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Another commenter addressed the point about 1TB drives. I'd like to help on the bandwidth side.

A T1 is simply not adequate for a web company for two reasons: 1) it is a high-impact single point of failure (any issue here results in 100% outage); 2) it is limited to 1.5mpbs. I guarantee you Heroku is beyond 1.5Mbps at peak.

To make this a fair comparison, you need to look at burstable bandwidth. Unless you want to manage your own redundant BGP routers and multiple carrier lines, you'll want blended bandwidth provided by your datacenter or a specialized company (InterNAP, etc). This bandwidth will run you $50-100/Mbps/mo (let's say $75) and is billed at 95th percentile of usage. A year and a half ago when my company's EC2 network transfer costs were ~$8,000/mo (with a total EC2 bill of ~$30,000/mo), I worked out a bandwidth need of ~60Mbps (at 95th%) - this would represent a bandwidth cost of $4500/mo. Let's assume Heroku's EC2 cost breakdown is similar, and that their needs are 2/3 of what ours were then - we're left with $3,000/mo for bandwidth.

Yes, you're still paying a premium, but the cost savings of colo hosting are quickly offset by the additional manpower required to maintain physical servers. Whatever difference still remains is easily justifiable given the amount of flexibility the cloud affords you. This is exponentially more important for a startup where agility can make or break you.

If you're paying $50-$100/mbit at the 60mbps level, you're paying list price (aka getting ripped off). You should be paying $40 at most, and if you are any good at negotiating and making vendors compete, you can get them down to $15 or so. They're paying in the <$5 range, so they're still making some margins at $15, just a matter of how much they want your business.

Your math is flawed.

Realize that, for what Amazon charges currently, you can buy an equivalent 1TB disk drive every single month.

You forget that disks fail. You forget that you always have to buy them in pairs for availability. You forget that someone has to be there (physically) to swap them. You forget that storage arrays that can truly scale seamlessly (akin to the experience EBS gives you) cost a fortune, not to mention the accompanying fibre channel infrastructure. You forget that maintaining a large scale Xen deployment is non-trivial (hint: there are companies making a living only of that!).

In short, you forget many things that bite large chunks out of your imaginary generator/party budget.

You're right, my math was flawed, though possibly not in the way you were implying, because:

I added a T1 ($250/month) to a building rental ($2000/month), and then said that they'd have $10,000/month left over.

Why would I do such a thing? Why, so that:

They could upgrade to redundant DS3s (or better!)

They could buy extra drives!

They could pay someone to live within a few miles and carry a cell phone that accepts text messages!

...etc.

Doubly funny, to me, is that "disk failure" is being mentioned in the comments on an article about how all of their disks failed all at once. So, no, I certainly did not forget about disk failure. Indeed it's one of the reasons that I'd rather not host certain things as EC2 instances.

As far as scalability: Well, how far would 67TB carry you? Because you could deploy 67TB every single month and still have money left over. [1]

To get to the meat of my argument: I think that what's both great and horrible about EC2-like services is that they allow programmers to deploy Really Big Things without having to employ or deal with system administrators.

As a result, it's a solution that's being misapplied in some cases.

[1]: http://blog.backblaze.com/2009/09/01/petabytes-on-a-budget-h... -- it even has pretty pictures

Well, I've been doing the infrastructure thing for a living for a while and it's always half amusing, half worrying to see comments like this.

So, no, I certainly did not forget about disk failure. Indeed it's one of the reasons that I'd rather not host certain things as EC2 instances.

I was mentioning disk failure as part of ongoing maintenance, which is a different thing to a once-in-a-year blackout that you (as the reseller of the service) don't have to debug and recover or actively protect against.

As far as scalability: Well, how far would 67TB carry you?

See, that's where the amusement starts. A service like heroku it would probably carry not very far. Their service is not about storage. The backblaze gives you 45 spindles for cheap. 45 spindles translate to roughly 4500 IOPS. That's a significant rate. It's also a rate that a few database intensive customers can exceed with ease.

Now you're suddenly in an entirely different game called "Storage Engineering". It's about things like balancing IO hotspots, redundant data paths and many other pesky little details that were not exactly your core business in first place.

You sure can scale out with backblaze, but it's rather unlikely that you can do it for cheaper than what amazon has on offer (economies of scale, y'know) because scaling IOPS is quite a bit harder than scaling capacity.

Here's a quiz for you: Why do you think none of the cloud providers other than amazon has an offer anywhere near the flexibility/price of EBS?

I'm curious, how do the Intel X25-E's change the IOPS scaling challenge?

> The average T1 costs around $250/month

What's the relevance of this T1? How many of the 45k apps do you think you can serve concurrently in 1.544Mbps?

I don't have as much bandwidth as most people I know, but I can't imagine having any issues saturating a T1 on my own.