Unless you're an infrastructure or network logistics company, it's a waste of resources to build your own. Cloud services are so commoditized already it's unlikely to be any sort of meaningful differentiator for your company. Especially if your field isn't even tech proper.
Plenty of mid sized data centres make sense too. Something I see in common with many of these businesses is either the requirement to store a lot of stateful data or to have data locality and to not be concerned with things like being able to serve international customers or being a plodding business which will predict at a steady predictable rate. Some people run businesses that run headfirst into cloud companies entire pricing strategy because their business doesn’t work like a VC funded tech startup.
The “but somebody can figure all this stuff out for you” cuts both ways. Why can’t a skilled company make it easier to staff and operate an on premise data centre? Running a datacenter only gets less labour intensive for what you get every year. You know that you can hire people for pretty much any aspect of building or maintaining a datacenter that you can imagine? The datacenter is commodified so why is it special that the cloud is?
I just feel this analysis is a spurious oversimplification and what you’re far more likely to see is a sort of Pareto distribution of datacenters and the cloud is never going to swallow the whole market.
The trick is you need skills, most of which are not in demand anymore and difficult to fill. If you pretend like you can hire and manage: the results are clear.
There are opex/capex aspects which I don't understand, I amortized servers with an average server lifetime of 3 years.
It's easier for most people to spend money with one vendor, though, and that's where AWS/GCP makes sense.
Sure cloud is easier and if you need things that aws offers then go for it; we run well on a few $100/mo. Our most sold/popular product costs (I did this calc because of another ‘cloud is great’ HN post a few months back) less than $1/mo to host and maintain and has 50k+ active users.
I like and use aws but it makes no sense in many cases; I would rob myself running most of our products on it because they don’t require remotely anything that it offers. I think the ‘make a unicorn’ mindset messed up people’s bottom line understanding; making 10k-100k$ more profit seems pathetic to companies that raised 100m$. Thing is; that is real money and I definitely rather have dinner with my colleagues than send it to Amazon.
Being able to avoid most of the costs and training and staffing you’re talking about has been a thing for a LONG time before the rise of cloud. There’s long been plenty of companies that will run the datacenter infrastructure for you or ever servers and let you hash out the details. People still made their own datacenters and continue to do so to this day. That is not why cloud has been so successful, the biggest thing cloud did to be successful was pioneer a new pay per use business model and the tools to enable it. Later on they created a bunch of new business innovations like EverythingAAS. If those innovations don’t come into play, AWS isn’t more attractive than Hetzner.
I’ve built and decommissioned smaller datacenters for different businesses a bit under 1MW. I’ve seen datacenters make no sense, I’ve seen datacenters make complete sense.
I think it's kind of "golden handcuffs" type of situation - if you want these people to come and work for you you have to compete on salary with Amazon, and Bezos has much deeper pockets than you.
The result will still be orders of magnitude cheaper than AWS.
Many companies who buy their infrastructure learn that they can run servers for 10+ years if they are properly cooled and maintained. Parts that wear out (fans and disks) are cheaply replaceable.
That's a mistake.
You can get deeper into the weeds and look at Zinc Whiskers and such but that's a niche you just have to generalize.
Engineering a web app in a way that autoscaling is effective is a lot of work. It is very well possible that renting a beefy dedicated server will do just fine and cost a magnitude or two less in renting and engineering both...
Also, people tend to say I lost my mind when I say complex and expensive high availability solutions are often not worth it: it's cheaper to be down. Because you will be down, no matter what you do, there are a multitude of services you will rely on -- and some downtime is completely expected and accepted in this industry. So adding a few minutes every few years when you need to manually fall over to a slave database versus using a complex HA database solution? A cost-benefit analysis is in order.
If you do need the cloud, yay but so many people no longer even consider whether they do.
That's plain false. Cloud companies are charging significant markups.
> except taking much longer and usually ending up with worse service ... it's a waste of resources to build your own ... Cloud services are so commoditized
All incorrect generalizations. Plenty of companies have capable engineers running their own services for cheaper. Do the math.
What's wrong with letting the specialists handle logistics so you can focus on business logic instead of basic piping?
Growing food is more like designing and manufacturing servers.
Cooking is more like taking these goods and putting them to use.
There are plenty of places that host their own servers, including people that have these servers in their home or office. But far fewer produce these machines.
You could also say that cooking food is dumb. What's wrong with having professionals chefs do it? But that also doesn't take into account the added costs which makes it unfeasible for most.
Facebook does not use cloud providers and designs their own servers.
The very large compute uses and cloud providers have incentives to grow their own food. Doing so can save them a few percent at scale. That savings is both not passed on to you and even if it was is not significant at small to medium scales.
- Ability to scale up and scale down in a matter of minutes.
- Reduction in variable capital costs required to meet peak demand.
- Ability to test and prototype products or services at scale without significant investments.
- Ability to have, on tap, products and services that in a traditional sense, would take a lot of time and manpower (A company can invest in equipment and manpower to spin a few services. But as you add more services, it costs more and more to build and maintain such systems. With cloud services, you can use, test and experiment before finalizing)If I understand your point correctly it is the opposite - cloud not only lets you trade capex for opex, but also allows for opex variance. Yes, clouds do let you scale up and down (if the application is designed to do that) easily, however how many businesses do really have high load and geography variability?
That is the core point behind cloud vs on-prem: capex vs opex and opex variance.
If you skip economies of scale that is. AWS, Azure and GCP allow you to use stuff that has cost billions of man hours and matériel to develop and deploy. How much would it cost you to build a global network? A globally distributed DB? Custom ARM/Tensor chips which come out much cheaper than mainstream alternatives for some workloads?
If all you need is to host a few apps in a narrow geographic area, or do compute/graphics intensive stuff on an inflexible scale, it will probably cost less over a long period of time (3-5 years). But it's still much more inflexible, time consuming and hard. You need to hire the right people and they need the time to order, configure and deploy all that infrastructure.
The economies of scale only get passed to the consumer if another provider is willing to pass the savings on, which only happens in commodity markets (like oil, wheat, etc.). Low-end server rentals are a competitive market. "Big 3" cloud is not: they use differentiated products and egress fees to lock you in to their oligopoly.
They don't have to pass on their economies of scale to you. They don't pass on their economies of scale to you. They charge you slightly less than your cost to leave them, and that's it.
There's no real alternative to cloud-based hosting if your application needs to be reachable from more than one geographical region or has wildly volatile usage patterns.