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0 pointskkielhofner1y ago0 comments

> They negotiate network and power contracts at a scale that exceeds any typical Fortune 500 company.

..and then mark it up. AWS overall has 38% operating margin[0]. Depending on your application this can hit you really hard (cloud egress bandwidth being an especially obscene offender).

> I'm skeptical that running your own data center will end up a cost saver in the long run.

It's not cloud -or- your own Azure-scale datacenter. There are any number of approaches in between including hybrid to offload stuff like CDN, storage, edge services, etc to cloud but the fact remains many companies can run the entire business from a few beefy machines in co-location facilities. Most companies, solutions, etc are not actually Google, Snapchat, Geico, etc scale and never will be.

Throw in some minor accounting tricks like leasing (with or without Section 179) and these kinds of "creative" approaches are often impossible to beat from a pricing/performance and even uptime standpoint. That's certainly been my experience.

[0] - https://www.theinformation.com/articles/why-aws-fat-margins-...

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TheNewsIsHere1y ago

Speaking as someone who has seen (partially) behind the hyperscale curtain, I wholeheartedly agree.

Competing with an Azure, AWS, or GCP data center would absolutely be a _really_ expensive proposition, but it’s not something most Fortune 500s need (or want) to do. Hyperscaler data centers are intentionally designed to effectively be both available to (almost) every possible customer while also adhering to (almost) every GRC framework, redundancy metric, and security requirement that most of those potential customers may ask for.

If you’re running your own data center, you don’t need to worry about most of that. You only have to worry about your own needs or that of your customers.

The misconception that it’s either-or, or that the cloud is the prime solution for all use cases, is simply the result of really effective evangelism and marketing. That so many people working in software don’t have deep hardware expertise or are not familiar with data centers plays to that hand. Not a criticism, just an observation from my experiences.

Not that the cloud isn’t a very powerful option indeed.

kkielhofnerOP1y ago

> That so many people working in software don’t have deep hardware expertise or are not familiar with data centers plays to that hand.

I like to remind myself that AWS is 20 years old. That's an entire generation of people from devs to C-Suite that likely don't know anything else. For many of these people all they know about hardware is their laptop. All they know about bandwidth is what they pay their local ISP. All they know about storage is (maybe) USB flash drives and what Apple charges for 256GB vs 512GB.

This is not a criticism. More of a reality check to myself and others that at this point not a lot of people outside of bigger cloud and ISPs know what an Autonomous System is or what buying transit and peering costs. Nor have they bought a cabinet of bare metal or talked to a co-lo provider.

> Not a criticism, just an observation from my experiences.

Exactly!

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