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How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

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Re: How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

#21

Post by alephnerd »

CoolCold wrote: post #20
RamblingCTO wrote: post #17

Earlier quoted context omitted.

Running your own data center is just a PITA no one wants to do. Non-C-levels just love to ignore the costs you have when doing such a thing by just comparing hardware costs to the cloud costs. There's always the liability aspect, managing less people, externalizing some complexity to another company etc. etc. All worth a lot of money, at least for me personally. I wanna focus on software, not also having to manage ha…

> I'd say that if you really want to have hardware on your own, you get the right people to do the job for you. CTOs are not managing that on the floor. So I'm not sure it's the real reason. Not sure I got this point right - if you need to create you own product you will need to hire programmers as well and get right people. Same for PMs, Security, Infra guys as I see it.

> if you need to create you own product you will need to hire programmers as well and get right people

SWEs working on a product are part of a different budget (R&D) from IT (Finance & IT).

As a tech company, you can justify high R&D (they build the product) and Sales&Marketing (they sell the product) spend, but you cannot justify Finance & IT spend.

This depends company to company ofc, but for plenty of firms, it's fine to eat the Public Cloud cost because DevOps can be treated as part of the R&D bucket, and there are common metrics that all companies need to follow (some due to experience, others due to inertia).

Re: How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

#22

Post by krade »

I don't doubt that physical hardware would be cheaper than AWS at their scale, but their graph seems off: They are showing no difference between on demand and reserved pricing, with reserved pricing often even being more expensive. Are they actually taking the full 3-year up-front cost and comparing it to monthly on-demand pricing?

Re: How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

#23

Post by CoolCold »

alephnerd wrote: post #21
CoolCold wrote: post #20

Earlier quoted context omitted.

> I'd say that if you really want to have hardware on your own, you get the right people to do the job for you. CTOs are not managing that on the floor. So I'm not sure it's the real reason. Not sure I got this point right - if you need to create you own product you will need to hire programmers as well and get right people. Same for PMs, Security, Infra guys as I see it.

> if you need to create you own product you will need to hire programmers as well and get right people SWEs working on a product are part of a different budget (R&D) from IT (Finance & IT). As a tech company, you can justify high R&D (they build the product) and Sales&Marketing (they sell the product) spend, but you cannot justify Finance & IT spend. This depends company to company ofc, but for plenty of firms, it's…

Thank you, interesting.

Then "infra" would be under "IT" in such kind of setups?

From my experience it was bit different - say Infra, Dev, Security departments having their own Head Of Dev/Infra/Sec reporting to the CTO and having their budgeting aligned with CTO. CorporateIT being a bit different thing. Procurement may be shared among all of them of course.

Not saying that's the only possible setup of org structure - just what I've used to more.

Re: How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

#24

Post by mirochnik »

krade wrote: post #22

I don't doubt that physical hardware would be cheaper than AWS at their scale, but their graph seems off: They are showing no difference between on demand and reserved pricing, with reserved pricing often even being more expensive. Are they actually taking the full 3-year up-front cost and comparing it to monthly on-demand pricing?

> They are showing no difference between on demand and reserved pricing, with reserved pricing often even being more expensive.

That's exactly what is happening when you look at things without depreciation. You pay 3y all upfront. And it's a lot of money: a high step on the graph. On demand will grow steadily and in three years, it will surely be higher than 3y reserved instance. But we are not comparing one instance. We add more ever more powerful servers as they are added in any infrastructure. And we pay upfront. On demand price can't catch up to those all upfront costs on our period of time.

To see it clearly, we fix the infra on the 4th graph. And then on-demand becomes much more expensive. Also, you may look at the last paragraph in the Appendix to see why 3y all upfront is not horizontal between the steps.

> Are they actually taking the full 3-year up-front cost and comparing it to monthly on-demand pricing?

Yep.

Re: How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

#25

Post by alephnerd »

CoolCold wrote: post #23
alephnerd wrote: post #21

Earlier quoted context omitted.

> if you need to create you own product you will need to hire programmers as well and get right people SWEs working on a product are part of a different budget (R&D) from IT (Finance & IT). As a tech company, you can justify high R&D (they build the product) and Sales&Marketing (they sell the product) spend, but you cannot justify Finance & IT spend. This depends company to company ofc, but for plenty of firms, it's…

Thank you, interesting. Then "infra" would be under "IT" in such kind of setups? From my experience it was bit different - say Infra, Dev, Security departments having their own Head Of Dev/Infra/Sec reporting to the CTO and having their budgeting aligned with CTO. CorporateIT being a bit different thing. Procurement may be shared among all of them of course. Not saying that's the only possible setup of org structure…

> Then "infra" would be under "IT" in such kind of setups?

Depends what you mean by "infra".

The team that would manage your DC (either self managed or CoLo) would generally be under the CFO or COO (who will generally report to CFO), and as such that team would fall into the Finance procurement bucket.

Even if R&D has budget for multiple racks in your DC, it will still cost money on the Finance&IT side of the house to staff people to maintain it and manage it.

This model is very clunky, because procurement takes time, and this lack of nimbleness can drastically affect delivery roadmaps.

CFOs also don't like this model as much, because their job is to manage cash flow, keep books and accounts ready for audits, build financial projections, etc and time consuming work like managing IT procurement (while critical) is a major slog.

The model you mentioned is more common now (Platform/Infra team acting as an interface w/ Eng), but even they would offload DC and CoLo management to the CorpIT team.

Re: How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

#26

Post by Nullabillity »

CoolCold wrote: post #9
electric_mayhem wrote: post #6

Earlier quoted context omitted.

I’ve been doing infrastructure for 27 years. Around a dozen years ago, my business was designing building and supporting physical infrastructure for startups. One company was humming along nicely on $4000 of used hardware and a $2000 a month cage in a Colo facility. Their business had ramped up and got some funding, so we got them another 60k worth of hardware in nother facility. They onboarded still more customers t…

> But their new VC-installed CTO was like… No! Largely the point I'm trying to put here > Their first month’s bill was $50,000. And it only went up from there. Well, I've read it's not uncommon to have salaries of 200-500k USD/year per programmer, on that scale may be it doesn't matter is it 50k spending on infra or 100k . For others such extra spending is _something_ though.

You're mixing yearly salary figures and monthly infra bills.

Re: How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

#27

Post by zaphirplane »

alephnerd wrote: post #25
CoolCold wrote: post #23

Earlier quoted context omitted.

Thank you, interesting. Then "infra" would be under "IT" in such kind of setups? From my experience it was bit different - say Infra, Dev, Security departments having their own Head Of Dev/Infra/Sec reporting to the CTO and having their budgeting aligned with CTO. CorporateIT being a bit different thing. Procurement may be shared among all of them of course. Not saying that's the only possible setup of org structure…

> Then "infra" would be under "IT" in such kind of setups? Depends what you mean by "infra". The team that would manage your DC (either self managed or CoLo) would generally be under the CFO or COO (who will generally report to CFO), and as such that team would fall into the Finance procurement bucket. Even if R&D has budget for multiple racks in your DC, it will still cost money on the Finance&IT side of the house t…

It’s an own goal, why not have infrastructure as a sibling team to the dev team. This is a problem only because I make it a problem, situation

Re: How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

#28

Post by mirochnik »

alephnerd wrote: post #25
CoolCold wrote: post #23

Earlier quoted context omitted.

Thank you, interesting. Then "infra" would be under "IT" in such kind of setups? From my experience it was bit different - say Infra, Dev, Security departments having their own Head Of Dev/Infra/Sec reporting to the CTO and having their budgeting aligned with CTO. CorporateIT being a bit different thing. Procurement may be shared among all of them of course. Not saying that's the only possible setup of org structure…

> Then "infra" would be under "IT" in such kind of setups? Depends what you mean by "infra". The team that would manage your DC (either self managed or CoLo) would generally be under the CFO or COO (who will generally report to CFO), and as such that team would fall into the Finance procurement bucket. Even if R&D has budget for multiple racks in your DC, it will still cost money on the Finance&IT side of the house t…

The structure of the company depends on the needs.

When you have a tiny Corp IT, almost invisible in a company's annual budget, and nobody in the company wants to care about it (a lot of pain but zero rewards) -> it goes to CFO. You have Corp IT as a major cost center which is bigger than all the other spending altogether (mature IT companies) then you want someone knowledgeable and trustable to run it, usually CIO.

Sometimes, Corp IT as internal infrastructure supporting employees, development, backoffice is under the same person running production for the clients. Then standards of the internal IT and external services are the same (and very hard for internal services to achieve).

In other cases, production and corp IT are different departments with not so funny unresolvable collisions, like buying incompatible hardware for testing environment (internal services) and production.

Re: How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

#29

Post by zaphirplane »

electric_mayhem wrote: post #6
CoolCold wrote: post #4

Earlier quoted context omitted.

> Arguing with programmers is oftentimes pointless these days. Pragmatism is out of the equation. I partially agree with you, but my point is - things are even worse at times - arguing happens when there is more than single person involved - CTO may just not even considering/thinking on using hardware, it's a very strong habit to relay on cloudy stuff, atrophy of some sort. > Second, connecting all the piping gives a…

I’ve been doing infrastructure for 27 years. Around a dozen years ago, my business was designing building and supporting physical infrastructure for startups. One company was humming along nicely on $4000 of used hardware and a $2000 a month cage in a Colo facility. Their business had ramped up and got some funding, so we got them another 60k worth of hardware in nother facility. They onboarded still more customers t…

I’ll bet this isn’t apples to apples comparison and the bill was for a lot more resources. Ec2 or Ecs Clusters per developer, leave experimental shiny cloud service running … etc

Re: How Ahrefs Gets a Billion Dollar-Worth Infrastructure with a 90% Discount

#30

Post by throwaway11460 »

Nullabillity wrote: post #26
CoolCold wrote: post #9

Earlier quoted context omitted.

> But their new VC-installed CTO was like… No! Largely the point I'm trying to put here > Their first month’s bill was $50,000. And it only went up from there. Well, I've read it's not uncommon to have salaries of 200-500k USD/year per programmer, on that scale may be it doesn't matter is it 50k spending on infra or 100k . For others such extra spending is _something_ though.

You're mixing yearly salary figures and monthly infra bills.

50k*12=600k, equivalent to 1-3 SWE employees; practically not even a single small team. It's nothing.

Individual contributors see these numbers and act like it's some huge amount of money but in the grander scheme of things when you're approving budgets for multiple teams of senior SWEs and other roles, it doesn't even register.

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