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Don't rent the cloud, own instead

blog.comma.ai

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Re: Don't rent the cloud, own instead

#51

Post by rvz »

Not long ago Railway moved from GCP to their own infrastructure since it was very expensive for them. [0] Some go for a Oxide rack [1] for a full stack solution (both hardware and software) for intense GPU workloads, instead of building it themselves.

It's very expensive and only makes sense if you really need infrastructure sovereignty. It makes more sense if you're profitable in the tens of millions after raising hundreds of millions.

It also makes sense for governments (including those in the EU) which should think about this and have the compute in house and disconnected from the internet if they are serious about infrastructure sovereignty, rather than depending on US-based providers such as AWS.

[0] https://blog.railway.com/p/data-center-build-part-one

[1] https://oxide.computer/

Re: Don't rent the cloud, own instead

#52

Post by lelanthran »

jillesvangurp wrote: post #29

At scale (like comma.ai), it's probably cheaper. But until then it's a long term cost optimization with really high upfront capital expenditure and risk. Which means it doesn't make much sense for the majority of startup companies until they become late stage and their hosting cost actually becomes a big cost burden. There are in between solutions. Renting bare metal instead of renting virtual machines can be quite n…

Your calculation assumes that an FTE is needed to maintain a few beefy servers.

Once they are up and running that employee is spending at most a few hours a month on them. Maybe even a few hours every six months.

OTOH you are specifically ignoring that you'll require mostly the same time from a cloud trained person if you're all-in on AWS.

I expect the marginal cost of one employee over the other is zero.

Re: Don't rent the cloud, own instead

#53

Post by lelanthran »

danpalmer wrote: post #22

> Cloud companies generally make onboarding very easy, and offboarding very difficult. I reckon most on-prem deployments have significantly worse offboarding than the cloud providers. As a cloud provider you can win business by having something for offboarding, but internally you'd never get buy-in to spend on a backup plan if you decide to move to the cloud.

> As a cloud provider you can win business by having something for offboarding, but internally you'd never get buy-in to spend on a backup plan if you decide to move to the cloud.

Its the other way around. How do you think all businesses moved to the cloud in the first place?

Re: Don't rent the cloud, own instead

#54

Post by simianwords »

fauigerzigerk wrote: post #43
simianwords wrote: post #13

The reason companies don’t go with on premises even if cloud is way more expensive is because of the risk involved in on premises. You can see it quite clearly here that there’s so many steps to take. Now a good company would concentrate risk on their differentiating factor or the specific part they have competitive advantage in. It’s never about “is the expected cost in on premises less than cloud”, it’s about the r…

I'm starting to wonder though whether companies even have the in-house competence to compare the options and price this risk correctly. >Now a good company would concentrate risk on their differentiating factor or the specific part they have competitive advantage in. Yes, but one differentiating factor is always price and you don't want to lose all your margins to some infrastructure provider.

Software companies have higher margins so these decisions are lower stakes. Unless on premises helps the bottom line of the main product that the company provides, these decisions don't really matter in my opinion.

Think of a ~5000 employee startup. Two scenarios:

1. if they win the market, they capture something like ~60% margin

2. if that doesn't happen, they just lose, VC fund runs out and then they leave

In this dynamic, costs associated with infrastructure don't change the bottomline of profitability. The risk involved with rolling out their on infrastructure can hurt their main product's existence itself.

Re: Don't rent the cloud, own instead

#55

Post by coreylane »

g-b-r wrote: post #32
comrade1234 wrote: post #8

15-years ago or so a spreadsheet was floating around where you could enter server costs, compute power, etc and it would tell you when you would break-even by buying instead of going with AWS. I think it was leaked from Amazon because it was always three-years to break-even even as hardware changed over time.

Did the AWS part include the egress costs to extract your data from AWS, if you ever want to leave them?

AWS says they will waive all egress costs when exiting https://aws.amazon.com/blogs/aws/free-data-transfer-out-to-i...

Re: Don't rent the cloud, own instead

#56

Post by kaon_2 »

Am I the only one that is simply scared of running your own cloud? What happens if your administrator credentials get leaked? At least with Azure I can phone microsoft and initiate a recovery. Because of backups and soft deletion policies quite a lot is possible. I guess you can build in these failsafe scenarios locally too? But what if a fire happens like in South Korea? Sure most companies run more immediate risks such as going bankrupt, but at least Cloud relieves me from the stuff of nightmares.

Except now I have nightmares that the USA will enforce the patriot act and force Microsoft to hand over all their data in European data centers and then we have to migrate everything to a local cloud provider. Argh...

Re: Don't rent the cloud, own instead

#57

Post by vachina »

kaon_2 wrote: post #56

Am I the only one that is simply scared of running your own cloud? What happens if your administrator credentials get leaked? At least with Azure I can phone microsoft and initiate a recovery. Because of backups and soft deletion policies quite a lot is possible. I guess you can build in these failsafe scenarios locally too? But what if a fire happens like in South Korea? Sure most companies run more immediate risks…

Then literally own the cloud, like run the hardware on-prem yourself.

Re: Don't rent the cloud, own instead

#58

Post by pu_pe »

> Self-reliance is great, but there are other benefits to running your own compute. It inspires good engineering.

It's easy to inspire people when you have great engineers in the first place. That's a given at a place like comma.ai, but there are many companies out there where administering a datacenter is far beyond their core competencies.

I feel like skilled engineers have a hard time understanding the trade-offs from cloud companies. The same way that comma.ai employees likely don't have an in-house canteen, it can make sense to focus on what you are good at and outsource the rest.

Re: Don't rent the cloud, own instead

#59

Post by sam_lowry_ »

fauigerzigerk wrote: post #43
simianwords wrote: post #13

The reason companies don’t go with on premises even if cloud is way more expensive is because of the risk involved in on premises. You can see it quite clearly here that there’s so many steps to take. Now a good company would concentrate risk on their differentiating factor or the specific part they have competitive advantage in. It’s never about “is the expected cost in on premises less than cloud”, it’s about the r…

I'm starting to wonder though whether companies even have the in-house competence to compare the options and price this risk correctly. >Now a good company would concentrate risk on their differentiating factor or the specific part they have competitive advantage in. Yes, but one differentiating factor is always price and you don't want to lose all your margins to some infrastructure provider.

Precious real-world engineering skills also play a role.

But most importantly, the attractive power that companies doing on-premise infrastructure have towards the best talent.

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