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Etsy Announces Move to Google Cloud

investors.etsy.com

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Re: Etsy Announces Move to Google Cloud

#51

Post by Analemma_ »

pm90 wrote: post #39
foobarbazetc wrote: post #13

I love GCP but honestly have no idea how these big internet properties can make the $ case for “the cloud”, unless they’re also planning to fire 90% of the Ops/SysAdmin team (ala Evernote). We run on bare metal and to move to GCP would triple our hosting cost, not including bandwidth (which is free* for us). Do people get discounts for doing PR? I’m really curious.

As with everything else, the prices will reduce over time. But to be honest: you are not the market. If you have a functioning, reliable infrastructure that isn't too expensive or PITA to maintain, you have a good enough infra and should continue using that. If you're a startup who wants to minimize capex and quickly spin up a reliable, secure infra to host your app on to get it out of the door ASAP, you would go wit…

>If you're a startup who wants to minimize capex and quickly spin up a reliable, secure infra to host your app on to get it out of the door ASAP, you would go with cloud.

But that's exactly what Etsy isn't. They've been around for years. It's a stable, mature business (at least by the standards of the sort of business they're in). What possible advantage could they gain from switching to this cloud?

Re: Etsy Announces Move to Google Cloud

#52

Post by toomuchtodo »

jermaustin1 wrote: post #50
toomuchtodo wrote: post #44

Earlier quoted context omitted.

At megacorp scales, you're wasting money going to the cloud unless your load profile is highly variable. GCP/AWS profit margins are very high versus bare metal, and if you're megacorp scale you can afford ops and bare metal you can depreciate over several years. (and before you trot out Netflix, the vast majority of their bits are served out of OpenConnect appliances colocated at eyeball ISPs and peering points)

I recently watched a Mega Corp fire the entire IT Ops department and hire a handful cloud consultants to move all of their current vSphere (thousands of VMs) infrastructure to Azure. The rationalization was that in the long run it was cheaper to maintain the status quo, and not have to worry about networking, firewall, and replication issues by hand. I'm pretty sure MS also gave them a large discount at that scale.

I don't doubt it. The winds change often, sometimes quickly. People going to move to the cloud, people going to move back to on-prem, as sure as the sun is going to rise.

My hunch is you'll see a lot of move back on-prem during the next downturn when hardware providers need to move a lot of hardware under duress while businesses look at cutting their opex (you have to pay for cloud compute/storage forever, whereas you can run on paid gear for the cost of power, network, cooling, space, and the tech people you need anyway).

To quote Warren Buffet, “You only find out who is swimming naked when the tide goes out."

Re: Etsy Announces Move to Google Cloud

#53

Post by noahl »

foobarbazetc wrote: post #13

I love GCP but honestly have no idea how these big internet properties can make the $ case for “the cloud”, unless they’re also planning to fire 90% of the Ops/SysAdmin team (ala Evernote). We run on bare metal and to move to GCP would triple our hosting cost, not including bandwidth (which is free* for us). Do people get discounts for doing PR? I’m really curious.

To answer your question, people get discounts just for negotiating, no PR required. I would guess the conversation went something like this: "___ is how much we pay to host Etsy on bare metal right now. Can you match that?" "Yes."

I'm oversimplifying - there are a bunch of other considerations, like guarantees about future prices and capacity availability and whether having more flexibility makes it worthwhile for Etsy to pay more, but fundamentally Etsy looked at their current costs and asked Google to make an offer. (I would assume they actually had all three major players bid, and Google won.)

Also to your point, the announcement specifically called out Google's AI and big data capabilities. Those are workloads that can involve a lot of bursting, so the cloud might be especially attractive. Imagine trying to implement BigQuery in bare metal - you can do it, but you have to have a lot of extra servers lying around just in case someone tries to run an analytics query. The same goes even more strongly for something like a model training workload. For bursty enough workloads, running in the cloud can be cheaper than bare metal even given the cloud provider's profit margin.

Depending on how much model training Etsy wants to do, something like TPUs might have also given Google a fundamental edge in costs over bare metal or other providers. I don't know enough to know exactly what factors went into Etsy's decision, but I think these are reasonable ideas.

Re: Etsy Announces Move to Google Cloud

#54

Post by Analemma_ »

josephhurtado wrote: post #46

It begs the question why Google Cloud and not MS Azure or Amazon's AWS? Could it be a price break they got, and also the AI advantages of Google Cloud's offerings? I am sure that played a big part.

Price breaks would be my guess. Famous names can get discounts in exchange for going public with the transition. I don't have evidence to back this up, but I get the sense that Google offers the deepest discounts, possibly because AWS and Azure have more mindshare and Google wants to catch up.

Re: Etsy Announces Move to Google Cloud

#55

Post by ThrustVectoring »

merb wrote: post #16
foobarbazetc wrote: post #13

I love GCP but honestly have no idea how these big internet properties can make the $ case for “the cloud”, unless they’re also planning to fire 90% of the Ops/SysAdmin team (ala Evernote). We run on bare metal and to move to GCP would triple our hosting cost, not including bandwidth (which is free* for us). Do people get discounts for doing PR? I’m really curious.

most cost cuts come from automation (as you already noticed). but not just more automation in ops/sysadmin space, but mostly because you can just free resources you don't need. especially one-off jobs (analytics, etc.) take a huge amount of resources for a very short amount of time and after that time the resources aren't needed. on clouds you can hope to schedule them preemtivly. also most cost savings come at night…

Honest question: why not use both? If spinning up cloud computing resources is the most cost-efficient way to do those computing tasks, why not have that be the route for doing one-off computing tasks while your own machines run the workload for recurring stuff? Is there overhead for not having 100% of your computing done on a cloud platform that I'm not aware of or something?

Re: Etsy Announces Move to Google Cloud

#56

Post by smacktoward »

Analemma_ wrote: post #51
pm90 wrote: post #39

Earlier quoted context omitted.

As with everything else, the prices will reduce over time. But to be honest: you are not the market. If you have a functioning, reliable infrastructure that isn't too expensive or PITA to maintain, you have a good enough infra and should continue using that. If you're a startup who wants to minimize capex and quickly spin up a reliable, secure infra to host your app on to get it out of the door ASAP, you would go wit…

>If you're a startup who wants to minimize capex and quickly spin up a reliable, secure infra to host your app on to get it out of the door ASAP, you would go with cloud. But that's exactly what Etsy isn't. They've been around for years. It's a stable, mature business (at least by the standards of the sort of business they're in). What possible advantage could they gain from switching to this cloud?

Some executive will get to lead a big cloud migration project, which will look great on their résumé when they bounce to their next job a few years later.

Oh, you meant advantages for the company? Never mind.

Re: Etsy Announces Move to Google Cloud

#57

Post by blaisio »

foobarbazetc wrote: post #13

I love GCP but honestly have no idea how these big internet properties can make the $ case for “the cloud”, unless they’re also planning to fire 90% of the Ops/SysAdmin team (ala Evernote). We run on bare metal and to move to GCP would triple our hosting cost, not including bandwidth (which is free* for us). Do people get discounts for doing PR? I’m really curious.

The hardware and bandwidth costs are only small parts of the full cost of running your own infrastructure. There are so many other benefits:

- you don't have to support your own low level services like Pub/Sub, Cloud Storage, Spanner, etc.

- you don't have to worry as much about things like HIPAA compliance

- developers don't have to wait for you to allocate more hardware, greatly slowing down the software development process

- it's much easier to test your applications, since you can spin up a full copy using rented infrastructure, and then throw it all away once your tests are complete

- many other benefits that I'm forgetting

And of course if you buy enough from them, you do get additional discounts.

For many (most? I don't have data) companies, the actual cost of the infrastructure and bandwidth itself is tiny compared to all the other "hidden costs".

Re: Etsy Announces Move to Google Cloud

#58

Post by pm90 »

smacktoward wrote: post #56
Analemma_ wrote: post #51

Earlier quoted context omitted.

>If you're a startup who wants to minimize capex and quickly spin up a reliable, secure infra to host your app on to get it out of the door ASAP, you would go with cloud. But that's exactly what Etsy isn't. They've been around for years. It's a stable, mature business (at least by the standards of the sort of business they're in). What possible advantage could they gain from switching to this cloud?

Some executive will get to lead a big cloud migration project, which will look great on their résumé when they bounce to their next job a few years later. Oh, you meant advantages for the company ? Never mind.

I chuckled at this comment, but this is actually a very astute observation. I've seen it happen way too many times (and destroy many companies and people's lives) to laugh about it :(.

Re: Etsy Announces Move to Google Cloud

#59

Post by ehsankia »

azurezyq wrote: post #24
foobarbazetc wrote: post #13

I love GCP but honestly have no idea how these big internet properties can make the $ case for “the cloud”, unless they’re also planning to fire 90% of the Ops/SysAdmin team (ala Evernote). We run on bare metal and to move to GCP would triple our hosting cost, not including bandwidth (which is free* for us). Do people get discounts for doing PR? I’m really curious.

Operation cost is only one side. There are more things: * Well designed security / encryption may cost a lot. * Compliance may be a pain. * multi-DC and HA * Surge resource usage over holidays. * "Sleeping" resources at night or wasted.

There's also just all sorts of other extra features you may get for free. These are things that may not be worth it for you to spend precious dev time developing, but since cloud providers can make it once and offer it to thousands of customers, it makes much more sense. You can look at the full list of GCP features [0], and it's growing every month.

[0] https://cloud.google.com/products/

Re: Etsy Announces Move to Google Cloud

#60

Post by adventured »

Analemma_ wrote: post #51
pm90 wrote: post #39

Earlier quoted context omitted.

As with everything else, the prices will reduce over time. But to be honest: you are not the market. If you have a functioning, reliable infrastructure that isn't too expensive or PITA to maintain, you have a good enough infra and should continue using that. If you're a startup who wants to minimize capex and quickly spin up a reliable, secure infra to host your app on to get it out of the door ASAP, you would go wit…

>If you're a startup who wants to minimize capex and quickly spin up a reliable, secure infra to host your app on to get it out of the door ASAP, you would go with cloud. But that's exactly what Etsy isn't. They've been around for years. It's a stable, mature business (at least by the standards of the sort of business they're in). What possible advantage could they gain from switching to this cloud?

Access to dozens of services that AWS offers, that you'd want to utilize entirely on their networks ideally. That service list is only going to keep expanding. The cost for Etsy to duplicate and maintain any of those, is high. AWS is also likely to be one of the leading platforms for AI services/tools, which Etsy will no doubt want to make heavy use of in the future; that's another expensive duplication effort if they do it all in-house.

Let's say AWS has 50 services today. Etsy won't have to duplicate any of those by building & maintaining their own versions. It's an extraordinarily time consuming and expensive process to do so. The capabilities AWS can enable will get greater, while the expense to replicate on your own what AWS can do, will also climb. The extrapolated result, is that AWS & the others will perpetually take market share for the next 10+ years from do it yourself approaches. More for the software duplication expense (time & money), than the hardware/bandwidth cost difference.

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