[mozman]

I did a detailed price cost calculation of onprem vs AWS as I worked at a MSP. Our cost of compute and storage including DC construction over 10y was about half the cost of AWS.

We also used cheap supermicro and had no service contracts or warranties we had on site staff. Their salaries were included.

Small DC 2mw.

[happytiger]

I think Cloud has never been a question of costs — it’s generally about not having to become operational experts in house and maintain that expertise as it’s not a core business function (hard for SMEs for example, to retain talent outside of overhaul and project cycles), overall desire by senior management to single source vendor management, and a “throat to choke” that keeps you from losing your job if problems arise.

These are the drivers I’ve seen, with cost a distant third, fourth or fifth. Can’t wait to see what happens this economic cycle.

[coffeebeqn]

The infrastructure the simplest little offering on a modern data center is so immense that honestly it’s a good deal often. If you’re a small-midsize company what’ll you do - put a bunch of computers in the office closet and get what uptime and latency?

[pclmulqdq]

Pretty good uptime and exactly the same latency (CDNs != cloud, and that's where most latency is handled). Not 99.9%, which is the big selling point of clouds... as long as you forget about all the times that their complex infrastructure collapses on itself and loses you that third 9.

[mulmen]

Thanks for this insight. It’s a perspective I don’t have. Did you build the site? Is it performing as expected?

I know “nobody got fired for choosing AWS” but the real value seems to be in burst loads. If you have predictable, stable workloads I can see on prem or hybrid making more sense.

[sokoloff]

So long as stable also means "unchanging" (in the sense of no new machines are being deployed). Our biggest win from AWS was never having to think about DDoS; our second biggest win was never having to wait for our Ops team (who was very good overall) to have the discussions about how to deploy new hardware, new storage, etc.

I get annoyed when a new EC2 instance takes 2 minutes to launch now. That time used to be not productive to measure in hours.

[mulmen]

Yes the benefit of the cloud is the ability to change deployed capacity quickly.

[Closi]

We also need to bear in mind that SaaS vs On Prem also often implies 'subscription' licensing vs perpetual software licensing (one off + support payments).

If a SaaS product is $100k per year (subscription) the equivalent perpetual license cost is probably $200k (one off) + $40k annual maintenance (my very rough rule of thumb after doing lots of tenders - a perpetual license is usually two years of the subscription fee plus 20% of the perpetual license cost as support fees).

[lowbloodsugar]

If you can afford to build a data center and know you have that fixed amount of capacity for 10y then you’re not talking about 99.99% of businesses. For everyone else the cloud is cheaper. In fact, to your customers, you are the cloud, so I’m not sure what you are arguing.

[endisneigh]

I don't think they're arguing anything.

The parent wondered:

> It would be interesting to see what the corresponding figures are like for on-prem

They replied. Not everything is an argument.

Also, they didn't say anything about fixed capacity - they're likely just talking about 10Y deprecation which is a very common accounting thing to use - and "For everyone else the cloud is cheaper" is definitely not true. It depends on workload and architecture. If you're in the business of selling infrastructure, for example, using the cloud will eat most of your margins (this is not to say that it's not done, but usually there's some caveats, e.g. maybe you will get some cheap VMs provisioned and do your own fleet management ontop instead of building everything on top of say, firebase or dynamodb).

[hjhffyuu57]

Thanks this was helpful, somewhat in line with the numbers we've been throwing around.