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> Love how they did some number crunching and decided that rent vs own, own won. I think that if more places looked they would find that out also

I wouldn't be so quick to jump to that conclusion. It's not just the cost of owning and renewing the hardware, it's everything else that comes with it. Designing your network, performance tuning and debugging everything. Suddenly you have a capacity issue, now what b/c you're not likely to have a spare 100 servers racked and ready to go, or be able to spin them up in 2m? Autoscaling?

Companies spend enormous amounts of engineering hours to maintain their on-premise solutions. And sometimes that's fine b/c you have requirements that you can't easily do in the cloud (think of high frequency trading for example). However, once you tally all that up, plus all the value added services you can buy in the cloud (just take a look at the AWS portfolio for example) the price might well be worth it. That's not to say you won't need engineers to help you with cloud stuff, but you'll probably need less and they'll be able to focus on solving a different class of problems for you.

> There must be a margin in it since the big players are making money at it.

From what I've seen the players aren't making (lots of) money on providing compute power. They're basically racing against each other to the bottom. What they're making money on is all the value added services, the rest of the portfolio AWS/Google Cloud Platform/Azure offers.

So in gitlabs case, they have a load that they can monitor and predict. They are looking at 60+ processors, so they can plan to add 10% (6 procs at a time) and grow. They know their load, so the likely need to spin 150% of current capacity isn't something on their plan. I'll give you that there are companies that have erratic loads that are hard to predict, they make sense to place in something that can grow 100% on an email.

Big companies, most of their servers have a pretty stable load, it's unlikely things like internal email, Sharepoint, ERP/MAP systems will take a spike. It's only things like front end order processing that takes the hit.

There are lots of businesses that make sense and some that don't

I like the concept of "racing to the bottom" but they are still making money. But lets take your comment of the Value Added Services other than the ability to spin up capacity. What's the cost to Gitlab to pull this together and keep it running? There is an overflow every day on HN articles about operations monitors, containers, network monitoring. The tools are there, its an effort to glue them together, but then they are there.

So I'll still posit there is cases that the dollars to own are less than the dollars to rent. And I'll agree with your cases of rent because of capacity blowouts is key. The issue, is your ops team savvy enough to figure out what to keep/own, what to rent?

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