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Oxide Computer raises $445M (SEC Form D)

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Re: Oxide Computer raises $445M (SEC Form D)

#61

Post by steveklabnik »

Nextgrid wrote: post #40
ellieh wrote: post #14

Earlier quoted context omitted.

tbf they are probably looking for customers with cloud spend ending in 'm'

I wonder what's the selling point at that scale. If your ~monthly~ cloud spend ends in "M", you can easily justify hiring the talent needed to wrangle conventional bare-metal (in fact you can do so at much lower spends, but at these spends it becomes a rounding error). Edit: my bad, read that as monthly instead of yearly. Still, a yearly spend of millions would still make sense to bring that in-house.

(Former Oxide)

An in-house team is most likely competing with something like Dell or VMware, not really Oxide. A significant part of Oxide’s value proposition is that you’re buying hardware and software purpose built for each other. Unless you’re also going to go so far as to do all of that, which companies like Google do, of course, it’s not really the same thing.

This matters when your various vendors start pointing at each other when something goes wrong. Oxide is truly “one throat to choke” in a way others just aren’t, and stand by that quality.

(Not to mention other various efficiencies, like power, or removing things like the BIOS and BMC junk that’s in basically every other server you buy right now. And the ability to send attenuation from boot up through the host OS. Just tons of things they’re differentiated on that your in house team just isn’t going to do.)

Re: Oxide Computer raises $445M (SEC Form D)

#62

Post by rincebrain »

calvinmorrison wrote: post #50
icedchai wrote: post #34

Earlier quoted context omitted.

There are also many shades of gray between "big cloud" AWS/Azure/GCP and "my own rack" bare metal hosting.

Right like learning AWS is significantly harder than buying a big server and maintaining it

Many people who have ever had to deal with the long tail of insanities in physical hosting, like "the ceiling burst and dumped water on a rack", "the RAID controller's capacitors exploded and now you need to figure out what still works", or "for some reason three of the servers won't talk to this switch but talk to anything else using the same cables, and the switch ports work for other devices", would happily pay a premium to only deal with SaaS logistics.

(Those were all firsthand examples; I'm not saying everyone needs cloud providers, but there are reasons beyond "really good salespeople" that people opt for offloading those logistics.)

Re: Oxide Computer raises $445M (SEC Form D)

#63

Post by rincebrain »

treis wrote: post #54
dkbrk wrote: post #46

Earlier quoted context omitted.

Read the blog post on their series C [0]. It's not long, but the most relevant excepts are: > So if we didn’t need to raise, why seek the capital? Well, we weren’t seeking it, really. But our investors, seeing the business take off, were eager to support it. And we, in turn, were eager to have them: they were the ones, after all, who joined us in taking a real leap when it felt like there was a lot more risk on the t…

It says "they've entirely derisked capital" and now ~6 months later they raised twice as much. Lying is a strong word but that post clearly wasn't accurate at the time. They've raised a lot of money and there will be pressure for an exit sooner rather than later.

I don't think that's necessarily true.

You can be cashflow positive and still benefit from having a larger pool of cash to throw around, particularly in any situation involving hardware manufacturing.

If you tell your investors "our limiting factor is how fast we can spend to deliver on additional requirements for these new customers", then it can both be true that you're not going to miss payroll for 5 years no matter what happens tomorrow and more cash would be beneficial.

Re: Oxide Computer raises $445M (SEC Form D)

#64

Post by steveklabnik »

Nextgrid wrote: post #43
Alien1Being wrote: post #11

Earlier quoted context omitted.

Logical. They probably will be aquihired by someone like Broadcom.

Is there anything they're doing that can't be replicated by hypervisor/management software on commodity x86 servers? Seems like their "secret sauce" is a software stack that "just works" more than any actual special feature of the hardware . I feel like Broadcom with its VMWare acquisition could easily take these guys out if they wanted to (or for that matter, any OEM that has a line of servers + network & storage ha…

(Former oxide)

Yes, custom hardware is a significant part of Oxide. You have to build your own to do that stuff, and that’s why they did. I alluded to some of the things upthread.

I found out about this round from this thread, just like everybody else, but

> Oxide having to raise money multiple times might be a hint

That’s not the only reason to raise a round, by far, especially when you, you know, are building custom hardware. It isn’t a SaaS business.

EDIT: here’s another commentor with an example of this: https://news.ycombinator.com/item?id=49176704

Re: Oxide Computer raises $445M (SEC Form D)

#65

Post by calvinmorrison »

rincebrain wrote: post #62
calvinmorrison wrote: post #50

Earlier quoted context omitted.

Right like learning AWS is significantly harder than buying a big server and maintaining it

Many people who have ever had to deal with the long tail of insanities in physical hosting, like "the ceiling burst and dumped water on a rack", "the RAID controller's capacitors exploded and now you need to figure out what still works", or "for some reason three of the servers won't talk to this switch but talk to anything else using the same cables, and the switch ports work for other devices", would happily pay a…

I've dealt with both. I am continually amazed that people not only pay for AWS, but that it is so complicated, and that they use it in all sorts of absurd ways, not even just hosting 'vms' but using all sorts of amazon tools to do trivial tasks. I am sorry I just dont get it. Is it like learning salesforce and once you're sucked in you're just in? I am so glad I do not work at an AWS shop anymore and am very glad to be in a position where we do not use it.

Re: Oxide Computer raises $445M (SEC Form D)

#66

Post by icedchai »

calvinmorrison wrote: post #50
icedchai wrote: post #34

Earlier quoted context omitted.

There are also many shades of gray between "big cloud" AWS/Azure/GCP and "my own rack" bare metal hosting.

Right like learning AWS is significantly harder than buying a big server and maintaining it

I probably wouldn't start with buying a big server if I was just starting out. I would consider renting one from Hetzner, OVH, or many others.

There are also many other alternatives. Example: VPS providers like Vultr which have expanded to offer more traditional "cloud" features like object storage, load balancers, managed DBs, etc. Their pricing is way more competitive than AWS, especially when you consider bandwidth.

Re: Oxide Computer raises $445M (SEC Form D)

#67

Post by late2part »

rincebrain wrote: post #62
calvinmorrison wrote: post #50

Earlier quoted context omitted.

Right like learning AWS is significantly harder than buying a big server and maintaining it

Many people who have ever had to deal with the long tail of insanities in physical hosting, like "the ceiling burst and dumped water on a rack", "the RAID controller's capacitors exploded and now you need to figure out what still works", or "for some reason three of the servers won't talk to this switch but talk to anything else using the same cables, and the switch ports work for other devices", would happily pay a…

or things like "Datacenter bombed by Iran..."

Re: Oxide Computer raises $445M (SEC Form D)

#68

Post by sgarland »

__d wrote: post #55
antonvs wrote: post #30

Earlier quoted context omitted.

You’re expressing a very narrow engineer’s perspective that doesn’t consider the realities of managing bare metal hosting at any kind of scale. These are business decisions, made in terms of core competencies, capex vs. opex, and the difficulties and cost of building out a reliable, sustainable hosting operation that handles all the compliance and security requirements, and the full range of “ilities” that real busin…

You’re forgetting blame: if an on-prem system has an issue, that’s 100% on you. If AWS/GCP/Azure has an outage, that’s just bad luck, and everyone else suffers too.

Until someone gets the bright idea that you should be multi-region.

Re: Oxide Computer raises $445M (SEC Form D)

#69

Post by ericd »

rincebrain wrote: post #62
calvinmorrison wrote: post #50

Earlier quoted context omitted.

Right like learning AWS is significantly harder than buying a big server and maintaining it

Many people who have ever had to deal with the long tail of insanities in physical hosting, like "the ceiling burst and dumped water on a rack", "the RAID controller's capacitors exploded and now you need to figure out what still works", or "for some reason three of the servers won't talk to this switch but talk to anything else using the same cables, and the switch ports work for other devices", would happily pay a…

Our colo experience was pretty smooth, nothing insane like that, and saved us a bundle. Apparently ymmv. I hate working with AWS APIs by comparison, some of the worst UX I've ever seen.

Re: Oxide Computer raises $445M (SEC Form D)

#70

Post by nixon_why69 »

antonvs wrote: post #30
api wrote: post #20

Earlier quoted context omitted.

You are 100% correct but you’d be shocked at the mortal terror that “self hosting” inflicts in the minds of even people who should really know better. Also forget Dell. Check out DataPacket.com and other metal hosters. You don’t need to physically rack unless you are huge or have special hardware or security needs. The cloud industry has done an incredible job at a kind of soft pervasive propaganda that running stuff…

You’re expressing a very narrow engineer’s perspective that doesn’t consider the realities of managing bare metal hosting at any kind of scale. These are business decisions, made in terms of core competencies, capex vs. opex, and the difficulties and cost of building out a reliable, sustainable hosting operation that handles all the compliance and security requirements, and the full range of “ilities” that real busin…

Most corporations past a certain point have in-house counsel because it would be ruinous to pay Big Law for every little thing.

That's not a narrow legal perspective, it's one look at a very obvious balance sheet. The same could go for hosting.

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