspect fewer cloud migrations would occur if companies could map their onprem costs to specific products much more easily rather than going "Oh it might be a lot for this team but who knows?", which opens the room to someone to sell the pricing transparency use case to an exec.

Re: The cost of cloud, a trillion dollar paradox (2021)

#34

Post by mlsu » Wed, Oct 25, 2023, 8:59 PM UTC

It cuts the other way, too. A cost for one is revenue for another: In this case, AWS or Microsoft. Your cost of revenue is their revenue!

There will be big growth in the "make it easier to manage on prem deployments" sector. Obviously you need capable sysadmin if you are going to move workloads away from cloud but improving the tech (I'm thinking of Oxide Computer here) will make it palatable for smaller and smaller orgs to consider repatriation, as they can do so with less effort and expertise.

This makes me hopeful as well that internet infrastructure will become less centralized. It's closer to the spirit of the internet that not every bit of information you see online passes through us-east-1.

Re: The cost of cloud, a trillion dollar paradox (2021)

#35

Post by runlaszlorun » Wed, Oct 25, 2023, 9:01 PM UTC

bamazizi wrote: post #10

Interesting to see this article again since it was the trigger of starting a homelab for me. After realizing cloud services are putting a major dent in my pocket to get a lousy startup idea off the ground, I started to wonder if there's "The Cheapest" way? (I'm not cheap but I'm very frugal) Nowadays internet speed is great to do self hosting. I have a business line internet at home with ~1gb up&down! Bought couple o…

was the business line much more expensive than home rates? and were you given a static ipv4 IP?

Re: The cost of cloud, a trillion dollar paradox (2021)

#36

Post by latchkey » Wed, Oct 25, 2023, 9:05 PM UTC

codemac wrote: post #27

It's my hardcore held belief that the cloud industry could wildly be disrupted if it was easy enough to order 5 year capacity contracts. Then AWS / GCP etc would be left with just the elastic demand, rather than the inelastic profit center. However - this would take a huge amount of upfront investment, have high risks for black swan events against 5y contracts without crypto-style escrow, and I have been unsuccessful…

Lambda went from bragging about short contracts [0] to 3+ years and if you look closely, the only thing with actual pricing is 3 years, otherwise it is contact sales and waitlist.

[0] https://lambdalabs.com/blog/cutting-the-cost-of-high-perform...

[1] https://lambdalabs.com/service/gpu-cloud/reserved

Re: The cost of cloud, a trillion dollar paradox (2021)

#37

Post by bigtones » Wed, Oct 25, 2023, 9:06 PM UTC

epberry wrote: post #15

This post, along with this Simon Wardley thread, https://twitter.com/swardley/status/1088780650860158978?s=20 , attracted me to finops as an engineering problem. Consumption based pricing is really tough for a lot of orgs to handle at the $1M+ range, so much so that it requires dedicated software to line things up. I started helping maintain https://ec2instances.info in my spare time and the code base is literally fu…

I love using https://ec2instances.info as a reference - thank you for maintaining it !

Re: The cost of cloud, a trillion dollar paradox (2021)

#38

Post by nonrandomstring » Wed, Oct 25, 2023, 9:08 PM UTC

bamazizi wrote: post #10

Interesting to see this article again since it was the trigger of starting a homelab for me. After realizing cloud services are putting a major dent in my pocket to get a lousy startup idea off the ground, I started to wonder if there's "The Cheapest" way? (I'm not cheap but I'm very frugal) Nowadays internet speed is great to do self hosting. I have a business line internet at home with ~1gb up&down! Bought couple o…

After this talk [0] I had several most interesting conversations with media folks about the real cost and advantages of "cloud".

One thing that came up is development. Modern devops culture is quite a good thing, and what's lovely about "cloud" - as in the ability to quickly buy compute and storage capability - is that ideas you would have tinkered with in on-prem labs (or across private sites) for months can be imagined and prototyped in hours.

I'm a big advocate of rapid prototyping as a _huge_ business lever, because the ability to try out ideas quickly, to easily reconfigure things, is the key for time to market. You can quickly see if something is going to fly or not.

And that's where the advantage ends.

After that, it's all downhill. Asymmetry. Lock-in and portability. Trust and privacy issues. Security perimeters. Unpredictable costs....

So the way forward is to render unto Caesar only the things that are Caesar's.... in other words, take the advantages of "cloud" when it suits you, and then get the hell out of Dodge.

What is ongoing from that conversation is media companies being interested in strategic planning to build, and even share, their own distributed computing resources to pull back to once a technology is off the ground.

Someone even mentioned that it's time for a European Cloud initiative,

[0] https://www.youtube.com/watch?v=6OL2XmlgpdA

Re: The cost of cloud, a trillion dollar paradox (2021)

#39

Post by jedberg » Wed, Oct 25, 2023, 9:10 PM UTC

bamazizi wrote: post #10

Interesting to see this article again since it was the trigger of starting a homelab for me. After realizing cloud services are putting a major dent in my pocket to get a lousy startup idea off the ground, I started to wonder if there's "The Cheapest" way? (I'm not cheap but I'm very frugal) Nowadays internet speed is great to do self hosting. I have a business line internet at home with ~1gb up&down! Bought couple o…

What will you do if your startup suddenly takes off?

That's the main advantage of the cloud early on -- flexibility.

Re: The cost of cloud, a trillion dollar paradox (2021)

#40

Post by Ographer » Wed, Oct 25, 2023, 9:11 PM UTC

michaelt wrote: post #18

> A billion dollar private software company told us that their public cloud spend amounted to 81% of COR, and that “cloud spend ranging from 75 to 80% of cost of revenue was common among software companies” I find that quite hard to believe. I mean, I can see that if you were selling cloud backup services and stored customer data on S3, I can understand S3 costs being a big part of your budget. But for the vast major…

A chart on the article said that Slack spends an estimated 41% of revenue on cloud costs, calculated using their financials by this author who claims they were being conservative but I don't know how to estimate such a thing myself.