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

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

#61

Post by radlad »

Karrot_Kream wrote: post #57
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…

I'm always curious about the power cost here. Everyone I've talked to who runs servers at home either lives in a low COL area where electricity is cheap (and electricity is dirty, but I don't really want to get into that) or just pays the power as a sort of "cost of playing around" which is completely fair (it's not like I need to use my table saw at home.) Most folks I know who run servers use a lot more power than…

I have a Plex server with 6 spinning disks and a GPU which costs me around $20/month. The most expensive part is when the GPU is running (based on my Kill-A-Watt.) I host around 15 Docker services on it.

I think even with the cost of electricity, you can easily beat cloud hosting on a per-month basis. But, factoring in the initial cost of hardware and electricity, it's probably a wash.

But then, if you're running a hypervisor, and would otherwise have a LOT of VMs in the cloud, maybe it swings back the other way?

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

#62

Post by jedberg »

flukus wrote: post #41
jedberg wrote: post #39

Earlier quoted context omitted.

What will you do if your startup suddenly takes off? That's the main advantage of the cloud early on -- flexibility.

Depends on what "taking off" means for the start up too. Taking off at a mass consumer scale might need that flexibility, taking off and even getting to market saturation in a specific B2B might be achievable on a raspberry pi level hardware. There are many more of the later.

Any business that you can run from a home server with a residential business line is not the kind of business we are talking about here. Yes, you can potentially serve a lot of customers with that setup, but your reliability story is terrible so you better have very forgiving customers.

What if your internet goes out? Even with a business line, I've had to wait five days for them to replace a fiber line that a squirrel chewed through.

What if the power goes out? I just had a five hour power outage. Even if you have a battery backup, when the neighborhood power is out for a while, the ISP equipment will die when its batteries go out.

What if your hardware dies and you aren't home to switch it out, assuming you even have spare hardware?

What if your A/C goes out and your server overheats and has to get shut down?

All of these are things you usually don't have to deal with when using the cloud or even a $5 VPS, because they design for all of these failure cases from the start.

If you're running a business from your house, it is by definition a lifestyle business, and that's not really what we are talking about here.

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

#63

Post by nologic01 »

solving a paradox sometimes requires thinking out of the box

repatriation is not the global solution, it applies to mature and large companies

the dimension to explore is co-ownership of infrastructure by multiple independent companies, both small and large

a captive entity - wholly owned by member companies - manages a vast pool of resources achieving both the economies of scale and the flexibility needed by growing companies.

you don't "rent" somebody elses linux server, you invest and own a share.

R&D for evolving the platform is something outsourced to third parties (maybe even current cloud providers)

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

#64

Post by nine_k »

sgt101 wrote: post #14
senderista wrote: post #12

Earlier quoted context omitted.

AWS is vastly more profitable than Amazon's retail business.

It is now. It wasn't in the past. It wouldn't be if they had to compete with providers that also wanted to compete.

AWS was basically built as an internal product to support the retail business, and then they realized that they can sell it.

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

#65

Post by axelthegerman »

sokoloff wrote: post #58
jdoss wrote: post #52

Back in 2007ish the CEO of Parallels/SWSoft (the company behind Virtuozzo a very popular hypervisor used back in the day) stood on the stage of the keynote of HostingCon and said that the Cloud (AWS) was going to eat the WebHosting Industry's lunch. His entire keynote was very doom and gloom. Fast forward to 2015ish it totally it did. The days of VPS and Dedicated hosting being the only options for deploying your stu…

> keep us locked into using Cloud APIs to do our jobs I love that we can use Cloud APIs to do our jobs. That's piles better than negotiating with (and waiting for) an Ops team to provision you hardware or networking that you don't have much visibility into and then relying on them to troubleshoot. I don't mind paying more for that (which you absolutely do on a per-unit of compute, network, or storage).

There is still a massive difference between PaaS and IaaS.

I don't think anyone wants to rely on a human to unload a rack from the car, walk into a data center and install it.

Doesn't mean that Lambda and hosted kubernetes should be our only alternatives.

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

#66

Post by dekhn »

tommek4077 wrote: post #26
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.

Good luck negotiating data transfer costs with AWS.

What do you mean? I did the AWS negotiation for a small but rapidly growing startup and that was one of the negotiables, there was no real problem getting discounts.

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

#67

Post by paulddraper »

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…

You should.

Best in class SaaS costs are like 10% of revenue

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

#68

Post by acdha »

p1necone wrote: post #23
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.

I think the biggest thing is that the minimum extra spend if you want in house managed infra is basically the salary of a full time sysadmin + hardware costs. You can pay for a lot of cloud resources for that much, even when the cloud resources are massively overpriced compared to what you could manage if you had more scale. The only other alternative is finding someone who's good enough at it to make that full time…

The other thing is remembering it’s not one full time sysadmin but many and also things like security staffing. One dude running some Linux boxes isn’t going to give you the kinds of audit logging, monitoring, encryption, etc. which is table stakes in the cloud world. You can hire those people, buy HSMs, etc. but then you’re talking a much bigger gap before you break even.

Then you get a step function cost increase building and operating all of the services your developers aren’t getting out of the box.

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

#69

Post by jdoss »

sokoloff wrote: post #58
jdoss wrote: post #52

Back in 2007ish the CEO of Parallels/SWSoft (the company behind Virtuozzo a very popular hypervisor used back in the day) stood on the stage of the keynote of HostingCon and said that the Cloud (AWS) was going to eat the WebHosting Industry's lunch. His entire keynote was very doom and gloom. Fast forward to 2015ish it totally it did. The days of VPS and Dedicated hosting being the only options for deploying your stu…

> keep us locked into using Cloud APIs to do our jobs I love that we can use Cloud APIs to do our jobs. That's piles better than negotiating with (and waiting for) an Ops team to provision you hardware or networking that you don't have much visibility into and then relying on them to troubleshoot. I don't mind paying more for that (which you absolutely do on a per-unit of compute, network, or storage).

Don't get me wrong, I love using them too. They are great for getting something setup quickly when you are getting started. I use some cloud services that support my single datacenter rack I have today. For my expensive workloads, I run them off three beefy bare metal servers in my rack.

I'd argue you have less visibility on what is going on at a cloud provider than you did in the past with your Ops team. Support tickets without a massive yearly spend at a cloud provider are pain and suffering. Even with over 1 million/year spend at one of my previous companies, support and visibility on underlying issues was a very poor experience.

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

#70

Post by alex_young »

Sub-linear scaling is powerful. Think about how costs scale in relation to use of a service.

If you are paying someone else for the service as a package, the costs scale linearly, or some close approximation of that. AWS gives you a small discount if you have larger volumes for some services, but these are essentially a rounding error.

If instead you launch a similar service in house, your costs are often dramatically lower per unit the more units you use. You start with a small team supporting a system with some large capacity you're not using yet because you need room to grow, and you realize large steps along the way where you can handle tens or hundreds of times the volume you see at each staffing level. Buying hardware or developing custom software gets cheaper at volume. This is sub-linear scaling.

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