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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

#41

Post by barryrandall »

CoolCold wrote: post #2

Nice writing! My gut feeling says part of the problem is C-levels, like CTOs, in recent time, coming solely from programming experience and its just mentally hard for them to even consider having physical hardware (yet on colocation!) and managing such systems. It's just out of equation. On the article itself, billions scale payments are astonishing. And how much paying for traffic would add here too.

It's investors and the one-size-fits-all metrics many rely on. They want a company's financial statements to look like the financial statements from other financial instruments (companies) they're familiar with. If your industry has 30% EBITDA, your company needs to have ~30% EBITDA. If your industry is 100% cloud, your company is expected to be ~100% cloud. If your numbers deviate from expectations, they'll demand an explanation. If that explanation isn't your company's secret to success, then it's probably not going to be accepted.

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

#42

Post by electric_mayhem »

throwaway11460 wrote: post #30
Nullabillity wrote: post #26

Earlier quoted context omitted.

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.

I’ve seen ICs lose promotions they were on course for and get wrecked on their bonuses for losing track of a single $50k/mo cluster in AWS and leaving it running though unused. At a FAANG company.

So, ICs who sweat that kind of waste are right to do so. If management sees that someone thinks 50k/mo is no big deal to squander, bet your ass there’s a good chance they’ll take at least a month’s worth out of that person’s annual bonus since that kind of money matters so little to them.

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

#43

Post by throwaway11460 »

electric_mayhem wrote: post #42
throwaway11460 wrote: post #30

Earlier quoted context omitted.

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.

I’ve seen ICs lose promotions they were on course for and get wrecked on their bonuses for losing track of a single $50k/mo cluster in AWS and leaving it running though unused. At a FAANG company. So, ICs who sweat that kind of waste are right to do so. If management sees that someone thinks 50k/mo is no big deal to squander, bet your ass there’s a good chance they’ll take at least a month’s worth out of that person’…

Sure, that money shouldn't be wasted - but thinking it's a significant part of the budget is misguided.

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

#44

Post by mannyv »

mirochnik wrote: post #10
mannyv wrote: post #7

I think these articles are great. It's about understanding what you do and what infra is appropriate. I have to wonder how that would look with a negotiated AWS discount. But they might get beaten to death by incoming bandwidth costs anyway.

Netflix is a flagship example of AWS usage. https://aws.amazon.com/solutions/case-studies/innovators/net... We don't know what are Netflix discounts. Maybe Netflix uses AWS just for free to make others pay. Maybe AWS even pay to Netflix to continue attracting the other guys. On the other hand, just read this disclosure in the Netflix 2023 annual financial report: "We have architected our software and computer systems…

What we've seen with AWS (and we only discounted like 2 services) is that if you commit to a monthly spend amount on a service you can get substantial discounts on that service.

There are EC2 plans as well, which I assume means that you can get discounts off the reserved instance pricing - but you'd have to ask your AWS rep about that.

If you spend > 4 figures on an AWS service you should ask for their discount plan. Nobody wants to say what they get discounted on, because they might lose them (and the contracts are confidential). So you have to ask your rep.

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

#45

Post by electric_mayhem »

zaphirplane wrote: post #29
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…

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

You’d lose that bet.

Source: I was there

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

#46

Post by nojvek »

SkyPuncher wrote: post #39
CoolCold wrote: post #2

Nice writing! My gut feeling says part of the problem is C-levels, like CTOs, in recent time, coming solely from programming experience and its just mentally hard for them to even consider having physical hardware (yet on colocation!) and managing such systems. It's just out of equation. On the article itself, billions scale payments are astonishing. And how much paying for traffic would add here too.

In my eyes, physical hardware is something non-growth companies do to improve margins. When you’re a growth stage company, the flexibility and leanness that comes from the cloud is important. Once your core product and computing demands stabilize, it’s a good time to figure out what makes sense to move to cheaper compute.

Exactly. Dropbox was cloud and then later moved to on-prem to save on storage costs.

Anyone running >1000 servers with >80% utilization should consider going partially colocated.

Comma.ai and Tesla come to mind who run their own training clusters.

If you are serious about compute and cost of compute and storage is ~100s of engineers, then moving off cloud is a wise strategy.

Cloud providers have huge margins. One can run a very profitable business if they get a pie of that margin.

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

#47

Post by RamblingCTO »

mistrial9 wrote: post #35
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…

this appears to be survivor bias from two decades of fast money and those that handled it

Not really, no.
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