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Comment by tpetry | Hacker News Reader

> For example FedEx flies Boeing jets. It's completely reliant on Boeing for parts for those jets. Presumably Boeing can charge whatever it wants.

Nobody said that FedEx should build their own server hardware. And that's what you are comparing it too.

FedEx could just buy server appliances from e.g. Dell (buying the Boeing jet) and operating it. Because paying some other air cargo company will eat a lot of their margin, the same with Cloud infrastructure. They are not a startup which could better invest their time in development, they can without any problems hire some people to administer their server fleet. When they switch to a cloud they will likewise hire some engineers only managing e.g. AWS to administer it.

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I'm simplifying here, but it feels to me like you are making the assumption that FedEx is a mostly static business, whose IT needs should be all about minimizing the cost per IO or compute operation. In the real world, business needs are rarely static, and moving fast and innovating is extremely valuable, even for a company as large as FedEx. They are choosing to move resources from managing their IT infra to AWS, but what they're really gaining is not a reduction in labor costs or CAPEX, but rather the ability to move faster. Sure - given some headcount and sufficient CAPEX, a good engineering+SRE team can create and maintain a nice bit of infrastructure, but it is a significantly harder goal to truly deliver the benefit most leading cloud providers can provide an engineering org.

Probably the right amount of rented data center capacity for FedEx is not zero, yes. But it's not 100%, either, because what they're giving up is the ability to move faster when their outsourced system administration vendor isn't meeting their needs.

Most large companies do at least some elements of multicloud. This may be as simple as doing ETL in AWS and then pushing the data over to BigQuery for dashboarding, it might be using all AWS and also Office365, it might be building applications which part run against Dynamo and part run against Cloud Spanner. It's also the case that the applications you run each year have some turnover rate. Maybe you're running Jira this year, maybe you're switching to Asana in a couple of years. Maybe over a 5 year period you're moving from Teradata to Snowflake. Which cloud env do you deploy Snowflake to?

Your negotiating power is then in the momentum of change. If GCP is working better for you than AWS right now, send your new spend to GCP where possible and where stuff is rotating out, move the new stuff to GCP. If you just got a good deal from Azure, start moving in that direction.

This is one of the 'big company vs small company' things, by the way - it doesn't make as much sense for a 100 person startup. But FedEx are a 300k employee juggernaut who spend $75B each year servicing $100B of revenue. They'll have a lot of tech in use.

The optimum is very likely near one of the extrema. Either 0% or 100%.

Anything in between will just mix all the problems of a cloud with all the problems of running a datacenter.

Probably not AWS, given that Amazon is a major competitor to FedEx in the logistics sector.

I host a lot on AWS but you will need as many people in IT support as before. You can use consultants for a time but after a while your infrastructure will disintegrate because nobody knows about the intrinsic properties the infrastructure of your company.

I believe the self hosted options generally offer vastly more flexibility and can innovate at a faster pace. But only FedEx will know if it is a good decision, perhaps their infrastructure was indeed not competitive. But I heavily doubt they will save 400m in the long run.

AWS support is actually awesome and you usually get responsive within a day, even smaller businesses. But cloud hosting is only useful for certain scenarios. In this case it is Azure and I believe Microsoft currently innovates far slower than Amazon. Of course Amazon could be a direct competitor to FedEx in a few years too given they do more an more logistics. If they aren't a competitor already. In this context I would understand the decision to close their data centers because it is hard to compete with Amazon in the cloud space... a computing alliance with Microsoft would make sense.

>I host a lot on AWS but you will need as many people in IT support as before

This doesn't pass the smell test at all. Datacenter ops are way more complex than AWS ops; why would someone on cloud need IT support for VMWare, BMC Ops, Power management and generation, supply chain management and land leasing/renting? These are the few roles, off the top of my head, that just go away when moving to the cloud at FedEx's scale.

This is because most people insist on not acknowledging that running your own datacenter will involve "mundane" tasks as "sourcing bolts on a Sunday before Thanks Giving". For a great deal of the people I spoke to, "running your own datacenter" means "we hired 3 servers from a thing in London and we had 1 guy installing linux on them".

Well, I didn't really meant data centers, just in general on premise infrastructure. There is a difference of course. Our administration is almost completely in the cloud, but for production and some adapted applications we still need local data. There is simply no technical solution to run everything in the cloud and we also want to retain some data locally. VMWare is an example. UPS and backups are another. Sure, we use service providers for provisioning of new VMs but IT still needs to do maintenance of the software that runs on it, needs to keep inventory about the servers running in the company. And if you have one VM running additional provisioning is not too much work.

But sure, at the scale of FedEx this is true, they also probably have a very high percentage of administration only. Although I still think the cooperation with MS was still a strategically planned after paying attention to Amazon.

Boeing jets are a lot more like IBM mainframes than they are like Dell servers, which are still mostly commodity.

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