Don't rent the cloud, own instead • Hacker News Board

Re: Don't rent the cloud, own instead

#321

Post by sanderjd » Thu, Feb 05, 2026, 4:51 PM UTC

adamcharnock wrote: post #74

This is an industry we're[0] in. Owning is at one end of the spectrum, with cloud at the other, and a broadly couple of options in-between: 1 - Cloud – This is minimising cap-ex, hiring, and risk, while largely maximising operational costs (its expensive) and cost variability (usage based). 2 - Managed Private Cloud - What we do. Still minimal-to-no cap-ex, hiring, risk, and medium-sized operational cost (around 50%…

This space of #2 like Lithus is not something I'm very familiar with, so thank you for the comment that piqued my interest!

If you're willing to share, I'm curious who else you would describe as being in this space.

My last decade and a half or so of experience has all been in cloud services, and prior to that it was #3 or #4. What was striking to me when I went to the Lithus website was that I couldn't figure out any details without hitting a "Schedule a Call" button. This makes it difficult for me to map my experiences in using cloud services onto what Lithus offers. Can I use terraform? How does the kubernetes offering work? How does the ML/AI data pipelines work? To me, it would be nice if I could try it out in a very limited way as self-service, or at least read some technical documentation. Without that, I'm left wondering how it works. I'm sure this is a conscious decision to not do this, and for good reasons, but I thought I'd share my impressions!

Re: Don't rent the cloud, own instead

#322

Post by Lucasoato » Thu, Feb 05, 2026, 4:53 PM UTC

iso1631 wrote: post #140

Lucasoato wrote: post #95

Earlier quoted context omitted.

Hetzner is definitely an interesting option. I’m a bit scared of managing the services on my own (like Postgres, Site2Site VPN, …) but the price difference makes it so appealing. From our financial models, Hetzner can win over AWS when you spend over 10~15K per month on infrastructure and you’re hiring really well. It’s still a risk, but a risk that definitely can be worthy.

> I’m a bit scared of managing the services on my own (like Postgres, Site2Site VPN, …) Out of interest, how old are you? This was quite normal expectation of a technical department even 15 years ago.

Ahah I'm 31, but deciding if it makes sense to manage your own db doesn't depend on the age of the CTO.

See, turning up a VM, installing and running Postgres is easy.

The hard part is keeping it updated, keeping the OS updated, automate backups, deploying replicas, encrypting the volumes and the backups, demonstrating to a third party auditor all of the above... and mind that there might be many other things I honestly ignore!

I'm not saying I won't go that path, it might be a good idea after a certain scale, but in the first and second year of a startup your mind should 100% be on "How can I make my customer happy" rather than "We failed again the audit, we won't have the SOC 2 Type I certification in time to sign that new customer".

If deciding between Hetzner and AWS was so easy, one of them might not be pricing its services correctly.

Re: Don't rent the cloud, own instead

#323

Post by geocar » Thu, Feb 05, 2026, 4:54 PM UTC

phiresky wrote: post #127

geocar wrote: post #123

Earlier quoted context omitted.

Who are you thinking of? Netflix might be spending as much as $120m (but probably a little less), and I thought they were probably Amazon's biggest customer. Does someone (single-buyer) spend more than that with AWS? Hertzner's revenue is somewhere around $400m, so probably a little scary taking on an additional 30% revenue from a single customer, and Netflix's shareholders would probably be worried about risk relyin…

A $120M spend on AWS is equivalent to around a $12M spend on Hetzner Dedicated (likely even less, the factor is 10-20x in my experience), so that would be 3% of their revenue from a single customer.

> A $120M spend on AWS is equivalent to around a $12M spend on Hetzner Dedicated (likely even less, the factor is 10-20x in my experience), so that would be 3% of their revenue from a single customer.

I'm not convinced.

I assume someone at Netflix has thought about this, because if that were true and as simple as you say, Netflix would simply just buy Hetzner.

I think there lots of reasons you could have this experience, and it still wouldn't be Netflix's experience.

For one, big applications tend to get discounts. A decade ago when I (the company I was working for) was paying Amazon a mere $0,2M a month and getting much better prices from my account manager than were posted on the website.

There are other reasons (mostly from my own experiences pricing/costing big applications, but also due to some exotic/unusual Amazon features I'm sure Netflix depends on) but this is probably big enough: Volume gets discounts, and at Netflix-size I would expect spectacular discounts.

I do not think we can estimate the factor better than 1.5-2x without a really good example/case-study of a company someplace in-between: How big are the companies you're thinking about? If they're not spending at least $5m a month I doubt the figures would be indicative of the kind of savings Netflix could expect.

Re: Don't rent the cloud, own instead

#324

Post by coffeebeqn » Thu, Feb 05, 2026, 4:55 PM UTC

monster_truck wrote: post #254

Don't even have to go this far. Colocating in a couple regions will give you most of the logistical thrills at a fraction of the cost!

Heavy ML workloads make this more worthwhile since you get to design it to squeeze value out of every facet. For a basic web server and database it’s definitely overkill and something like a colocation makes much more sense

Re: Don't rent the cloud, own instead

#325

Post by vidarh » Thu, Feb 05, 2026, 4:55 PM UTC

doublerabbit wrote: post #226

vidarh wrote: post #166

Earlier quoted context omitted.

> Budget hosts such as Hetzner/OVH have been known to suddenly pull the plug for no reason. The same would apply for any number of hosts. Hetzner/OVH are cheap, but as your own numbers show the location price gap is more than sufficient to cover the costs of servers. In fact you can colocate with Hetzner too, and you'd get a similar price gap - the lower cost of real-estate is a large part of the reason why they can…

Thanks. I hadn't seen it as such and you're right. I guess it comes down to personal preference. Where I feel that data has become a commodity in that I can sell your username and email for a few pence, I would rather prefer to have my own hardware in my own possession and that any request of it has to go to me, nor some server provider.

That's a totally valid reason. I also have infrastructure I operate because of personal comfort rather than because it's financially optimal.

Re: Don't rent the cloud, own instead

#326

Post by pizzafeelsright » Thu, Feb 05, 2026, 4:58 PM UTC

kevinkatzke wrote: post #276

Feels like I’ve lived through a full infrastructure fashion cycle already. I started my career when cloud was the obvious answer and on-prem was “legacy.” Now on-prem is cool again. Makes me wonder whether we’re already setting up the next cycle 10 years from now, when everyone rediscovers why cloud was attractive in the first place and starts saying “on-prem is a bad idea” again.

Mainframe -> Desktop -> Server Room -> Data Center -> Cloud (rented data center) -> Space (Skynet)

Re: Don't rent the cloud, own instead

#327

Post by tracker1 » Thu, Feb 05, 2026, 4:59 PM UTC

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…

On the software side... depending on your business model, you can factor in a lot of the cost structures into your structure. Especially for say B2B arrangements.

Cloud integrations, for example, allow you to simply use a different database instance altogether per customer, while you can share services that utilize a given db connection. But actually setting up and managing that type of database infrastructure yourself may be much more resource intensive from a head count perspective.

I mention this, because having completely separate databases is an abstraction that cloud operations have already solved... while you can choose other options, such as more complex data models to otherwise isolate or share resources how does this complexity affect your services down-stream and the overall data complexities across one or all clients.

Harder still, if your data/service is centered around b2b clients of yours that have direct consumer interactions... then what if the industry is health or finance where there are even more legal concerns. Figuring a minimal (off the top) cost of each client of yours and scaling to the number of users under them isn't too hard to consider if you're using a mix of cloud services in concert with your own systems/services.

So yeah.. there's definitely considerations in either direction.

Re: Don't rent the cloud, own instead

#328

Post by meatmanek » Thu, Feb 05, 2026, 5:00 PM UTC

maccard wrote: post #64

wobfan wrote: post #61

Earlier quoted context omitted.

To be fair, I think people are vastly over estimating the work they would have and the power they would need. Yes, if you have to massively scale up, then it'll take some work, but most of it is one-time work. You do it, and when it runs, you only have a fraction of work over the next months to maintain it. And with fraction, I mean below 5%. And keep in mind that >99% of startups who think of "yeah we need this and…

We have two on site servers that we use. For various reasons (power cuts, internet outages, cleaners unplugging them) I’d say we have to intervene with them physically about once a month. It’s a total pain in the ass, especially when you don’t have _an_ it person sitting in the office to mind it. I’m in the Uk and our office is in Spain… But it is significantly cheaper and faster

You might want to look into colocating that server at a datacenter nearby. You can get a few U of rack space and the risk of power outages, internet outages, or cleaners unplugging the servers should go way down.

Re: Don't rent the cloud, own instead

#329

Post by sgarland » Thu, Feb 05, 2026, 5:02 PM UTC

JKCalhoun wrote: post #248

Naive comment from a hobbyist with nothing close to $5M: I'm curious about the degree to which you build a "home lab" equivalent. I mean if "scaling" turned out to be just adding another Raspberry Pi to the rack (where is Mr. Geerling when you need him?) I could grow my mini-cloud month by month as spending money allowed. (And it would be fun too.)

The degree is whatever you want to deal with. I had a rack at my last house (need to redesign the space for it at new house) with 3x Dell R620s in a Proxmox cluster, running K8s, serving Ceph from NVMe drives over Infiniband (for the mesh traffic), and 2x Supermicros running independent ZFS pools.

It was fun to build - especially Infiniband - but my next iteration is going to be a single beefy server, maybe with storage attached externally. What I had had outstanding uptime, but ultimately it was massively overkill, noisy, hot, and sucked power down.

Re: Don't rent the cloud, own instead

#330

Post by tracker1 » Thu, Feb 05, 2026, 5:02 PM UTC

sgarland wrote: post #317

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…

> But until then it's a long term cost optimization with really high upfront capital expenditure and risk. The upfront capex does not need to be that high, unless you're running your own AI models. Other than leasing new ones, as a sibling comment stated, you can buy used. You can get a solid Dell 2U with a full service contract (3 years) for ~$5-10K depending on CPU / memory / storage configuration. Or if you don't…

And if each of your clients is in the Healthcare industry and dealing with end-user medical data? Or financial data? Are you prepared for appropriate data isolation/sharding and controls? Do you have a strategy for scaling database operations per client or across all clients?

It really depends on the business model as to how well you might support your own infrastructure vs. relying on a new backend instance per client in a cloud infrastructure that has already solved many of the issues at play.