Hacker News new | ask | show | jobs
by magila 2847 days ago
The hosting cost for things like Facebook and Twitter are a pittance compared to the cost of employing all of the engineers/designers/etc who enhance and maintain those services. That IMO is the biggest economic challenge facing decentralized applications.

You can make some nice proof-of-concepts with a group of volunteers, but the effort required to provide a UX comparable to centralized services is going to take more than a handful of people working evenings and weekends.

Decentralized services generally do not afford the same monetization opportunities as central services. Decentralized proponents consider this a feature rather than a bug, but it leaves open the question: Who is going to pay for all of this?

3 comments

> The hosting cost for things like Facebook and Twitter are a pittance compared to the cost of employing all of the engineers/designers/etc who enhance and maintain those services.

Facebook had $20.4 billion in operating expenses in 2017. Less than 1/3 of that was the cost of its 25,000 employees (at the end of 2017). Facebook is spending more on its infrastructure than it is on all of its employees combined (and that much more when you reduce it to just engineers). Engineers are maybe 1/5 of its operating costs, including their all-in costs.

Both Facebook and Alphabet had roughly $15 billion in total capex for 2017. Data centers, networks, electricity, et al. cost a lot at that scale. It's not a pittance. Facebook spent ~$7 billion in 2017 on capital expenditures related to their network, data centers, etc.

Facebook's first Asia data center is a billion dollars to just start up.[1] When they put up new data centers in places like Henrico County VA, New Albany OH, or Newton County GA, it's similarly nearly a billion dollars a shot to start those up. Once you have dozens of those operating, it's billions of dollars per year to operate them all.

[1] https://money.cnn.com/2018/09/06/technology/facebook-singapo...

I wonder how much of that cost is toward user-facing improvements and how much is toward extracting additional profit out of the surveillance economics model? As Mastodon and Patchwork and other federated social media platforms continue to grow, it would be an interesting and useful effort to analyze the cost structure of these alternatives.
There's too much evidence to support the conclusion that companies like Facebook are far more bloated than they need to be for their core experiences. The reason is all about laws of diminishing returns, in every cross-cutting concern of the business.

Two engineers can't do twice as much as one engineer. Perfecting the ordering of the news feed is significantly less valuable to users than just having a news feed in the first place. Building a speech-to-text engine that works 99% of the time costs hundreds of millions of dollars more than one that works 95% of the time, but is it worth that much to users? Think of the number of engineers at Facebook or Twitter who just work on infrastructure, or supporting other engineers, or perfecting ad placement to improve CTR by 0.5%. All of these are tangential to the core experience, in many cases required or at least valuable only because Facebook is so big.

I can't just pick on Facebook here; this is why all companies will always get disrupted. Massive layers of scale behind the scenes to support products that are fundamentally simple, combined with advancing publicly available technologies helping newcomers.

If the open source ecosystem as a whole has taught us anything, we can take things much further than simply proof of concept and still remain open.

I think your point on UX/UI is an important point though. Open source has a turbulent history with functional UX. We’ve done an incredible job helping the technical communities understand why open source is important but because so many of us are technically focused, we’ve fallen somewhat short on helping UX and design focused communities understand why open projects are important, on a deep level, in much the same way technically focused understand.

If we’re aiming for mass adoptions across the spectrum, onboarding the UX/UI communities is as important as it was for the technically focused to understand.

Also, there is another point worth considering, someone recently made a convincing argument to me that sometimes mass adoption may not be a good thing. Mass adoption leads to eternal September and depending on what the project is, eternal September may destroy a community. A project with a solid technical foundation but difficult UX/UI experience can be a good barrier to prevent eternal September.