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Comment by late2part | Hacker News Reader

That random person is right. One can run a DC at scale of 50 racks at least 20% cheaper than GCP. That's $80M a year to hire 20 smart people at $2M a year and 200 reasonably smart people at $200k per year. Snap will vanish like their pictures.

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I think you're very conservative on that estimate. We run an infrastructure on dedicated leased hardware (Rackspace). Our infrastructure costs are a fraction of what the equivalent public cloud footprint costs. With technologies like Kubernetes and CoreOS, our private cloud practically runs itself. We focus on apps and the developer pipeline, much like we would do if we were on GCP/GKE. We have approximately 60 dedicated servers. We're almost at the scale where it makes sense to leave leased baremetal for colocation. For a company like Snap, it's hard to believe that they couldn't save a few hundred million by building their own footprint in leased datacenter space.

The days of needing massive ops teams to run on owned and colocated hardware are long gone.

Agreed. I've become immured to paint the least rosy picture that makes the point.

For a company that has always been handed (basically free) money at obscene valuations, why would you assume they care about two billion? Maybe it's just as simple as that?

It's an excellent argument as to why I will not be purchasing this stock.

That's assuming that:

- GCP will always have a margin that high

- Snapchat is paying the advertised rate

- They can find the requisite talent in a reasonable timeframe

Bingo. They aren't paying advertised rates. Google will have margin but not as much as usual. Snap also has google by the balls here. What if snap comes out with a statement saying Gcp sucks and they're moving to aws?

>Snap also has google by the balls here.

Surely they don't.

>What if snap comes out with a statement saying Gcp sucks and they're moving to aws?

Then we question why Snap committed billions of dollars to infrastructure that "sucks", and wonder why they couldn't figure it out, but Google could.

You think people will take Snap more seriously than Google itself?

Yes, I do think Google's biggest customer leaving their platform vocally would be more impactful than Google promoting/defending itself.

If Snap threatened to leave I'd wager that even the CEO of Google would get involved to keep their biggest cloud customer. Snap's revenue and brand name have enormous value to Google. There simply aren't that many $2 billion dollar cloud customers right now.

I'd bet $200k that Eric, Sergey, and Larry have all spent hours with this deal.

Snap signed a contract - how are they going to leave that contract? Yes, maybe if there is significant breach by Google, but that's lawsuit level.

without knowing what's in the contract there is at least one way I can think. Make a statement saying all new workloads are being deployed elsewhere. Lots of ways to play the game.

This only accounts for hardware cost.

What about the cost of writing the software services that you could pay Google Cloud to use?

How much would it cost to write your own Compute Engine, or Datastore, or Pubsub, or Bigquery?

Is 50 racks the right point of comparison here? Different scale levels will cost different amounts per server.

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