Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Is the Cloud Recession-Proof?

interconnected.blog

Post reply on HN
Print view View original

51–60 of 116 posts

Re: Is the Cloud Recession-Proof?

#51

Post by chii »

jlg23 wrote: post #45
pram wrote: post #2

Definitely not. My company has been drastically scaling back our AWS spend and I mean about a $10m+ a month reduction. I guarantee we're not alone. All the gee-whiz resume-driven-development type project infrastructure was the first to go lol.

Pretty sure a typo and the million wanted to be a kilo? $120m/year for apparently unnecessary IT capacity would be hard to hide even in government contracts...

$120m is not ridiculous for a medium to large enterprise.

For an engineering team of ~1000, just the build servers will cost about $1-5m a month (depending on what's being done there).

Re: Is the Cloud Recession-Proof?

#52

Post by 9nGQluzmnq3M »

hnarn wrote: post #36

The cloud is the opposite of recession proof. Why do you use the cloud in the first place? Flexibility, scale, ease of operations. What are you gonna do with your servers during a recession, put them on Craigslist? Are you gonna put your entire datacenter on there too? The same mechanic that makes the cloud attractive in the first place is what will bring the hammer down in a serious recession. Companies will turn ev…

On-prem servers don't run themselves: there's hardware maintenance, depreciation, security, networking, license renewals etc etc.

The typical customer I see who's moving from on-prem to cloud has a clear trigger/deadline in the form of hardware reaching EOL or licenses being up for renewal, and these aren't going away with COVID.

Re: Is the Cloud Recession-Proof?

#53

Post by 9nGQluzmnq3M »

jjeaff wrote: post #30
tanilama wrote: post #9

I would say probably. It is like electricity or water. Yes unnecessary spending will be curbed, but surge in other fronts from the system will compensate that. Overall, it is hard to imagine that Cloud business will not be hurt, but it will have some resilience to battle it.

For the big 3 cloud providers, even if their cloud did contract significantly, they are all poised to earn more on the other parts of their business to make up for it.

Amazon as a retailer, sure, but why would this be true for Microsoft (software licenses) or Google (ads)?

Re: Is the Cloud Recession-Proof?

#54

Post by chii »

imtringued wrote: post #47
hnarn wrote: post #36

The cloud is the opposite of recession proof. Why do you use the cloud in the first place? Flexibility, scale, ease of operations. What are you gonna do with your servers during a recession, put them on Craigslist? Are you gonna put your entire datacenter on there too? The same mechanic that makes the cloud attractive in the first place is what will bring the hammer down in a serious recession. Companies will turn ev…

You can significantly reduce your power bill by turning the servers off.

the power bill is only one small component of the cost of physical servers.

The main cost is the up-front capital. This capital has a cost (aka, the cost of capital in finance parlance), which either come from debt, or financed by equity, or in opportunity cost.

Therefore, shutting the servers down will not decrease that cost of capital, and so continue to cost the business that cannot make use of the servers in a recession.

The great thing about cloud servers is that it's pay per use - so there's no cost of capital. And in bad times, the expense can be eliminated, and directed else where that's more needed.

Re: Is the Cloud Recession-Proof?

#55

Post by toomuchtodo »

9nGQluzmnq3M wrote: post #52
hnarn wrote: post #36

The cloud is the opposite of recession proof. Why do you use the cloud in the first place? Flexibility, scale, ease of operations. What are you gonna do with your servers during a recession, put them on Craigslist? Are you gonna put your entire datacenter on there too? The same mechanic that makes the cloud attractive in the first place is what will bring the hammer down in a serious recession. Companies will turn ev…

On-prem servers don't run themselves: there's hardware maintenance, depreciation, security, networking, license renewals etc etc. The typical customer I see who's moving from on-prem to cloud has a clear trigger/deadline in the form of hardware reaching EOL or licenses being up for renewal, and these aren't going away with COVID.

On prem equipment can be depreciated, and you can drag out the useful life of the equipment you own if necessary. Cloud opex evaporates each month, never to be seen again.

CTOs/CIOs call the shots when times are good, CFOs when times get lean.

Re: Is the Cloud Recession-Proof?

#56

Post by wskinner »

pram wrote: post #2

Definitely not. My company has been drastically scaling back our AWS spend and I mean about a $10m+ a month reduction. I guarantee we're not alone. All the gee-whiz resume-driven-development type project infrastructure was the first to go lol.

It's easy to accidentally waste a lot of money on AWS. My company cut our costs from ~20k/month to ~6.5k/month with no degradation of UX or dev velocity. It was all due to unnecessary redundant builds and integration tests and lingering unused resources. We used the CloudForecast service to identify and track costs (https://cloudforecast.io/). An underrated side effect of this service is that making costs visible to the engineers incurring the costs can encourage them to spend less.

Re: Is the Cloud Recession-Proof?

#57

Post by tanilama »

9nGQluzmnq3M wrote: post #53
jjeaff wrote: post #30

Earlier quoted context omitted.

For the big 3 cloud providers, even if their cloud did contract significantly, they are all poised to earn more on the other parts of their business to make up for it.

Amazon as a retailer, sure, but why would this be true for Microsoft (software licenses) or Google (ads)?

Lest not Google. I can't think of how Google can benefit itself from the COVID situation

Re: Is the Cloud Recession-Proof?

#58

Post by simonebrunozzi »

Cloud providers are not recession proof; they would have a hard time collecting money if most other businesses are doing badly.

Chapter 11, and voilà, AWS needs to stay in line with countless creditors and get a tiny fraction of what the customer owes them.

Re: Is the Cloud Recession-Proof?

#60

Post by gameswithgo »

pram wrote: post #2

Definitely not. My company has been drastically scaling back our AWS spend and I mean about a $10m+ a month reduction. I guarantee we're not alone. All the gee-whiz resume-driven-development type project infrastructure was the first to go lol.

We have had to scale up our AWS spend! And any gee-whiz solutions to improving efficiency and scalability are very welcome right now.
Post reply on HN