, 3 min read
David Heinemeier Hansson on Cloud Computing
This is in continuation of Nima Badizadegan on Cloud Computing. David Heinemeier Hansson, creator of Ruby on Rails, cofounder of the HEY e-mail service, prolific writer, made a number of noticeable remarks on cloud costs.
David Heinemeier Hansson from 37signals.com wrote We stand to save $7m over five years from our cloud exit. Also see Dropbox slips 500PB into its Magic Pocket, not spread over AWS: "Shifts 90% of your files from Amazon to in-house systems".
Heinemeier adds on 23-Jun-2023:
The back of the napkin math is that we'll save at least $1.5 million per year by owning our own hardware rather than renting it from Amazon. And crucially, we've been able to do this without changing the size of the operations team at all. Running our applications in the cloud just never provided the promised productivity gains to do with any smaller of a team anyway.
The main difference here is the lag time between needing new servers and seeing them online. It truly is incredible that you can spin up 100 powerful machines in the cloud in just a few minutes, but you also pay dearly for the privilege. And we just don't have such an unpredictable business as to warrant this premium. Given how much money we're saving owning our own hardware, we can afford to dramatically over-provision our server needs, and then when we need more, it still only takes a couple of weeks to show up.
Look at it this way. We spent about half a million dollars buying two pallets of servers from Dell, which added a combined 4,000 vCPUs with 7,680 GB of RAM and 384TB of NVMe storage to our server capacity. This hardware was more than adequate to run all the heritage services we brought home, together with HEY, and give our other Basecamp operations a hardware refresh. And it was less than a third the cost of what we predict we'll be saving EVERY YEAR! This is hardware we'll be amortizing over five years.
David Heinemeier Hansson shows that even after one year operation costs went down by $1m.
Our cloud spend (sans-S3) is down by 60% already. From around $180,000/month to less than $80,000. That's a cool million dollars in savings at the yearly run rate
In his post X celebrates 60% savings from cloud exit on 27-Oct-2023 he cites the Twitter/X engineering team:
Optimized our usage of cloud service providers and began doing much more on-prem. This shift has reduced our monthly cloud costs by 60%. Among the changes we made was a shift of all media/blob artifacts out of the cloud, which reduced our overall cloud data storage size by 60%, and separately, we succeeded in reducing cloud data processing costs by 75%.
According to earlier reports, X was spending $100 million per year with AWS, so if we take that as a base, they're on track to save $60m/year from the cloud exit achievements so far. Wild!