Google Is All About Cost Control Now (opens in new tab)

(wsj.com)

21 pointsdrubio3y ago5 comments

5 comments

5 comments · 3 top-level

akhayam3y ago· 2 in thread

“AWS cloud unit was generating operating profits of more than $2 billion a quarter when at a similar revenue level.”

I was at AWS when this was unfolding and cost was never an afterthought. I also felt that the best way to control costs is to make it a section in design docs. This would force the developers to consider costs when proposing design alternatives for a new service or enhancing an existing service.

inowland3y ago

So not to totally contradict, but when this was happening, I was at AWS in management in its largest revenue business (EC2), and while cost was never an afterthought, management worked hard to prevent most engineers from having to be overly concerned with this vs the other major engineering tradeoff factors (features, reliability, engineering time). i.e. we would give constraints at the "cost" level, but they were abstract, more in terms of moving forwards from existing solutions.

In particular, there was a strong understanding that engineers would overfocus on optimizing for what was asked, and so the deliberate overfocus was on "thinking big" on products that could grow rapidly while having pricing and engineering models that may be neutral margin in the short term; only in the long term paying off as positive margin (without needing to "surprise" customers with a price change).

akhayam3y ago

I believe AWS struck the right balance to "Think Big" and not worry about minutiae at the beginning, while tightening the belt and ensuring costs are not out of control at later stages. One of my teams was given the charter to map the entire world's Internet weather map. This service collected billions of data points every 5 mins and we spent many 10s of millions doing it. But as soon as the innovation phase was over, I had to take a goal and start an MBR (Monthly Business Review) to drive the costs down. This was a really interesting mechanism which doesn't stifle innovation in the short-term but doesn't let costs go crazy in the long-term.

Did you see a similar pattern in EC2?

drubioOP3y ago

https://archive.is/5F54l

spoonjim3y ago

Businesses are supposed to care a lot about cost control. The fact that they didn’t for a long time was the anomaly.

j / k navigate · click thread line to collapse