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We reduced our server costs by moving away from AWS

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Re: We reduced our server costs by moving away from AWS

#21

Post by elcomet »

P5fRxh5kUvp2th wrote: post #2

I'm glad to see more of these types of articles, but at the same time I'm a bit flabbergasted that this isn't obvious for so many people. These cloud providers are, by definition, charging you more than it would cost you to run it yourself. What you get in return is a guarantee of expertise and an ecosystem.

> These cloud providers are by definition, charging you more than it would cost you to run it yourself

That's totally non-obvious and certainly false in most cases. Cloud providers have huge economies of scale, which certainly makes it less expensive to use cloud if you factor in all your costs related to running it yourself.

This is like saying buying furniture is more expensive than making your own furniture because they have a profit margin. Even if you don't account for your own time, it will certainly be false as you'll pay your raw materials much more.

Re: We reduced our server costs by moving away from AWS

#22

Post by moqmar »

Octoth0rpe wrote: post #10
P5fRxh5kUvp2th wrote: post #2

I'm glad to see more of these types of articles, but at the same time I'm a bit flabbergasted that this isn't obvious for so many people. These cloud providers are, by definition, charging you more than it would cost you to run it yourself. What you get in return is a guarantee of expertise and an ecosystem.

> These cloud providers are, by definition, charging you more than it would cost you to run it yourself. That is _not_ a given. They're charging you more than it costs _them_ to run it. They get: - much lower hardware prices than you - lower bandwidth prices than you - likely lower electricity costs than you

That is why VPS providers are cheaper than running your own hardware, at least assuming you're not always fully utilizing it. Cloud providers on the other hand, they don't really sell the resources - they mainly sell convenience, and that seems to be worth a lot.

Re: We reduced our server costs by moving away from AWS

#23

Post by bombcar »

teraflop wrote: post #14
maxfurman wrote: post #5

I feel like there's a middle step missing from this article (or I just missed it reading quickly) - did they build their own data center? Where are these new non-AWS servers physically located?

In addition, usually the main financial effect of going from AWS to on-premises is to replace a lot of your recurring monthly costs with up-front capital costs. The article spends a lot of time talking about how much lower their monthly bill is, but it says nothing about how much they spent to buy those 300 servers in the first place.

If you want recurring monthly costs for capital devices there are companies setup to do that for you.

They lease you the equipment. Yay.

Re: We reduced our server costs by moving away from AWS

#24

Post by fabian2k »

Octoth0rpe wrote: post #10
P5fRxh5kUvp2th wrote: post #2

I'm glad to see more of these types of articles, but at the same time I'm a bit flabbergasted that this isn't obvious for so many people. These cloud providers are, by definition, charging you more than it would cost you to run it yourself. What you get in return is a guarantee of expertise and an ecosystem.

> These cloud providers are, by definition, charging you more than it would cost you to run it yourself. That is _not_ a given. They're charging you more than it costs _them_ to run it. They get: - much lower hardware prices than you - lower bandwidth prices than you - likely lower electricity costs than you

Bandwith is obviously extremely expensive on AWS. But even EC2 is easily 5x as expensive as renting a dedicated server. Of course this is a deeply unfair comparison as dedicated servers don't have the flexibility of an EC2 instance and the integration into other services. So if those matter to you then the cloud is certainly worth it. But you are paying a lot more for CPU, RAM and storage compared to other options. You are also getting a lot more with AWS, but you're only saving money if you can fully exploit the flexibility of the cloud and scale the resources very well. And even then if you need a lot of egress you're screwed on the costs in any case.

Re: We reduced our server costs by moving away from AWS

#25

Post by hotpotamus »

AtlasBarfed wrote: post #19
Octoth0rpe wrote: post #10

Earlier quoted context omitted.

> These cloud providers are, by definition, charging you more than it would cost you to run it yourself. That is _not_ a given. They're charging you more than it costs _them_ to run it. They get: - much lower hardware prices than you - lower bandwidth prices than you - likely lower electricity costs than you

AWS's bandwidth charges are highway robbery. It's my impression that AWS competes with the EC2 instance cost (as it that's what new customers look at), and the bandwidth/storage only becomes apparent when you are locked in. Really what AWS should be is one or two phases of service maturity: dev infrastructure and experimentation is phase one, phase two would be the "its a couple servers" production, BUT: with a scale…

I'm also a bit blown away that anyone is surprised that AWS is expensive. Sure you can express a lot of the costs in small numbers per hour or $0.08 per gigabyte of bandwidth, but those things all add up quickly at scale.

I assumed phase 3 was where AWS started giving you massive discounts because you represent so much business for them, but I've never been at a place big enough to swing that stick at them.

Re: We reduced our server costs by moving away from AWS

#26

Post by sabujp »

teraflop wrote: post #14
maxfurman wrote: post #5

I feel like there's a middle step missing from this article (or I just missed it reading quickly) - did they build their own data center? Where are these new non-AWS servers physically located?

In addition, usually the main financial effect of going from AWS to on-premises is to replace a lot of your recurring monthly costs with up-front capital costs. The article spends a lot of time talking about how much lower their monthly bill is, but it says nothing about how much they spent to buy those 300 servers in the first place.

by servers i think they meant microservice apps/binaries/vms/containers, etc not physical machines. I also want to know what physical hardware they purchased, where they racked them, how much colocation costs, etc, etc and they go into none of that.

Re: We reduced our server costs by moving away from AWS

#27

Post by Syonyk »

maxfurman wrote: post #5

I feel like there's a middle step missing from this article (or I just missed it reading quickly) - did they build their own data center? Where are these new non-AWS servers physically located?

You can rent space in your local datacenters. If you're a business, you probably rent by the rack (and can more or less do what you want in the rack subject to power limits and datacenter policies). If you're an individual, most datacenters have some shared rack space (with controlled access, for some value of controlled - usually a datacenter employee has to be in there with you) that's rented by the U.

I put a box of mine in a local datacenter, to their... endless confusion (not only do they not deal with random individuals that often, I actually read contracts so asked questions about why I had to prove my worker's comp payments and some other weird stuff that they removed). Monthly rental payments are about what I was paying in a range of cloud spend, but the system is far more capable, and I can do a lot more on it.

Re: We reduced our server costs by moving away from AWS

#28

Post by HWR_14 »

zo1 wrote: post #15
HWR_14 wrote: post #3

Earlier quoted context omitted.

You also get a lot of finely incremental costs and the ability to grow. Like, can you really buy 0.1% more IT people? Well, yeah if you already have a thousand. Otherwise you have to buy in bigger chunks. So you save money because you can timeshare talent and hardware. And the ability to write a larger check to scale is valuable for consumer facing applications you're hoping by to grow.

Sure you can. Ask one of your devs to spend X amount of time on something. Might not be an exact 1 for 1 or 0.1% but it still beats the many many hours you'd waste architecting around cloud-specific issues and nuances. Or the cost of dealing with the friction that comes when you want to do anything with cloud in a manner that isn't cloud-supported.

Devs love being told to set up servers! And always do so well. After all, computer person is a fungible skill set.

I mean, it is fungible enough that they can learn, but they'll probably make a lot of mistakes along the way and be less efficient.

Re: We reduced our server costs by moving away from AWS

#29

Post by HWR_14 »

LanceH wrote: post #6
HWR_14 wrote: post #3

Earlier quoted context omitted.

You also get a lot of finely incremental costs and the ability to grow. Like, can you really buy 0.1% more IT people? Well, yeah if you already have a thousand. Otherwise you have to buy in bigger chunks. So you save money because you can timeshare talent and hardware. And the ability to write a larger check to scale is valuable for consumer facing applications you're hoping by to grow.

And, importantly, you can turn off your commitment to spending in a second.

I thought that was less true when you started signing deals for discounts. Commit to a spend of X and they'll reduce your bill. That kind of stuff

Re: We reduced our server costs by moving away from AWS

#30

Post by brodouevencode »

hnrodey wrote: post #8

I find this interesting, if nothing else. My first question is what was the opportunity cost of focusing manpower to setting up on-prem infrastructure that now needs maintained? What on the product roadmap was sacrificed/delayed in exchange for the time on this project? What are the projected future hiring costs to maintain these servers (and applications like Cassandra!) going forward? Nothing is free, and at just 4…

This is what a lot of people miss when they talk about moving to/from cloud providers. The marginal cost to add X more servers in the cloud is basically nothing, whereas to set up a new rack for on-prem requires requirements gathering, purchase orders, finance approvals, someone being at the dock when the UPS truck arrives, rack and stacks, etc. Those are one-time, yet very real costs. These fall under cap-ex which accounting-wise is treated very differently than op-ex. Now the cost in the cloud bakes all that in, and is distributed around with other users of the provider. Your accounting models are also easier ("pay for what you use").

Couple that with the very well known fact that AWS has outrageous data egress charges and there are patterns that can emerge where you're still in cloud but not racking up massive outbound data charges.

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