
The Amazon Premium - elorant
http://calpaterson.com/amazon-premium.html
======
mdasen
The comparison on the Google compute instances is a bit iffy.

First, why are we looking at Google's N2 instances rather than N1 instances?
The N1 instance would be $52 rather than $61, but the author hasn't talked
about why they selected the more expensive N2 instances. Given that
competitors don't talk about the CPUs they're using, it seems weird to select
the more expensive CPUs for Google.

Second, Google offers dedicated hyper-threads. The author says that cloud
providers (like Google) are more expensive, but they've compared dedicated
hyper-threads on Google with shared hyper-threads on Digital Ocean. DO offers
an 8GB 2 vCPU (2 dedicated hyper-thread) instance for $60/mo, but the author
is using the 8GB instance with shared CPU for $40/mo.

So, with storage, Google costs about $52 while DO costs $60 for an equivalent
instance. Linode's $60 8GB dedicated vCPU instance does come with 4 cores so
it seems like a better value. One can also argue that the included transfer on
Digital Ocean offers $8 in value. However, the premium for the instances alone
isn't as big for Google. In fact, google seems cheaper.

Now, it's probably a fair comparison for Amazon's instance which only gives
you CPU credits for around a third of the time.

Google's automatic sustained-use discounts and dedicated hyper-threads make it
really competitive with Digital Ocean (if you don't need a lot of bandwidth)
as long as you're doing an apples-to-apples comparison. DO's over-sold CPU
instances will be cheaper because you're getting less. If DO didn't offer
dedicated hyper-thread instances, maybe you could claim that they were
equivalent. But DO literally sells something more equivalent for $60 rather
than $40.

EDIT: Also, OVH is a bad comparison. OVH is cheap, but inconsistent in their
product offerings. The author notes that they offer hosted DB services, but
that's only in France. Their US, Canada, Singapore, Germany, Poland, and
Australia locations don't offer that. Their US website is missing pricing on
many of the things they seem to offer. Plus, at a certain point, when you're
trusting someone with your datastore, you want a high level of certainty.
OVH's website doesn't inspire confidence given how much seems like someone
didn't even check it. It's certainly cheap, but it seems cheap for a reason.

One final thought: I'm surprised the author hasn't talked about transfer
pricing. Cloud providers usually charge a bundle while others charge a lot
less. 1 cent per GB at Digital Ocean is a lot less than the 9 cents per GB at
AWS. AWS even charges 1 cent per GB for data transfer between AZs in the same
region. If you're running a compute and Kafka cluster in 2 AZs, then writing
1GB to a quorum of 3 servers means paying 1.5 cents per GB written (assuming
that half the time you're writing to 2 servers outside your AZ and half the
time you're writing to one server outside your AZ). Likewise, when you go to
read it, if half the time you're not reading from a local AZ, you're paying
half-a-cent per GB to read the data. So processing 1GB costs 2 cents. That
adds up fast. Everyone compares things like compute instances and seems to
ignore data transfer costs. Frankly, Google is competitive on storage and
compute costs with places like DO. However, if you are trying to create the
next Imgur, you probably care more about transfer costs than compute or
storage costs.

~~~
calpaterson
Hi, author here.

The reason I chose the n2-standard-2 over the n1-standard-2 was because the N1
instance in question has only 7.5GB of memory rather than 8GB. I let OVH slip
on this one because they didn't have any other instances in the same ballpark
but Google did. One of the eggs you have to crack when doing such a comparison
I'm afraid.

With respect to the discussion of what really is a fair comparison to 1 unit
of Google's proprietary vCPU units: that is of course open to speculation. One
of the tremendous problems of cloud computing pricing is that the big three
suppliers like to a) take a proprietary unit like "vCPU" which is not in
common parlance and b) then repeatedly quote the cost for it in a tiny unit
like hours. An n2-standard-4 is 0.0517 USD per hour - great. And let me really
get the boot in: I hate that google's pricing page continuously defaults to
the this useless unit on every page load. That company is probably the largest
producer of web cookies worldwide but to remember that one, essential, UI
slider was too much apparently. I broadly file this under the objection of
"This is a naive navigation of the pricing schemes of $BIG_TECH" that I cover
in the article

Transfer pricing is a real issue and arguably where $BIG_TECH really come and
rip your face off. Egress bandwidth is priced at an unreal level precisely
because people like me doing comparisons forget about it. In this respect
$BIG_TECH are like the chinese restaurants where the dish is £5 but a 250ml
bottle of coke to go with it is £6. I should have included it and if I did the
comparison again I would model a small defined application rather than a small
specific spec size. Mea culpa.

I still think the view I express in the article is right: $BIG_TECH cost a
chunk more.

~~~
mdasen
Given that google tells you what CPUs they use and that a vCPU is one hyper
thread on that CPU, it doesn’t seem proprietary at all. Digital Ocean’s shared
CPU plans seem like the ones where you’re unsure what you’re buying. Your
thesis might still be valid, but you’ve definitely misled readers about
Google’s offering. You’re comparing dedicated resources to shared resources
when DO and Linode show you that they have higher prices than what you’ve used
for equivalent instances.

Edit: also, you can create custom sized instances so you could have created an
8GB 2 CPU N1 instance for $49.63/mo.

~~~
AlphaSite
DO also comes with free guaranteed bandwidth.

------
blantonl
I often see these comparisons done to try to discredit the use of cloud
computing resources, often comparing single cloud entities to bare metal one-
for-one comparisons.

But that's now how compute is delivered in projects any more. The value isn't
on the box, it's on _the platform_.

I'm personally about to bolt together a solution that will need to scale
significantly, that uses complex message queuing, enormous amounts of object
storage, expose set of APIs, and require a highly available distributed
document store. And I'm going to personally do it _by myself_ without having
to hire 14 SMEs across each of the domains.

The value isn't in a cheaper linux server, or less expensive bandwidth. The
value is me being able to develop a solution from the ground up by bolting
together Web services, Amazon S3, SNS/SQS, Lambda and DynamoDB from a menu of
integrated services all by myself. Period.

~~~
scarface74
And to not have to worry about the infrastructure gatekeepers.

~~~
GuyOnMySpace
Yup. Lots of tin-huggers don't appreciate that it isn't the _hardware_ that
people are trying to get away from, it's _them_.

~~~
scarface74
Speaking of which. My last job I was the dev lead and we were doing everything
on prem. Then we hired “consultants” to help us “move to the cloud”. I didn’t
know the first thing about AWS when the migration started.

I didn’t know at the time that the consultants were a bunch of old school
netops folks who took one AWS exam and all they knew was how to duplicate an
on prem infrastructure in AWS.

Of course as always, if you take your on prem thinking and processes to the
cloud, you now have the worse of both worlds. All of the process and people
overhead of being on prem and you’re spending more for the privilege.

I started studying for the AWS architect associate exam just so I could talk
the talk and I realized how much unnecessary work we were doing instead of
using managed services. I presented my entire plan to the consultants and they
didn’t tell me once that there was a better way.

For phase 2, I wanted to be more “cloud native” there was so much push back
from the netops people who could tell they were losing their grip.

Not long after, I changed companies to work for a company where the new CTO -
a smart guy who is definitely not young - always prefers managed services.

I’ve worked for small companies and everything I do in AWS, I’ve had to do on
prem in the last 20 years. Never again.

------
mmahemoff
There's really no controversy that AWS, Azure, and GCP are substantially more
expensive than bare metal providers, if you're simply comparing machine specs.

So if all you're doing is setting up root access and handling everything
yourself, then yes, you're throwing huge wads of cash down the toilet with
those platforms versus renting a VPS on Linode, Digital Ocean, etc.

The economic disparity can flip, though, if you use these services as they're
intended. i.e., take advantage of features that are charged incrementally and
optimise to reduce how much they're activated per user transaction, where
"user transaction" is a key user action such as a page serve or a reported
being emailed.

The costs can be much lower when you're only using what you need, and not
paying for large capacity to be sitting around in case of a peak usage moment.
And even more so when you consider there are automatic upgrades and ops to
ensure high availability.

~~~
blissofbeing
Easier said than done. To implement that I will probably need to hire a DevOps
guy, and now we have all this cloud formation (or whatever your infra as code
choice is) code to manage now. So in reality it probably costs more (devops
and more code to manage) than if I just went with a couple cheaper bare metal
servers.

If you are running in the cloud then you still need a devops guy same as you
would if you where bare metal. In fact you will probably need _more_ devops
people the deeper you get into the AWS ecosystem.

~~~
phamilton
Datapoint: We have 2 "DevOps guys" supporting a significant AWS
infrastructure. We autoscale from 200 ec2 instances at night to 700 ec2
instances during the day. We run 60+ microservices, each of which has multiple
processes that run, each of which is autoscaled (we use ECS). We use Aurora
(with autoscaled readers) and DynamoDB (autoscaled IOPS). We manage all of
that with 2 "Devops Guys".

Granted, we're a mature startup and have put a few years of investment (at the
cost of 2-3 "Devops Guys") into our infra, but ultimately it doesn't take much
to manage a ton of AWS infra once the tooling is in place.

~~~
jgalt212
just for back of the envelope, who many customers are you able to support per
ec2 instance?

~~~
londons_explore
WhatsApp used to be hosted on ~15 bare metal servers serving 100 million
concurrent users...

~~~
slaman
They were also acquired at a price which would value each employee at ~350M.

They were capable of scaling in a way that is certainly an anomaly, and not
indicative of the costs of an ordinary team.

It speaks volumes about what the right talent and architecture/technology
choices can do if leveraged successfully, but is more of an interesting
anecdote than a realistic infrastructure budget.

~~~
kortilla
> They were also acquired at a price which would value each employee at ~350M.

That’s a pointless calculation. The acquisition wasn’t for the employees. As
with all network-effects products, the acquisition was for the active user
base. They could have acquired WhatsApp, fired the engineering team, rewrote
it with an architecture that required 100x the servers and still been happy.

------
kugelblitz
The reason I use AWS is because I can be fairly certain, that their uptime is
quite high (not 100%, but it's more than I can probably guarantee if I were to
run on an own server), that their eco-system is huge and they connect to each
other.

Being a "solo hacker" developing multiple websites, I need to prioritize where
I put my time in. Thus my "default" choice is using Elastic Beanstalk to
deploy websites, be it PHP, Python or something else. I can easily add
environment variables, let it connect to RDS (database), scale it up (more
servers or bigger servers), I can add SSL certificates, I can add a CDN
(Cloudfront), I can add separate data storage (S3) all with a few clicks and
from one (albeit super-huge and need-to-get-used-to) dashboard.

Alternatives: I don't trust Google services for anything critical (they tend
to shut down easily or they might just change their pricing drastically - e.g.
in Google Maps), Azure might be an alternative, just never had the time to
check it out intensively.

For "fixed ceiling" projects, I use Digital Ocean (because unfortunately AWS
mostly doesn't offer a budget ceiling, just alarms).

~~~
anaganisk
Checkout Lightsail, been using it past 6 months. Power and freedom of digital
ocean in AWS ecosystem.

~~~
jacurtis
To be clear, Lightsail is only "sorta" in the AWS ecosystem.

It is in the ecosystem in the sense that it ultimate boots up an EC2 instance.
It is essentially a simplified skin on top of EC2 where AWS makes most of the
decisions for you in regards to server setup, with simplified pricing. And it
shows up as AWS on your bill, and can be billed along side other AWS services
you use.

However, it isn't really in the ecosystem as I would argue. You can't connect
it to networks and subnets you create. You don't have control over
availability zones, so essentially everything (like talking to S3) is
considered egress traffic. It is like a sandboxed AWS service, that sits out
there on its own. It really isn't any different than using Linode or Digitial
Ocean for your compute resource and using AWS for block storage, queuing, DNS,
etc.. Other AWS services can't "see" your Lightsail instance, like they can
see your EC2 instances. You can't connect EBS volumes to it, you can't take
advantage of elastic IPs, or anything of that sort. It really is a separate
service that sits on its' own, under the comfort of the AWS name.

If I remember right, even tags don't carry over between Lightsail and the rest
of your AWS account. Again, Lightsail is fine as a service, but it is only
"sort of" in the AWS ecosystem. It mostly sits on its own as an isolated
service, backed by AWS.

------
michaelt
I suspect some of the premium is because "nobody ever got fired for buying
AWS"

If you chose AWS and there's a security incident or hours-long outage, well,
some of the best in the industry experienced the same thing, what can you do?
Whereas if you chose Linode and they had _exactly the same incident_ justly or
otherwise, people might question your choice of a cut price $10/month
provider.

~~~
jacurtis
This is why a company i worked at about 3 years ago switched to AWS. I
suggested using Digital Ocean and argued that we didn't need the complexity of
AWS. But the CEO (who is so tech-illiterate that he struggles to send basic
email, I am not even joking) has heard that everyone else uses AWS, so he
wanted to use it too. Nobody was going to stop this guy from switching over to
AWS. He wanted his company to rank among the cool kids that was built on AWS.
He had heard of AWS and he trusts Amazon. He has never heard of Digital Ocean.
His un-warranted opinion on switching to AWS was not worth fighting, so I let
him switch as he desired. If any problem had ever come up with Digital Ocean,
he would have pointed fingers at me and said "this wouldn't have happened with
AWS, because they are AMAZON!".

And thus is why one small company dumps $1,000 a month into AWS when it could
dump about $250 a month into Digital Ocean for comparable results. I know
these are small numbers for many people on here, but it is a good
illustration.

For what its worth. I was able to justify getting an AWS Certification because
of this, which has been surprisingly helpful to have on my resume, even with
companies that don't use AWS. It seems to be a fairly respected certification
that demonstrates knowledge of cloud computing in general.

~~~
spookthesunset
Dude, even for a small company the difference between $1000/mo and $250/mo is
peanuts.

~~~
wpietri
Maybe. But the decision heuristic here, which is "we pay 4x more for things
because the CEO doesn't trust his people and like to micromanage things" can
easily be fatal.

~~~
spookthesunset
The company paid $1 instead of a quarter. Why the original poster even put up
a fight about saving 750 dollars.... can't tell you. They probably spent more
on keeping the kitchen stocked with coffee and soda each month.

~~~
wpietri
The company is paying an extra $9000/year. With a boss like this, it's
perfectly possible that they _don 't_ stock the kitchen with coffee and soda,
because the CEO is already having somebody bring him his caramel macchiatos,
so he doesn't care, and money's tight, because his people just do what the
boss says instead of him trusting them to do the right thing.

------
mharroun
As someone who's worked at many startups and look at this from that point of
view.

Here are my key points:

\- What makes aws great is NOT ec2... it's the ALB, route53, ecs/eks/fargate,
redshift, rds, lambda, SQS, Kinesis, cloudwatch, cloudfront... ect. The last
startup I was at our production MySql got corrupted... glad I paid for RDS and
had their 5 minute interval backups to s3 that required 1 click.

\- Nearly everyone is on aws, if aws is down the internet is down. The down
time from aws is often hand waved away.

\- With aws I have access to 3rd party services like snowflake and databricks.
Hiring and training talent is more expensive then ease of use services.

\- The cost to performance ratio had always been worth it for every startup* I
worked at (double given aws gives baiscly a free year when you raise a round
of vc funding). Its costly to dedicate staff/time to infrastructure. I had a
real time data pipeline up in under 2 hrs using kensis and imply. Just having
to set up somthing like kafka alone will take a multiplitude longer. *The
exception being the startup that did billions of requests a day... I doubt
they regretting paying aws to get to that point after 6ish years.

~~~
kortilla
> Nearly everyone is on aws, if aws is down the internet is down. The down
> time from aws is often hand waved away.

This is not even close to true. The 3rd answer has some numbers for you:
[https://www.quora.com/How-essential-is-AWS-to-the-
internet](https://www.quora.com/How-essential-is-AWS-to-the-internet)

You’ll notice that the most dramatic responses come from other AWS devs like
yourself (the first answer in the quora link). This is because as an AWS
devotee you end up in an echo chamber.

~~~
mharroun
In my experience its true. When S3 went down my companies systems started
malfunctioning, as well as many other vendors/system all over the internet
including things like slack. Our customers were experiencing pain from
multiple vendor failures. When our customers cant order lunch, run trello, or
sent chat messages on slack they blame "the internet".

Note:I take offence to being called an AWS devotee, I have been in this space
professionally for going on 13 years with nearly all of it in the startup
space. The early years had to rely on collocation. To see startups struggle
from things like hardware failure and delaying sales because they need more
hardware is something I do not fondly remember.

~~~
kortilla
Apparently “the internet” to you is just hip startups if your name call outs
are things like slack, trello, and lunch ordering. The startup echo chamber
and the AWS echo chamber have a lot of overlap due to the elasticity you
highlighted. That still doesn’t mean it’s representative of internet services.

When an AWS outage stops wire transfers, airline reservations, robot surgeons,
etc, then it really will be “everyone”. Until then, try to give yourself some
perspective so you can recognize when a product is mature enough that it’s
time to start moving away from AWS.

> I have been in this space professionally for going on 13 years with nearly
> all of it in the startup space

This is why the siren call of instant infrastructure is so alluring to you.
While your depth of knowledge for startup infra requirements is there, it does
not transfer to large enterprises/campuses/etc where demand is very
predictable and involving another company (Amazon) in your operations is
nothing more than a liability.

Before you bemoan on-prem competing with Amazon’s world-class engineering org,
consider that their priorities are spread across thousands of products all
interacting with millions of customers. An outage that could destroy your
business means nothing to them other than some reduced KPIs that month. While
an on-prem solution might be worse in throughput, global latency, etc, the
fate is in control of the org that can make sacrifices Amazon can’t (e.g.
planned nightly outages).

~~~
scarface74
* This is why the siren call of instant infrastructure is so alluring to you. While your depth of knowledge for startup infra requirements is there, it does not transfer to large enterprises/campuses/etc where demand is very predictable and involving another company (Amazon) in your operations is nothing more than a liability.*

Every large company has dozens of vendors that they “involve their
operations”.

------
jahrichie
I'm no AWS fanboy, and sure its not the cheapest out there, but this is
assuming that all cloud providers provide the same level of services for their
machines, which is a complete joke. There are OS, Software, security, ease of
tools, even speed of scale considerations that have more to do with why 90% of
the internet is on AWS lol. There's a reason the only approved government
cloud for years has been AWS. Also, heads up, AWS also offers far more
services than ALL of those other providers you mentioned. So when you actually
start running a real ONLINE business, and need ETL, MUTLI-AZ, WHAREHOUSEING,
AUTOSCALE, S3, ETC, all those things talk to each other out of the box and
your vendor list doesn't go from 1 to 50.

~~~
hurricanetc
I think the point is that many AWS customers aren’t doing all of that and
still assume they are saving money.

I would finger in the wind guess that a majority of AWS customers are just
renting servers and storage and not even scratching the surface of the
usefulness of the platform. Just my guess.

~~~
asdfman123
Sure they aren't, but they don't want it to be a big hassle when it turns out
a few years later, they actually need those features.

My employer is okay with paying an extra $10k/mo for stability and
predictability.

------
mark_l_watson
Yes OVH and DO are much cheaper, I have used both.

I retired this year, last job was engineering manager at Capital One (managed
deep learning team, I had little to do with infrastructure). At large scale,
AWS is a good choice because of the capable security roles that they support.
Not a perfect system, but when a large corporation wants to go all in on cloud
deployment, AWS is a reasonable choice.

Personally, I really appreciate getting a free GCP micro instance that usually
hosts two semi permanent web demos. Before I bought a good at-home GPU system,
GCP was a good option for spinning up instances for machine learning runs, but
Azure and AWS is also good for this.

If I were trying to spin up a startup business, I probably would use DO or OVH
with a hot smaller backup always running that I could switch DNS settings for
rollover - but not nearly as robust as multiple availability zones with one of
the expensive cloud providers.

------
Roark66
It is true that AWS is expensive considering cost of raw hardware resources.
However, it is also true that it is very easy to create many kinds of apps and
their support is not bad. For example using their "serverless" stuff (lambda,
api gateway, static hosting in S3 and cloudfront) it is very easy to make apps
with hosting cost almost perfectly matching the number of users so the only
upfront capital expenditure is dev time. Another thing that is very easy on
AWS is micro service apps (geographically distributed or not) consuming their
managed services such as elasticache etc. Finally, automated deployments
(allowing for continuous development/continuous integration if one wishes to
use it) are also easy to implement quickly...

The price one pays for it is vendor lock in. I wrote many mini-non-mission-
critical apps to run on AWS, but I would think twice about putting my main
business app in AWS without (costly)backup.

I imagine that for startups it might make sense to create their initial
product on AWS and when the product takes off spend some of first revenue
making it cloud agnostic.

The benefit of AWS is that a startup can implement a proof of concept quickly
without having to worry about managing their own elastic search for example,
and once it proves viable effort can be added to escape vendor-lock-in.

~~~
scarface74
You’re always locked into your infrastructure at a certain scale. All the time
you waste trying to avoid lock in, you could be using to actually deliver
value to customers.

Even if you are just running a bunch of EC2 instances the pain of
transitioning your workload and data usually isn’t worth it.

------
samx18
I don't agree with the pricing comparison, it is factually incorrect. For
instance the digital ocean equivalent in AWS would not be an EC2 but a
similarly sized light sail instance which is $40/monthly flat. There are also
other factors like region, on demand vs reservations that are ignored.

------
g9yuayon
Sometimes it's all about priority. I can't speak for the author and I don't
know what the author needs, but my experience tells me, again and again, using
cloud services is all about productivity, and people tend to underestimate the
cost of lost productivity and missing opportunities.

I'll give two examples.

Netflix focused on productivity. They even popularized the phrase
"undifferentiated heavy lifting". They were able to build a metric system, in
less than a year, that supported full OLAP query with practically arbitrary
number of dimensions. The system ingested > 20 billion data points per minute,
ran on more than a thousand machines, and did not set quota to any team or
service. The entire system was built and operated by merely three engineers.
This was simply not possible without AWS. Similarly, Netflix's data pipeline,
Elasticsearch cluster, and Druid clusters were developed and operated by two
engineers. They were oncall 24x7, yet they rarely got waken up in the middle
of a night. You think this was possible if Netflix tried to build its own
infrastructure?

The counter example is Uber. Uber was ambitious and wanted to build
everything. The results? More than 200 alerts got fired within 2 hours -- the
poor oncall engineer couldn't do anything but to keep ack'ing the alerts.
Wanted to use Cassandra? 10-page forms that were more tedious than applying
for the Ivy schools, weeks of waits, lots of angry emails, countless meetings,
and still no Cassandra instances. Wanted to add 50 machines to your ES
cluster? PPTs, meetings, escalation all the way to CTO, and weeks of planning.
Want to try out Apache Kudu? No way, because our container-based EC2-like
system did not support persistent volume, let alone something similar to EBS
or EFS. Wanted to use container for your ES cluster? Same answer. Wanted to
create your bespoke cluster topology? Same answer because apparently custom
network configuration was not supported. After waiting for more than three
years? Same answer. If this was not expensive, I don't know what was.

So, you asked if you should save a few thousand bucks a month for your fast-
growing company?

------
ekvilibrist
When comparing virtual machine and ephemeral block storage you're kind of
missing the point of AWS "value" for me. It's the deep integration to other
services. So yeah DO are perfectly fine if I just need that VPS and a few S3
buckets, but if I need managed Redis? Or something like SSM for managing
secrets? Or a managed Elastic search instance?

~~~
chucky_z
Redis themselves offer a managed service. There's
[https://www.envkey.com/](https://www.envkey.com/) and several alternatives.
Elasticsearch offers 3 completely different tiers of support and offerings.

Everyone going to AWS is going there for an AWS-like experience. As someone
who runs pretty big workloads on AWS, you still very much need the help when
you get to a certain scale, and there is a ton of value in just buying a
support contract from Elastic or Redislabs, even when using their managed
services or running it on an ec2.

------
WatchDog
Given that AWS operates at an unprecedented scale yet still seems to charge a
premium over smaller operators, can someone explain why their operating
margin[0] of ~25% seems relatively small in comparison to what one might
expect? Is this simply because they reinvest a lot of their revenue into
product development, or are they much less efficient than they might be able
to be?

[0] [https://ir.aboutamazon.com/news-releases/news-release-
detail...](https://ir.aboutamazon.com/news-releases/news-release-
details/amazoncom-announces-third-quarter-sales-24-700-billion)

~~~
adventured
> their operating margin[0] of ~25% seems relatively small in comparison to
> what one might expect?

Your setup premise is too constrained, you only provide two possible answers.
One, they reinvest a lot; two, they're much less efficient than someone (who?)
expects.

The third one is that you're wrong about how much margin is in the business to
begin with. The smaller operators are barely surviving at break-even or worse.
Companies like Linode and DigitalOcean are not printing large profit margins.
DigitalOcean has been a money losing operation (growing via hundreds of
millions of dollars in venture capital and debt, plausibly self-sustaining
some day when they decide to pull back on spending expansion vs growth...
maybe). So the premium that Amazon is charging is precisely what is
responsible for them comparatively printing money with a ~25% operating
margin. It's not the other way around, such that their margin should be up at
50% if they were run properly as a business. It's something close to
remarkable that they have a 25% operating profit margin (and are consistently
so profitable), it's the envy of the entire cloud industry.

~~~
Aeolun
Also why they can safely drop prices if someone else eats their lunch.

------
sciurus
The effective monthly price for that t3a.large (excluding storage) can vary
from $55 to $25 depending on how much you're willing to commit in advance.

See the chart at [https://ibb.co/M7nnMvL](https://ibb.co/M7nnMvL) for some
different scenarios.

------
kube-system
Ignoring that this really isn't an accurate comparison of TCO or performance,
this really isn't surprising to anyone who has experience working with
enterprise sales. Specs alone will rarely win a sale. Intangibles still have a
lot of worth in the b2b space.

------
NicoJuicy
Meanwhile I have a 64GB DDR5, 512SSD and 4 TB 7200 RPM hard drive, Ryzen (
2700 - 8 core @3,2Ghz) for 900$ as a docker host kicking cloud butt.

Indeed, I don't need global-wide services though. But it's more than enough
for my localized SAAS.

I'll probably add some PI4's in a cluster and experiment with that ( eg.
Hosting 2 message brokers instead of one) or the elastic search that requires
1,5 GB RAM ( I'm not sure yet), since I don't want that in the same server.

~~~
ansible
This is an apples and oranges comparison.

You are using commercial-grade hardware, with no ECC RAM and other server-
grade features.

You are also missing RAID, the UPS power supply and generator backup, as well
as redundant Internet connections to different Tier-1 providers.

~~~
NicoJuicy
I don't care about ECC [https://blog.codinghorror.com/to-ecc-or-not-to-
ecc/](https://blog.codinghorror.com/to-ecc-or-not-to-ecc/)

I had hardware raid 5 before and it failed, because I used similar hard drives
( 3 drives failed within a month, wasn't expecting that).

Working on redundant deployment though ;)

\-- My quote still stands as I said it

~~~
ansible
> _I don 't care about ECC_ [https://blog.codinghorror.com/to-ecc-or-not-to-
> ecc/](https://blog.codinghorror.com/to-ecc-or-not-to-ecc/)

And that's fine. Though as a counterpoint:

[https://louwrentius.com/please-use-zfs-with-ecc-
memory.html](https://louwrentius.com/please-use-zfs-with-ecc-memory.html)

> _I had hardware raid 5 before and it failed, because I used similar hard
> drives ( 3 drives failed within a month, wasn 't expecting that)._

Which goes back to _my_ point. You're comparing your home system, with
something like one-9's uptime (90% availability over an entire year) with a
cloud provider that is going to give you five-9's or better.

These are not the same things. And you are going to pay more for each
additional 9 of uptime.

For your own stuff, yes, of course it can make perfect sense to host it
yourself. I've got a personal server running on positively _ancient_ hardware
that still manages two-9's availability, and that's fine for my use case. But
I wouldn't directly compare that to a cloud provider either.

~~~
NicoJuicy
I said my hardware raid failed, I'm still checking georedundancy / failover at
sperate locations.

------
kohanz
While I appreciate the analysis, the perspective this whole blog post takes
misses the mark on how AWS provides value. You can't look at it simply as
providing commodity computation and storage.

As a solo SAAS founder, I use AWS because of all the other services that
surround those offerings (Cognito for user management, DynamoDB for database,
Serverless stack for API, SES, SQS, Route53, ECS, I could go on for a while)
provide a huge amount of value for me in terms of not having to fully set up
and maintain that functionality myself. I pay next to nothing for these
services and the developer and devops hours saved is worth many thousands of $
to me. However, because of this reliance, I then end up _knowingly_ overpaying
for storage, computation, and bandwidth (the latter is by far the biggest
concern, the former 2 are fairly minor, so I'm looking at alternative CDN
providers). However, other than that, even though my AWS bill is the biggest
my SAAS has, I happily pay it. There would be almost no way for me to run this
thing solo without it (I'm not saying someone else couldn't, just for me).

------
zywx
This is not an ultra fair comparaison since Amazon has huge discount when you
signed up for a year for example. Not to mention spot instances...

But yes OVH has a lot to offer and got my preference too. But I am French and
it is a French success!

~~~
bgroins
Yeah this is an extremely limited use case with very few data points. It
doesn't take into account corporate discounts, spot instances, reserved
instances, savings gained from replatforming/rearchitecting to *aaS options.
The author here must have very limited enterprise cloud experience.

~~~
tomerico
Part of this point is that Amazon / Google / Microsoft pricing is
intentionally complex, which at the end of the day leads to surprise / higher
costs

------
code4tee
The premium, and highly profitable, market leader is more expensive than other
offerings that are trying to play catch-up on market share. This is not
exactly a groundbreaking or unknown finding.

BMWs also cost more then Fiat’s

Also, AWS has become the new IBM and as they used to say “nobody gets fired
for choosing IBM.” In the current market if you choose something other than
AWS people will question your decision if something goes wrong.

~~~
sudosysgen
OVH is older than AWS and profitable as it is.

------
aeturnum
I think this is a nice little piece (though as others have said - not exactly
breaking new ground) and I just wanted to add something to this:

> "Smaller providers cannot operate at my yottabyte scale"

I used to work at a company, now closed, that at one point was the #2 or #3
user of S3 in the world. We were not a big company and the fact that we were
inexorably bound to Amazon was a harbinger of our doom. That we were too large
for most solutions and that we had become trapped on one provider was a sign
of our poor decisions and our inability to think laterally and, effectively,
do anything other than digging _straight down_.

I raise this because I think that, if you ever find yourself thinking you're
too big for a small provider, I think you should treat that fact as an
existential threat to your company. Either you build your own hardware setup
or you break up how you do things so you _can_ use smaller companies (even if
you chose not to). All the tooling and learning you do to fragment, migrate
and validate your data will be invaluable.

~~~
spookthesunset
Or you just use a cloud provider, which will be able to scale well beyond
whatever your company grows to.

> All the tooling and learning you do to fragment, migrate and validate your
> data will be invaluable.

Too bad this learning has absolutely nothing to do with 99% of any business
out there. It adds _zero_ value to the company. In fact, it is a net negative
because the company could be doing anything _but_ learning something like
that.

Opportunity cost _is_ a real cost.

------
jweather
My favorite use case for AWS is being able to spin up temporary resources for
rendering, video transcoding, or lab testing, and then shut them back down
after a few hours. Likewise I can see a huge win for cyclical traffic loads in
only paying for what you use, and in being able to scale up on a dime.
Comparing it to a monthly $x/mo provider isn't a fair comparison.

~~~
sudosysgen
What you're doing is probably much more expensive in the long run than buying
a GPU or using a dedicated rendering service.

------
miniman1337
This isnt a useful comparison, Normal S3 has 6 copies, whereas some of the
others have only 3. The Durability of S3 standard is 11 9's

~~~
cbg0
That S3 durability isn't really guaranteed by an SLA, it's just "designed" for
99.999999999% durability, but if you don't get that - too bad, I guess?

To be fair, other providers also don't really offer an SLA on their
durability.

~~~
miniman1337
My point is that S3 is significantly more durable than the "OVH" type object
storage in the posters comparison.

------
Nican
This is not even talked about: One of the biggest cost of cloud is also
bandwidth. Usually at about $0.10/GB of outbound transfer.

~~~
gwern
He includes a pointed link at the end to the Twitter of the AI Dungeon 2 guy -
who discovered the hard way that when you have a popular app which involves
downloading 6GB every time a new user shows up (or an old user, for that
matter), you quickly hit $10k/day bills.

~~~
Nican
Oh wow- I had not looked at that in detail. TLDR: Guy puts free game online,
and is charged $0.30 for every download, raking up a $10k bill.

------
whatsmyusername
I immediately disregarded the authors opinion when they put OVH in the same
league as major cloud providers. OVH is a source of nothing but
spam/malware/outright malicious traffic from our perspective.

We have a job that automatically updates an AWS WAF IP blacklist with their
ASN ranges from BGP. We don't want their business or their customers business.

------
sbr464
I think this argument/comparison warrants including the pricing of purchasing
a hands on rack from a data center directly.

A full 1Gbps up/down cost about $200/mo, plus ~$150/mo for the managed fiber
run. A full locked rack is around 800-1,200$/month. You can load up 40U worth
of Dell R730xd, or R740xd (dell outlet). Throw in a few enterprise HP 10g
fiber switches (refurbished).

You will quickly start to crush any cloud pricing. But you need IT/VMWare
experience.

Keep in mind that a cpu/core on AWS or GCP is a fraction of an actual
cpu/core. It’s a spot representation of an x cpu from some arbitrary time way
back when. Even if their specs say differently, try running a job on a 2x cpu
machine vs 2x cpu on dedicated hardware.

~~~
nhumrich
Cloud computing is cheaper, not because its actually cheaper, but because of
elasticity. If you dont need elasticity, then yes, colo will always be
cheaper. If you are in the cloud you should be autoscaling, as that is the
main premise of why the cloud took over, and why the cloud can save you money.
Only pay for what you need _right now_ That being said, if you can actually
plan well enough in the future for colo, you can also pay 3 years in advanced
for aws reserved, and pay significantly less than these prices.

~~~
sbr464
I completely agree. I only mentioned because the article included providers
that don’t include the same level of ecosystem benefits, which seems slightly
unfair (from a CTO/board decision perspective). I think including a baseline
colo option gives insight.

Also, purchasing Dell R7xx hardware, from our experience, has almost 100%
uptime at scale, over the past 10+ years, confidently running a 3yr machine
5-7 yrs easily.

------
angry_octet
In some ways you just can't compare, i.e., Cloud Formation and software
defined infrastructure is a completely new way of architecting services, but
if you're doing more than serving web pages, anything data heavy, the storage
and egress costs are incredibly high.

Consider the costs of a rack of Supermicro thumpers (90 bays
[https://www.supermicro.com/en/products/chassis/4U/946/SC946E...](https://www.supermicro.com/en/products/chassis/4U/946/SC946ED-R2KJBOD))
for long term large online storage vs AWS. Even using Glacier (which is cached
tape) is expensive in comparison, especially when read/egress costs are
included. Even if you use more enterprisey gear from Dell it is MUCH cheaper
to DIY or pay an independent integrator than to use AWS.

AWS itself it doing this for even cheaper than what white box gear sells to
retail, because of their huge scale and integration efficiencies. There is a
reason AWS makes so much money.

------
altacc
It’s simplistic but there’s value in having such basic comparisons as the
offerings differ for more complex use cases. If anything, I imagine basic
comparisons will underestimate cost differences once the ancillary charges are
taken into account. I can’t be the only one who’s seen organisations surprised
by their cloud costs after migration and then struggle to reduce costs.

------
bszupnick
This couldn't have come at a better time for me. I'm trying to migrate off of
Heroku and my default was to AWS, but this definitely gave me more options.

One advantage of AWS is that there seems to often be free AWS credits thrown
around. It's hard to compare and quantify that, but something I'm aware of.

------
fooster
I've run substantial systems (200+ node operations) on OVH and it was
completely unreliable. The hardware kept breaking down, the internal network
was terrible, and the support was terrible. Sometimes some backhoe would cut
the network connection and cause a 12 hour outage (ok, over 3 years only
twice). It was also was inelastic, and provisioning was slow. So if I needed
new hardware there could be considerable lead time required.

We also tried Heztner, Linode and others. They were all bad in their own
unique ways.

With AWS, and GCP, yes it is more expensive and also have their own set of
problems but nowhere near the same scale as these other providers.

Yes if you are running a 1-2 machine setup, who cares. If you are running a
professional organisation where you cannot reasonably have downtime without
customers screaming, don't go for the cheap stuff.

~~~
freedomben
I haven't used OVH a whole lot, but it's my go-to for small stuff because it's
such a good value for the price. I have spun up a lot of instances on AWS and
OVH now, and haven't noticed a speed difference. In fact OVH seem faster. Are
you talking about VM instances or something else that takes a while to
provision?

------
hodder
"I do appreciate the youthful incredulity of thinking you can save us a
million dollars a year by pointing to a hard-drive rack . It’s good to
question the fundamentals! And we’ve done just that. Spreadsheets up the
wazoo. We don’t spend a million dollars with glee. But you can try to cut
corners on redundancy and availability, and then you can see how much leniency
your customers will show you when you lose their files and have to explain
yourself. I’m the one who has to say sorry! So I have to be able to look at
our setup and believe we did everything possible to keep our customer’s data
safe, and then some. This is that."

-DHH

[https://m.signalvnoise.com/only-15-of-the-basecamp-
operation...](https://m.signalvnoise.com/only-15-of-the-basecamp-operations-
budget-is-spent-on-ruby/)

------
scarejunba
Ad pixel servers. Literally go from 1x to 4x at peak. If we had to pay for 4x
all the time, it wouldn't be feasible. And then add in that feeding through
the managed technologies allows you to build lots of product with small teams
means it's a no brainer.

------
echelon
Are there any reasons for going bare metal today? Does it lead to competitive
advantage in some scenarios?

Imagine if Netflix or Twitch were founded today - two businesses with
demanding media-hosting needs. Would they be better if they used Amazon infra
or built out their own data centers and CDNs?

I'm really curious about this because I'd like to get into the space and I'm
mulling over bare metal as a competitive advantage vs a barrier to scaling.
I've seen how difficult it is to provision and upgrade machines. At the same
time, if you were to make it to scale, it seems like having the bare metal and
the talent to manage it puts the ball back in your court. Am I wrong?

~~~
drkrab
Netflix only uses amazon for the “control plane” - ie the “web app” you’re
navigating when using the Netflix app. The actual delivery of media happens
via their own CDN (of bare-metal servers.)

------
paulgerhardt
The nice thing about choosing Linode is you don’t have to wait for a security
incident:
[https://news.ycombinator.com/item?id=10999397](https://news.ycombinator.com/item?id=10999397)

------
danial
Good luck trying to get a host with 192GB RAM on OVH. It takes days for the
host to be provisioned and you have to fill out forms and provide
identification.

On AWS if I want to run a model that requires a lot of RAM (or compute, or
whatever) I can have it up and running in minutes without thinking too much
about it.

Yes, I pay a premium, but the experience is just superior to anything the
value hosting services provide. I find the same to be true for the most part
in Azure as well.

I'm happy seeing this comparison, however. It gives me a good sense of just
how much of a premium I'm paying. Thanks for doing this.

------
thayne
It seems like this is assuming something like a simple webserver without HA
requirements, but doesn't explicitly state that assumption. There is no
mention of reliability or SLAs.

------
continuational
Hetzner, less than €10:
[https://www.hetzner.com/cloud?country=ot](https://www.hetzner.com/cloud?country=ot)

------
jakobmi
One more idea: "$BIG_TECH has huge developer economies-of-scale".

Whenever I or one of our devs has a problem with AWS or configuration, there's
a 99% probability that anyone had this problem before and I find high quality
google search results. That's not the case for OVH, Digital Ocean, ...

With developer salaries at 350'000 USD/year, you can now calculate the massive
amount of savings.

------
petethepig
Your average AWS and Digital Ocean customers have very different needs. Hence
different feature sets and different pricing. Running a simple Wordpress blog
on AWS is just as stupid as running a 1000 instance cluster on Digital Ocean.

Also, why don't you compare Digital Ocean to Amazon Lightsail? Or spot
instances? You can often get those for 1/10 of on-demand price.

------
jrockway
To some extent, all of these things start looking even more expensive when you
realize that you're buying burstable CPU that you aren't allowed to fully
utilize. At least with Amazon's t3 instance class, you are assigned "burst
credits" which you accumulate by not using the CPU and consume by using the
CPU. So you are paying $70 per month for "2 CPUs" but you do not get 5184000
cpu seconds / month, you get significantly less. Digital Ocean, at least, is
the same for those cheap instances though I'm not sure how they dole out CPU
credits (I think they yolo it and you cross your fingers that you're not
sharing a physical machine with the guy doing video transcoding and CI
builds).

Both Amazon and Digital Ocean do have dedicated CPU instance types. The prices
will make your eyes water. (I have not used the other cloud providers, so I
don't know what they're up to.)

Obviously selling CPU on a time-sharing basis is a good idea; most customers
aren't maxing out their CPU 24/7, and this lets them pack more customers into
fewer machines. (RAM is the killer, though, and you'll see that at every cloud
provider, RAM is really what you pay for.) But when you compare these prices
to what a CPU costs... it starts to make you think.

My last job really warmed me up to the idea of just running my own servers.
All our workloads were containers running in Kubernetes. With Kubernetes, I
don't care about individual computers anymore. If one malfunctions, workloads
can be easily moved to another computer. All the machine setup work is made
machine readable by building containers and authoring Deployment objects, so
there is no mental investment in a particular computer or disk image that you
get from logging in, installing Debian, screwing around with files in /etc for
an hour, etc. Basically, any sort of maintenance involved with physical
computers no longer concerned me; repairing a hardware failure basically meant
just repairing that hardware failure at my leisure and then moving on.

Combined with this was the fact that we were an ISP, so we had a datacenter,
power, networking, and all that the floor below our office. I eventually
convinced myself that for a month worth of AWS fees, we could have 10x the
computing resources and 10x the bandwidth for a one-time cost. Nobody was
motivated to hand over the credit card and let me build the cluster... but for
me, running dedicated servers went from "thing that only Google does" to "why
isn't everyone doing this!?" It's just not that expensive. And, consumer-grade
hardware is really good these days. I drooled over the fast builds we got from
a c5.4xlarge AWS instance. A consumer Threadripper build would blow that out
of the water for about the cost of 6 months of AWS. (Amazon pays the Intel
tax. You don't have to, though.)

~~~
tartoran
It seems like you have a good business idea. At some point people will get off
the cloud treadmill and build in house setups. If you create a company that
sets up and maintains these at a lower cost than other cloud providers it
would get you some business

~~~
tudorizer
Can you imagine how low that cost has to be? Unsure that's a worthwhile
busines. AWS has the economy of scale.

~~~
tartoran
Was talking about inhouse/onpremise setups. Does AWS do that?

------
gamedna
This is a good start. What would have made this article compelling is a
performance vs price comparison. cpu, iops, network, etc. extra credit for
sampling a statistically significant number of vms across multiple regions and
availability zones per provider.

------
diyseguy
What I wish is that someone would make a blog post that shows you just how
much you can realistically do while staying under the "free" tier limits and
what innocent "mistakes" will take you over the line into regrettably
expensive monthly bill

~~~
diyseguy
Also, I wonder why Amazon hasn't gotten into the ad platform business? They've
gotten into everyone else's business. Isn't that the dream - to host a website
on their platform and have it be self-supported via ads and possibly even
profitable?

------
werber
I’m a front end developer For work and more and more aws experience is
explicitly asked for, I feel like I have no choice but to use their services
for personal projects just so I can honestly say I have that experience.

------
hitekker
The top comment here rebutts this article from a business perspective:
[https://news.ycombinator.com/item?id=21313816](https://news.ycombinator.com/item?id=21313816)

------
robbya
This should include some data transfer and associated costs. Some of the
services the services listed include a certain amount of bandwidth in the
listed price, while others don't.

------
all_blue_chucks
News flash: elastic pricing is not optimal for static workloads.

------
Aeolun
When people choose AWS, they do _not_ need only virtual machines. They need
the whole range of products that AWS has to offer, and that range is _huge_.

------
leesalminen
I wonder why the author is comparing AWS t3a.large to GCP n2-standard-2. It’s
not an apples to apples comparison as t3a runs on AMD while n2 runs on Intel
silicon.

------
kexx
You buy a shoe: $50, you buy a shoe exactly the same quality, but it's a nike:
$120. Cloud is exactly the same kind of product than anything else

------
raviolo
Ironically, the per-terabyte price to _buy_ HDD storage these days is roughly
equal to what Amazon charges for object storage per month.

Source: Amazon store ;)

~~~
Eikon
This is not ironic as it's absolutely not relevant.

The HDD that you buy is not redundant, don't provide more than a very limited
throughput, is not distributed across multiple geographic areas, is not
connected to the internet, comes without any of the hardware to make it spin
and is not benefiting from s3 APIs as far as I know.

You are comparing the costs of buying gas vs the costs actually associated
with driving.

------
quirkot
No one ever got fired for choosing IBM... i mean AWS

~~~
asdfman123
It might be CYA in action. However, risk has real cost. Risk of needing more
than the little guys provide, risk of them disappearing or the service not
keeping up with the times. For some people, the risk way outweighs the extra
hosting cost.

------
Hnrobert42
Sentence 1: Amazon is probably the largest cloud services company in the
world.

Probably? Back button where art thou.

------
jakobmi
According to the results, shouldn't the title be "The Microsoft Premium"?

------
p0rkbelly
There are lots of apples to oranges here. You can't compare say a Linode or
Digital Ocean to an AWS/Azure. One of boxes for experimentation may make
sense, I would not run prod though. Also, have you seen the network
performance of the smaller providers? (obviously that comes at a cheaper cost
too)

------
miguelmota
In the long run you could save 50% or more if using reserved instances on AWS.

------
jakobmi
One more idea: "$BIG_TECH will still exist in 10 or 20 years."

------
NewEntryHN
There is no mention of uptime or SLA.

------
itake
DO is famous for randomly deleting customer data. They probably should not be
included on this list.

------
packetlag
This entire article is flawed. The true value add of cloud services (AWS, etc)
is that you no longer have to pay for disk jockeys to run a data center. To
play games with refreshing hundreds or thousands of pieces of bare metal every
3-4 years [EDIT] is to doom your company to crushing O&M.

If you've never done Datacenter operations, then you're missing a giant point
that eliminating an entire department of expensive technical people is a huge
gain long term.

~~~
shiftpgdn
You didn't read the article at all, did you?

~~~
packetlag
Read it enough to consider his primise was flawed and to judge the article as
such. Running other "cloud" providers on-prem is not a recommended unless
you're in Gov or Financial. [EDIT] Comparing the other cloud providers is
totally a valid exercise. Just disagree with the wording of his/her approach

~~~
vxNsr
He's not suggesting doing anything on-prem.

~~~
packetlag
I stand corrected.

~~~
ska
> Read it enough to consider his primise was flawed and to judge the article
> as such.

I suspect this algorithm needs tweaking, then :)

