
The Cloud Is Raining Cash on Amazon, Google, and Microsoft - adventured
http://www.bloomberg.com/news/articles/2015-10-23/the-cloud-is-raining-cash-on-amazon-google-and-microsoft
======
PhilWright
Microsoft must be minting money from their subscription and Azure services. We
replaced three servers with Office 365 online and Azure virtual machines and
Azure AD. It has several advantages but cost is not one. Anyone that says
moving to the cloud saves you money is likely wrong.

~~~
mrmondo
Not alone there, Microsoft is especially expensive for what you actually get
but the more common players such as AWS and Rackspace are highly cost
ineffective in many situations. I really wish people would stop calling it
'the cloud' and call it what it is 'outsourced hardware'.

~~~
inopinatus
And a whole bunch of other capabilities. My company couldn't exist if we had
to buy & configure our own servers, storage, switching, load balancers,
databases, monitoring &c. Characterising the AWS & Azure clouds as "outsourced
hardware" demonstrates a real lack of awareness of the services that are
available. As a third-party offering, they are about as far from old-style
mainframe bureau computing as you can get, in every dimension from the
architectural to the commercial.

Cloud computing means the entire DC is programmable, and I use it as such.

Moreover the unprecedented level of automation means I can spend a lot more
time on creating customer value rather than faffing around with admin. The
shift I've seen in the last three decades* has been phenomenal. Teams aren't
smaller but they are vastly more productive.

* yes I have been in tech that long :~

~~~
mrmondo
If you host your own servers or even PaaS wherever, and you don't have an API
and automation framework then yes - you will see benefits from having those
things provided to you. If you already have these things and you're not
spending a lot of time to make sure they continue to exist then you have a lot
more freedom than locking into the tools that your 'cloud' provider has given
you.

~~~
inopinatus
What lock-in? I'm deploying standards-based applications to standards-
compliant platforms. Cloud services are simply saving us heaps of time &
money. There's no loss of freedom, far from it; the disposability of cloud
infrastructure provides enormous opportunity for adaptation and change.

In 100% of my experience to date, "cloud lock-in" is a myth trotted out by
server huggers and hardware salesmen. Some SaaS providers may be data prisons,
sure, but that's a different conversation.

If the economics of establishing and operating off-cloud resources ever made
sense for us, we'd go for it, but it looks increasingly unlikely.

~~~
mrmondo
One example of that I've seen have spent significant time on tools like
cloudformation can only (as far as I know) be used on AWS. Another would be
where when you need decent storage performance - we have several cases where
we use 20-40K IOP/s quite easily and doing that kind of work on the current
cloud offerings is very expensive and usually involves significantly increase
complexity if say you need this in your database layer as you suddenly have
the need to scale horizontally while maintaining consistency and durability
which is difficult. We can provision 6TB of networked 1M 4K random read IOP/s
storage in a highly redundant, load balanced form that's easy to upgrade and
scale for less than $500/month and it has little to no management overhead.
Now while this may not be what your average startup requires it opens up a
world of opportunity to how and what you do with your data.

Edit: I should note that we do, where appropriate use 'cloud' services
including Rackspace, AWS and Azure where appropriate. Azure has had
significant performance issues and has a lot of provable downtime especially
due to internal network routing and DNS problems that they fail to acknowledge
and we've found their support to be a joke if you know what you need / are
doing, even their own O365 service has weekly outages that can take several
minutes to resolve. Rackspace's support has been good but they do have a lot
of small outages again often network related. AWS' has been alright be very
costly unless you're doing either very small deployments or at the other end
of the scale massive, horizontally scalable deployments, however their storage
performance is woeful. For our mission critical or high performance
deployments using our internally hosted platform is significantly fast and
almost always cheaper. Our uptime across the platform is fantastic and it
generally 'just works' while we watch our cloud hosted services suffer from
inconsistent performance and service 'blips'.

~~~
boulos
Huh? Networked I/O at 1M random iops for $500/month? I feel like at least one
of these numbers is off. Can you detail your setup a bit more? How many
machines or drives are you striped across and how much of your 10gige link are
you assuming you can dedicate to this?

(I'm genuinely curious but I feel like there's a missing upfront cost that's
not being included here)

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firasd
Makes sense. After EC2 evaporates our cash it has to precipitate somewhere…

~~~
clamprecht
Invest in AMZN to pay for your EC2 bill - feedback loop.

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imjared
pretty sure amazon's Q3 earnings can be attributed to the site i launched on
EC2 that accidentally had a little bit too much power, load balancing, and
backup instances. fun bill.

~~~
FlyingLawnmower
Amazon's customer support tends to be pretty awesome and forgiving. I would
definitely try giving them a call and see if you can get some of your cash
back.

~~~
dogma1138
They also put an automatic limit on resources if they explode your billing and
alert you if something goes bonkers.

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aarestad
I am very thankful for the Cloud2Butt extension when stories like this appear.

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webwanderings
On common, reporters. IBM has a cloud too!

~~~
us0r
"At IBM, the future doesn't look so bright. Shares dropped to a five-year low
after the company cut its profit forecast earlier this week."

~~~
oldpond
Strange considering IBM invented the utility model.
[http://www.computerworld.com/article/2578752/it-
management/i...](http://www.computerworld.com/article/2578752/it-
management/ibm-throws-weight-behind-utility-model.html) The thing to remember
about the utility model (think electrical utilities) is that once you control
the supply you control the price. During this adoption phase the prices will
remain low, but they will likely go the way of electricity costs if adoption
reaches critical mass. I think right now they want to get the message out that
the "cloud" is profitable because I am hearing a lot of "trough of
disillusionment" from decision makers. For the startup or web company the
cloud has a lot of attractive use cases, but for the enterprise data center
it's a bit more sketchy. And, today it's not hard for sysadmins to build their
own private cloud. The only thing that will tip the scales for the cloud and
attract the enterprise data center is if we can no longer purchase computing
hardware. I certainly hope that day never arrives, but look at the common
light bulb. We've been fooled before.

------
api
Azure, EC2, and Google Cloud are overpriced in most cases. You can do the same
with cheaper (and often similarly reliable) VPSes managed with tools like
Puppet/Chef, Consul, Vault, Docker, etc. Plus you avoid lock in. Your stuff is
yours and can be deployed anywhere.

I don't see the allure of the costlier cloud other than the "nobody ever got
fired for" factor so common in enterprise purchasing. Amazon is the only one
that might have a stronger case for it based on its huge managed service
stack, but much of that is not too terribly hard to duplicate with other tools
and more a la carte services. There also really isn't a reason you can't use
some of Amazon's stuff while also using more commodity options.

On a more principled level I'm starting to see huge proprietary cloud as a
potential threat to the open Internet. It's not quite there yet but at some
point I could see it, especially with the walled garden plays you see around
IoT.

~~~
vgt
One unique thing about Google Cloud is that most managed services like Load
Balancer, PubSub, Datastore, BigQuery etc do not charge you for variability
and high-availability. AWS and Azure WILL charge you 10x to scale up and
another 3x for redundancy. Because Google's managed services are often based
on Google's internal stack, they just scale. Good luck scaling Kafka to
millions of messages per second - with PubSub you get it out of the box.
PubSub, BigQuery, and others are geographically high-available out of the box.
These things are difficult to replace on EC2, and nearly impossible on players
like Digital Ocean.

Edit: BigQuery, for example, allows you to rent 10,000 cores for 5 seconds at
a time. This type of stuff is impossible to do with VMs at all.

~~~
kasey_junk
Not really related to your bigger point, which I have no opinion on, but Kafka
& PubSub have different delivery contracts, Kafka's are generally more strict.
Therefore comparing the scalability of the 2 is somewhat problematic.

~~~
vgt
Can you elaborate on that? PubSub is a fully-managed service, which means that
Google SREs are on call making sure things are up. In addition, Pubsub has
"guaranteed at-least-once message delivery". In a sense, Google's SREs
guarantee delivery.

PubSub is also a GLOBAL service. Not only are you protected from zone
downtime, you are protected from regional downtime. Is there an equivalent to
this level of service anywhere in the world?

I'm not too familiar with Kafka's fully managed service, but Kafka-on-VM is a
whole other ball game. YOU manage the service. YOU guarantee delivery, not
Kafka.

~~~
kasey_junk
Kafka promises strictly ordered delivery, PubSub promises mostly ordered. The
differences between those promises are what drive PubSubs ability to scale
throughput and global availability.

From an availability standpoint, I don't disagree with anything you mention,
but the difference between the consistency models means that PubSub is solving
a different set of problems than Kafka, thus my opinion that comparing them is
problematic.

~~~
vgt
That's a fair point. But remember, Kafka promises this as long as the
underlying VM infrastructure is alive and well. PubSub completely removes this
worry, or even the concept of VMs.

There are several ways to look at it, but I'd opine that a "mostly ordered"
fully-managed truly-global service that's easy to unscramble on the receiving
end is more "guaranteed" than something that is single-zone and relies on the
health of underlying VMs that YOU have to manage.

edit: Kafka and PubSub have a lot of overlap, but they each have qualities the
other one doesn't. I suppose you gotta choose which qualities are more
important for you.

~~~
kasey_junk
If you can design your protocol such that it can work in a mostly ordered
fashion, I'd highly recommend that you do. It opens up your choices for
technology stack tremendously. But, if you require ordered delivery, your
choices start shrinking dramatically.

Also, just so we are on the same page. Kafka is a software product that can be
run on hardware or VMs, not a managed service. Possibly, you are thinking of
the Amazon Kinesis product which does offer a managed service with strict
ordering.

~~~
vgt
Agree on first point.

No confusion on second point. My argument was that Kafka adds significant
complexity and delivery risk because it's software that you must run on
hardware/VMs, rather than a fully-managed service. You have to pay a whole lot
of eng time to make Kafka truly "guaranteed delivery" because there's always
risk of underlying hardware/VM/LB dying.

Pubsub guarantees delivery regardless of what happens with underlying
infrastructure. In a sense, the bar has been raised dramatically.

------
Johnny555
Does anyone trust Google enough to build a business on their product? They've
shown a propensity for terminating projects when they no longer feel like
supporting them. I'd hate to have thousands of servers relying on Google's
services and API's and have them say "Oh hey sorry, we're shutting down, you
have 90 days to migrate starting tomorrow".

~~~
declan
What popular _paid_ service has Google terminated? Any?

We built our recommendation engine for Recent News
([https://recent.io/](https://recent.io/)) on Google App Engine in Python.
There was some tricky engineering involved in making sure that it would work
inside that particular environment, but it's paid off in terms of scalability.
We're not worried about Google shutting down App Engine; in fact it's being
continuously improved.

~~~
shthed
Google Maps Engine [https://developers.google.com/maps-
engine/](https://developers.google.com/maps-engine/)

~~~
declan
I never used Google Maps Engine myself, so I'm not really familiar with it.
But it looks like Google was trying to consolidate and _improve_ its paid maps
offerings, not discontinue them:

[http://www.gearthblog.com/blog/archives/2015/01/google-
maps-...](http://www.gearthblog.com/blog/archives/2015/01/google-maps-engine-
deprecated.html) _The move should be seen as Google transitioning customers to
already existing alternative products, especially Google My Maps (formerly
Maps Engine Lite) which has come of age and now has most of the important
features of Google Maps Engine_

A better example would be if Google were to discontinue its paid Google Maps
API?

