
When Startups Grow Out of the Cloud - da5e
http://www.readwriteweb.com/cloud/2010/07/when-startups-grow-out-of-the.php?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+readwritecloud+%28ReadWriteCloud%29&utm_content=Google+Feedfetcher
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byoung2
I suppose this is just semantics, but when a "startup" is considering ditching
the cloud to build a datacenter, isn't it well past the "startup" phase?

When I think of web startups, I picture a couple of guys in a tiny apartment
with a few linux boxes in a closet and box fans for cooling. At 3 months, they
have a $20/mo VPS, at 6 months a few Amazon EC2 instances. The next handful of
years should see them scaling nicely in the cloud, but when they get to the
point where it is less economical to continue scaling on Amazon than to build
a datacenter (like Twitter, Facebook, etc), I think they can drop the
"startup" label.

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mmt
Let me be the first to dispell the misconception that one has to be the size
of twitter or facebook to "build" a datacenter.

There's enough competition that a single cabinet with 4-7kW doesn't carry a
substantial premium[1]. My most recent estimate of the break-even point is
around $10k monthly, well within even a conservative definition of the startup
phase.

[1] Over 2-8 cabinets or even a large cage.

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byoung2
_Facebook announced plans earlier this year to build a custom data center in
Prineville, Oregon, and Twitter announced last week that it plans to build one
near Salt Lake City, Utah_

I was referring to breaking ground on your own datacenter, including managing
the HVAC, security, power, backbone connections, insurance, and personnel.
When you get to the point where that is more cost-effective than the cloud or
a few racks in a colo, in my opinion, you're past the startup phase.

What you mention could easily fit somewhere on my timeline, perhaps those
couple of years when they see that they are steady at 20 EC2 instances and
renting a cage at a colo edges out Amazon on price, if not on scalability.

