[vidarh]

It's horrifyingly hard to convince people of this, though, even you can present them with actual numbers.

A lot of people have convinced themselves that cloud is cheap, to the point that they don't even do a cursory investigation.

A lot of those even don't do the bare minimum to reduce hosting costs within the cloud they choose, or choose one of the cheaper clouds (AWS is absolutely extortionate for anything that requires significant amount of outbound bandwith), or put caching/CDN's in front (you can trivially slash your AWS egress costs dramatically).

Most of my consultancy work is on driving cost efficiencies for cloud, and I can usually safely guarantee the fee will pay for itself within months because people don't fix even the most low hanging fruit.

[tialaramex]

Periodically management says we shouldn't have a DC, just put everything in the cloud.

OK says HPC, here's the quote for replacing one of the (currently three) supercomputers with a cloud service. Oh dear, that's bigger than your entire IT budget isn't it? So I guess we do need the DC for housing the supercomputers.

If we'd done that once I'd feel like well management weren't to know, but it recurs with about a 3-5 year periodicity. The perception seems to be "Cloud exists, therefore it must be cheaper, because if it wasn't cheaper why would it exist?" which reminds me of how people persuade themselves the $50 "genuine Apple" part must be better because if it wasn't better than this $15 part why would Apple charge $50 for it? Because you are a sucker is why.

[azinman2]

Apple may have markup, but the part is for sure more likely to be higher quality: https://www.cultofmac.com/news/apple-thunderbolt-4-cable-com...

[JimDabell]

Same goes for Apple power adapters:

https://news.ycombinator.com/item?id=28053398

[whstl]

It's just people conflating popularity with <every positive attribute>.

If <service> is popular, it must also be cheap, beautiful, well documented, have every feature that exists and make you popular with your friends.

I once had a Product Manager try to start an argument with me: "Explain to me how it is possible that the service we pay 25k a month doesn't have <feature>. You don't know what you are saying.". It just didn't do what he wanted, and getting angry with them over the phone didn't magically made the feature appear.

[magicalhippo]

> If we'd done that once I'd feel like well management weren't to know, but it recurs with about a 3-5 year periodicity.

So basically every time management changes[1]?

[1]: https://maexecsearch.com/average-c-suite-tenure-and-other-im...

[tialaramex]

I work in HE so there's obviously much more turnover in senior management than the rest of the hierarchy but that's individual turnover, there's no need for Jim†, who arrived last week, to task HPC with gathering a quote that six of his subordinates and colleagues already know from last time shows this is a waste of time.

† Name changed to protect individuals but also because frankly I don't care very much who is currently doing these roles, there'll be others.

[smugma]

What’s HE? High energy physics?

[tialaramex]

Higher Education. A University. So, senior management are much the same as anywhere (although maybe with at least enough sense to realise that the mission is now different) but many other people are there because of the mission. Researchers, teachers, even if what you actually do is marketing, there's a very different sense of purpose behind that than if you were selling garden furniture.

[vidarh]

Yeah, I used to be asked to price out a move to AWS every year at one position. After several years Hetzner finally got cheaper than operating our own colo's, but only basically because we were in London and London real-estate is expensive, and so colo space is accordingly expensive, while Hetzner's DC space is dirt cheap.

AWS, however, remained 2x-3x as expensive, with the devops time factored in.

> The perception seems to be "Cloud exists, therefore it must be cheaper, because if it wasn't cheaper why would it exist?

People are also blithely unaware that large customers get significant discounts, and so I regularly has to explain that BigCo X being hosted in AWS means at most that it is cost-effective for them because their spend means they're getting a significant discount over the already highest volume published pricing, and my clients usually are nowhere close to spend enough to be able to get those discounts.

[throwaway894345]

I think management is just prone to wanting to believe the grass is greener on the other side. If you are already a cloud org with negotiated pricing and cost-optimization management would ask about building a data center and you would show them how much you would need to expand your IT staff in order to acquire the skills to operate the new data center never mind the upfront cost.

[koliber]

Regarding apple parts, I recently replaced a broken screen on a MacBook pro with an OEM part. I can’t get the color to look right. Not to mention the one vertical row where pixels look off (not dead, but not normal either). The guy at the shop said I would not notice. I am now kicking myself for not going with the real thing.

[diggan]

> A lot of people have convinced themselves that cloud is cheap

I've noticed this too, freelancing/consulting around in companies. I'm not sure where this idea even comes from, because when cloud first started making the news, the reasoning went something like "We're OK paying more since it's flexible, so we can scale up/down quickly", and that made sense. But somehow today a bunch of people (even engineers) are under the belief that cloud somehow is cheaper than the alternatives. That never made sense to me, even when you take into account hiring people specifically for running the infrastructure, unless you're a one-person team or have to aggressively scale up/down during a normal day.

[bostik]

I can provide an example where cloud, despite its vastly higher unit costs, makes sense. Analytics in high finance (note: not HFT). Disclosure: my employer provides systems for that.

A fair number of our clients routinely spin up workloads that are CPU bound on hundreds-to-thousands of nodes. These workloads can be EXTREMELY spiky, with a baseload for routine background jobs needing maybe 3-4 worker nodes, but with peak uses generating demand for something like 2k nodes, saturating all cores.

These peak uses also tend to be relatively time sensitive, to the point where having to wait two extra minutes for a result has real business impact. So our systems spin up capacity as needed, and once the load subsides, terminates unused nodes. After all, new ones can be brought up at will. When the peak loads are high (& short) enough, and the baseload low enough, the elastic nature of cloud systems has merit.

I would note that these are the types of clients who will happily absorb the cross-zone networking costs to ensure they have highly available, cross-zone failover scenarios covered. (Eg. have you ever done the math on just how much a busy cross-zone Kafka cluster generates in zonal egress costs?) They will still crunch the numbers to ensure that their transient workload pools have sufficient minimum capacity to service small calculations without pre-warm delay, while only running at high(er) capacity when actually needed.

Optimising for availability of live CPU seconds can be a ... fascinating problem space.

[vidarh]

There are absolutely plenty of spaces where this is true and cloud makes sense either because it's actually cost effective, or because the cost doesn't matter.

Most people aren't in those situations, though, but I think a lot of them think they're much closer to your scenario than the much more boring situation they're actually in.

[SteveNuts]

> paying more since it's flexible, so we can scale up/down quickly

I’ve heard this argument too and I think I’ve seen exactly one workload where it actually made sense and was tuned properly and worked reliably.

[dagw]

I've noticed this too, freelancing/consulting around in companies. I'm not sure where this idea even comes from

Internal company accounting can be weird and lead to unintuitive local optima. At companies I've worked at, what was objectively true was that cloud was often much cheaper than what the IT department would internally bill our department/project for the equivalent service.

[vidarh]

I think it's because people think their workloads are extremely spiky, and so assume they will spin up/down loads enough to save money, and that has translated into cloud being perceived as cheap.

But devs rarely pay attention to metrics. I've had clients with expensive Datadog setups where it was blatantly obvious that nobody had ever dug into the performance data, because if they did they'd have noticed that key metrics were simply not fed to it.

If they did pay attention, most of them would realise that their autoscaling rarely kicks in all that much, if at all. Often because it's poorly tuned, but also because most businesses see small enough daily cycles.

Factor in that the cost difference between instances vs. managed servers is quite significant, and you need to have significant spikes much shorter in duration than most businesses day/night variation to save money.

It can make sense to be able to spin up more capacity quickly, but then people need to consider that 1) a lot of managed hosting providers has hardware standing by and can automatically provision it for you rapidly too - unless you insist on only using your own purchased servers in a colo, you can get additional capacity quickly, 2) a lot of managed hosting providers also have cloud instances so you can mix and match, 3) worst case you can spin up cloud instances elsewhere and tie it into your network via a VPN.

Some offer the full range from colo via managed servers to cloud instances in the same datacentres.

Once you prep for a hybrid setup, incidentally, cloud becomes even less competitive, because suddenly you can risk pushing the load factor on your own/managed servers much closer to the wire, knowing you can spin up cloud instances as a fallback. As a result, the cost per request for managed servers drops significantly.

I also blame a lot of this on business often shielding engineering from seeing budgets and costs. I've been in quite senior positions in a number of companies where the CEO or CFO were flabbergasted when I asked for basics costing of staff and infra, because I saw it as essential in planning out architecture. Engineers who aren't used to seeing cost as part of their domain will never have a good picture of costs.

[jinjin2]

Yes. We saved ridiculous amounts of money (and made it a lot faster) by moving our analytics workloads from Snowflake to a few bare-metal nodes running Exasol. But it took months to convince management even though we had clear numbers showing the sheer magnitude of the cost reduction. They had drunk the cloud kool-aid, and were adamant that it would be cheaper, numbers be damned.

[mbreese]

I think one business argument for cloud is capital expenses vs operational expenses. If you’re (over) paying for cloud resources vs an in house option (or colo), those are numbers that are a straight expense. When you own hardware, those are on your books until they depreciate off. For some businesses, that can make sense.

Now, a good accountant probably wouldn’t care one way or the other. Debits and credits balance either way. And spending more still means less profit in the long term, no matter how it looks on the books. But, in addition to the flexibility, that was what I always thought of as the main cloud benefit. It’s the same with leasing vs buying cars/computers/etc…

[NorwegianDude]

You don't have to buy the hardware. It's very common to rent it.

[vidarh]

But that too is based on people not knowing the alternatives, as renting managed servers can be close to a wash vs. leasing hardware for a colo (often to the point that relatively cost of land near your preferred managed hosting providers vs. colos that work with access to staff etc. might be what makes one or the other cheaper). Buying outright can be cheaper but isn't necessary.

None of the colo'd setups I've worked on bar one used purchased servers - it's all been leased. But the majority of non-cloud workloads I've worked on have not even been leased, but rented.

[tialaramex]

Cloud made sense for the startup I worked for previously. If you are a startup then a $1M per year expense makes much more sense than a $5M up front purchase with 5-10 years of life - in five years you might be billionaires or you might be bankrupt and until then the Cloud was better.

[winkeltripel]

It feels like if you're spending 1M in cloud per year, the hardware and colo will probably cost 1M to buy.

[sgarland]

If your monthly cloud bill is < $100K, you don’t need $5MM worth of hardware. That cloud spend equates to, at best, a couple of beefy servers, which (modulo AI cards) could almost certainly be had for <= $50K/ea. So for $200K, you could have a two-zone setup.

Where it does make sense in the short-term for this scenario is the experience and knowledge necessary to reliably run your own servers. If you don’t have that, you may not want to invest the time and effort to do so. But on pure cost, unless your bill is on the order of a few thousand per month, cloud will never win. It can’t; they have to make money.

[dilyevsky]

Like sibling is saying it's not $5M upfront but on the order of 1 year cloud spend for large enough accounts. There are also such things as leases and loans.

One justifiable excuse is you simply don't know how much hardware you will need to buy if you're hitting hockeystick growth. That until you realize you can also go hybrid...

[vidarh]

Or you could have rented or leased-to-own. There's hardly ever any need to actually purchase outright to get prices far below equivalent capacity in clouds. In fact, in 25 years, only one of the colo'd server setups I've worked on had any hardware purchased up-front in it.

[bitmasher9]

Cloud also makes sense with certain traffic patterns where peak requirements is a huge outlier but critical to satisfy.

[mbreese]

Or where locality is critical. Like if you have a game that hits peak traffic at different times throughout the day in different regions. So, a company may not want to own hardware in multiple regions, when they would only be at peak usage for a few hours.

[vidarh]

The variation in peak loads tends to be far smaller for most people than what they imagine, but indeed it can sometimes be cheaper. The window needs to be very short, though, to outweight the large cost differential. And you don't need to buy - you can rent.

[dilyevsky]

The classic case for this is Intuit which presumably needs most of its compute only two months a year. Not that many companies in the same boat though

[bitmasher9]

I don’t think the window length is the key metric. It’s the ratio of time between peak traffic and normal traffic time

[ksec]

Partly because AWS give out a lot of free credit for start ups, and basically allow them to grow without planning any infrastructure. VCs who are invested into Amazon also wants to push the cloud narrative. Starts up who dont want to deal with servers, want massive scale when they think the website and later an app went viral.

That was in the late 00s and early 10s. PHP, Python, Ruby and even Java were slow. Every single language and framework has had massive performance improvements in the past 15 to 20 years. Anywhere from Java 2x to Ruby 3 - 10x.

When a server max out at 6 - 8 with Xeon core, compare to today at 192 Core. Every Core is at leats 2 - 3x faster per clock, with higher clock speed we are talking about 100x difference. Especially when IO used to be on HDD, SSD is easily 1000x faster. What used to wait for I/O is no longer an issue, the aggregate difference when all things added together including software could be 300x to 500x.

What you would need 500 2U server in 2010, you could now do it in one.

Modern web developers are so abstracted with hardware I dont think many realise what sort of difference in hardware improvements. I remember someone posted before 2016 Basecamp had dozens of Racks before moving to cloud. Now they have grown a lot bigger with Hey and they are only doing it with 8 racks and room to spare.

AWS on the other hand is trying to move more workload to ARM Graviton where they have a cost advantage. Given Amazon's stock price are now dependent on AWS, I dont think they will lower their price by much in the future. And we desperately need some competition in that area.

[graemep]

For smaller businesses it seems to be its the safe option because its what everyone does.

I have even had it suggested that it might make selling a business or attracting investors harder if you used your own servers (not at the scale of having your own datacentre, just rented servers - smaller businesses still).

Another thing that comes up is that it might be more expensive but its a small fraction of operational expenses so no one really cares.

[whstl]

For smaller businesses it's often "the only thing Joe knew when he was building it".

[j45]

You have a great point about finding cost efficiencies - there was a time cloud was cheaper.

Maybe it's an understanding that doesn't change because the decision makers were non-techincal people (when finance oversees IT despite not understanding it)

Virtualizing and then sharing a dedicated server as a VPS was a big step forward.

Only, hardware kept getting cheaper and faster, as well as internet.

[vidarh]

> when finance oversees IT despite not understanding it

... and when IT often do not even get to see the spend, and/or isn't expected to.

I've had clients where only finance had permissions to get at the billing reports, and engineering only ever saw the billing data when finance were sufficiently shocked by a bill to ask them to dig into it - at which point they cared for long enough to get finance off their backs, and then stopped caring again.

[j45]

Unsure how I missed this.

Great points.

Overseeing things they don’t understand and wanting to manage and direct it feels unnatural for finance to do to other departments.

Maybe this was more common for businesses with stable business processes that aren’t evolving.

Covid and now AI will ensure change is constant and where a practice is outdated so will the organizations become.