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Comment by ebiester | Hacker News Reader

Just as a reminder: You are not Dropbox. You personally need to run the numbers with both scenarios. Depending on your use case, it may be cheaper to be in AWS, and it may be cheaper to be co-located. If you are as big as Dropbox, it may be cheaper to build your own data center.

It reminds me of the arguments for and against K8s. Most of the discussion is based on use case, and not considering the solution space for all solutions. E.g. if I'm running an Erlang solution in K8s, or have a small number of servers, I may have better options.

It isn't only about scale. It takes understanding your system and your needs in depth, and any short cuts lead to cost inefficiencies.

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>You are not Dropbox

That may actually work the opposite way. The big guys can negotiate pricing with the cloud providers to the point where they may be running at close to cost. It's the small and mid tiers that get hosed with cloud pricing.

>You personally need to run the numbers with both scenarios. Depending on your use case, it may be cheaper to be in AWS

I'm not sure about that. Certainly cloud infrastructure provides a level of flexibility which may be advantageous if you're going through high rate of growth. Outside of that, I'm not sure you'd see any cost savings.

In fact it is easier to get bigger discounts if you are a mid-size customer than if you are a big customer. If you are a very big customer, then any discount given to you will directly affect the cloud business bottomline.

A public cloud inherently/structurally has more costs because it is built to be truly multi-tenant and has lots of elastic capacity.

A single tenant private cloud can cut out a lot of bells and whistles and can be tailored to the needs of the company's private use-case – this brings down the cost significantly.

If your compute/storage bill is greater than $10 million per year, then it is highly likely that for the same money you will get much higher compute/storage capacity in a private cloud. And that gives you more headroom for growth/elasticity etc.

If your bill is greater than $30 million per year, then you will likely save significantly as well as get other strategic advantages – especially if your infra scale continues to grow over next 2-5 years.

Here's another way that you're not Dropbox (unless you are): you are not a public company that gets points from investors for removing [$35M] dollars from COGS (cost of goods sold), even if you spend [$40M] on R&D + capitalized expenditures to replace it.

Stories like this can be really misleading because large companies almost can't help but trick themselves into financial shenanigans. It's very possible that Dropbox just spent $100M upfront to start saving $35M / year relative to AWS current prices... but discovers in year 3 that they are no longer saving money because AWS has reduced prices via their own R&D, which is spread over a massively larger customer base.

Now, because Dropbox is a storage company, it may well make since for them to continue R&D and try to keep pace with AWS, at least for their own needs. But 99% of other companies - of any size - would likely fall on the wrong side of the scenario above.

Why must Amazon pass off its savings to your org, in this example, rather than taking most of those realized R&D savings to their own investors?

Sure, AWS may be constantly innovating on doing things more cheaply and scalably. Sometimes, those savings get passed off to the customer; but not most of it, and not necessarily all that frequently.

Because Google and Microsoft are competing against them.

> ... and not necessarily all that frequently.

Did you miss where AWS reduces prices multiple times a year? I don't know the latest figure, but as of 2018, they reduced prices 67 times since launch in 2006.

There have been 6 price reductions this year https://aws.amazon.com/blogs/aws/category/price-reduction/ you are probably not using any of the services in question.

The only S3 price reduction I can find was in 2012 https://aws.amazon.com/blogs/aws/amazon-s3-price-reduction/

(i work at aws)

fwiw, a quick google search for `s3 price reduction` yields one from 2016: https://aws.amazon.com/blogs/aws/aws-storage-update-s3-glaci...

there's also one-zone s3 storage options which are cheaper as well

Check out these curves: https://www.stayclassyinternet.com/articles/investigating-AW...

Amazon competes with other cloud providers and with build-your-own continually, and use price segmentation to stay on the right side of the equation for as many people as possible, while still skimming as much premium for themselves from each user group. Historically, that’s meant big price drops in most categories that would make most one off investments obsolete - while still keeping a ton for themselves.

It also helps that S3 is an anchor product that helps them sell higher margin stuff.

Yes but no. The figure you reference shows the lowest price of a lowers tier available. I am pretty sure if you cannot switch from S3 with full availability to S3 Glacier, your savings will not be SO impressive as that fall-off-the-cliff figure.

The figure shows full-availability S3 at multiple price tiers depending on volume. The article discusses that price reductions were biggest for high volume -- in other words, AWS reduced price for exactly the customers who are most equipped to build-not-buy. Smaller use-cases won't see prices go down as much -- but they also won't get paid back as quickly for rolling their own.

I was at an F500 that spent a lot of money with AWS. I heard rumors that services were becoming more expensive. If you are spending a ton of money, moving off of AWS is major project that will require a lot time, money, and personal. You are kind of locked into AWS unless you convince senior management you should move off.

I want to see the kind of R&D Amazon has to do to bring down their insane egress prices ;)

They probably don't want the high egress business, anyway. Besides the whole "keep data in". They have a CDN for those businesses that need it and everything else that needs a lot of egress, they probably don't want as business.

Agreed. I work at a company that does 150 Billion transactions a day and it is cheaper being in the cloud than on prem for us. Maybe the variable cost is more but the fixed cost is a lot less for the business.

Cloud vs on prem is a ridiculous comparison. The sweet spot is almost always in the middle.

> ...and it may be cheaper to be co-located. If you are as big as Dropbox, it may be cheaper to build your own data center.

Nothing I have seen indicates dropbox "built its own datacenter." It looks like they are in Equinix, CoreSite, and DRT colocation.

You're right - I misspoke, and that likely makes more sense at their scale. At some point, I am sure they will again run the numbers.

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