

Ask HN: Why is hosting on the cloud so cheap? - kraemate

I am amazed by how cheap services like amazon EC2 are. Somehow, the numbers just dont add up: electricity,cooling,hardware, bandwidth. 2cents/hour just doesnt make sense. 
Am i missing something?
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knoxos
Agree to fgblanch.

On the first view AWS services seem to be cheap. But be aware of additional
costs, for traffic, requests (no, that is not in the traffic included, e.g.
SOAP requests), IP addresses, persistent storage or snapshots for your servers
(e.g. EBS).

Big advantage within the AWS services is that you can reduce your CAPEX and
your invest in your own hardware infrastructure.

If you calculate your use case detailed, you will see that sometimes dedicated
servers offers are still cheaper than some cloud hosting services.

~~~
byoung2
_But be aware of additional costs, for traffic, requests (no, that is not in
the traffic included, e.g. SOAP requests), IP addresses, persistent storage or
snapshots for your servers (e.g. EBS)._

Here is what it cost me to run 2 micro instances behind a load balancer for 4
days (the hidden costs were more than the servers themselves):

    
    
      US East (Northern Virginia) Region
      	Amazon EC2 running Linux/UNIX
      	  	$0.02 per Micro Instance (t1.micro) instance-hour (or partial hour) 	193 Hrs 	3.86
    
      Amazon EC2 EBS
      	  	$0.10 per GB-month of provisioned storage 	4.183 GB-Mo 	0.42
      	  	$0.10 per 1 million I/O requests 	144,345 IOs 	0.01
      	  	$0.15 per GB-Month of snapshot data stored 	0.193 GB-Mo 	0.03
      	  	$0.01 per 10,000 gets (when loading a snapshot) 	3,195 Requests 	0.01
      	  	$0.01 per 1,000 puts (when saving a snapshot) 	3 Requests 	0.01
    
      Elastic IP Addresses
      	  	$0.01 per non-attached Elastic IP address per complete hour 	506 Hrs 	5.06
    
    
      Elastic Load Balancing
      	  	$0.008 per GB Data Processed by the LoadBalancer 	0.013 GB 	0.01
      	  	$0.025 per LoadBalancer-hour (or partial hour) 	95 Hrs 	2.38
      	  	  	Download Usage Report » 	11.79

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fgblanch
The first thing is that it is virtual hosting. You don't really get a machine,
you get a virtual one . And you can have a lot of virtual machines under a
Physical one. SO this divides costs a lot.

Also I'm not sure but I read somewhere that in the beginning the idea for
companies like Amazon or google was to reuse their infrastructure(hardware,
bandwith, electricity) by selling virtual machines inside their servers. So
they invest in the machines for their services but try to pay part of this
inversion renting part of it.

~~~
kraemate
Even with virtualization - how many virtual instances can you possibly fit on
a single blade server to give reasonable performance? I'm guessing 4 to 8? A
quick calculation shows that electricity costs for a 200W machine is 3 cents.
Cooling costs same. So that's 6 cents/hour for just these two.

~~~
RobGR
I think it is a lot more than 4 to 8. The probably have between 16 and 64 GB
of RAM per machine, and if they are 512MB instances, they fill it up. So
figure 32 to 128 instances per machine. Those machines may use more than 200
watts, and the "reasonable performance" may be not that good.

Has anyone here ever tried out the Ubuntu Enterprise Cloud ?

~~~
rubinelli
These numbers look right. For low-end VPSs, I've seen a rule of thumb of 4-5
VMs per core. Amazon's Compute Units are probably close to (but not quite) 1
core/hour. Since they later launched micro instances, even one core must have
been overkill for many customers.

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kraemate
OK look at this way. A cheap _desktop_ CPU(4G RAM) costs > 200$. Say 4 VM
instances on it (i really am not sure if that can give good
performance).Electricity cost for this is 3c/hr. Bandwidth extra - say 1c/hr.
Cooling is 3c/hr too. So, if i need to recover the cost of this machine over 2
years (the average life of cheap off-the-shelf stuff) i would need to charge
7.25 cents/hr. And i haven't even considered network equipment, maintenance,
redundancies, etc.

