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Do you think they have a special deal w/ Amazon? Otherwise I imagine that's a really expensive bill. Do you think they're doing it because its cheaper when you

Do you think they have a special deal w/ Amazon? Otherwise I imagine that's a really expensive bill. Do you think they're doing it because its cheaper when you account for things at a larger scale? Like, reduced liabilities, payrolls, CapEx, whatever? Or is it more expensive but still "easier" and they go with it? I really REALLY would like to hear everything from everyone about this, because right now I'm facing that decision for my company. I'm not as big as Netflix obv, but it is a big deal for me. It is really attractive to have all the scale you need at will and forget about maintenance at all; even if it is more expensive I would gladly pay as much as double my operating costs if I can rest easily at night. I would even eat as much as 10%-20% of my profits if I don't have to deal with that. But the devil is in the details, I think is relatively easier to go full-cloud than to later find out it was a mistake and try to migrate back to your private premises. So, what could be the downsides of going full-cloud just as Netflix did? Also, taking into account that I'm not a personal friend of Bezos neither another Netflix, I would be just another smallish guy and I'm pretty sure that won't get me all the perks that come with the former.

wmf 11y ago
If you watch any of Cockcroft's presentations you can see that there's nothing easy about it. They developed a significant amount of tooling just to work around quirks in EC2, but apparently the elasticity is worth it.
marcog1 11y ago
They likely get a good deal, but either way their content licensing costs are huge in comparison and make their Amazon bill a drop in the ocean.
robbrown451 11y ago
Assuming Amazon can do it slightly cheaper than Netflix could (i.e. Netflix doesn't have to duplicate Amazon's fixed costs, such as engineering), and that Netflix has enough bargaining power to pay Amazon very little over what it costs them to provide it....seems like an economic decision to me.
deleted 11y ago
[deleted]
imteamcoltra 11y ago
My first thought was perhaps Amazon also got to pick up some of Netflix's employees in a deal but that seems like it would be difficult to enforce.
trjordan 11y ago
You should talk to people who have done this IRL, not on HN. This is a difficult thing to pull off, and like any complex decision, there's a lot of trade-offs. Without knowing your specific situation, it's fair to say that volume helps out Netflix a lot, and you won't get anything close to the unit costs they have. The major thing that sways people to one side or the other is the kind of problems they want to build an organization to cope with. Do you want to build an engineering team that can handle a whole availability zone in Amazon going out, or do you want to hire one that eeks performance out of bare metal? Do you want a sales organization that has to go to the mat over security details, or a marketing organization that has to cope with justifying why "you're not a cloud company, you don't use the cloud" in their brand? There's going to be bumps either way. Source: I used to sell monitoring software, so I got to talk to a lot of people making this decision. We tended to find big opps when people made the move.
p1esk 11y ago
The question is, do you need as much elasticity as Netflix does?
- anotherangrydev 11y ago
  Not like in "I had a surge in traffic of millions of visitors" But yes like in "Some hardware failed, but yeah that's not my problem anymore!"
  - p1esk 11y ago
    Sorry, I don't get it - why would you consider using cloud servers if you don't have significant spikes in your traffic? Regarding hardware failures - it's not that hard to arrange proper redundancies in your systems, and it will certainly be cheaper than outsourcing it to Amazon. Cloud only becomes cost effective when your spikes are several times larger than your normal traffic, and you must maintain good QoS at all times.
    - adventured 11y ago
      Because sometimes cloud servers are very cost effective, easy, and fast to deploy: Digital Ocean for example. $40 / month for 4gb of ram, 4tb of transfer, and two cores, is very cost effective. Linode is also very reasonable. If all I need is that scale of computing, what should I use instead that makes sense other than cloud services? Setting up colo or a dedicated box for that would be more expensive and a much larger hassle.
      - p1esk 11y ago
        Well, I admit, those prices are pretty good. I looked at AWS pricing 3 years ago at a SaaS company with steadily growing traffic, and at the time it didn't make sense. It might now.
      - pfg 11y ago
        Arguably, Digital Ocean is more like a regular hosting provider with better onboarding. Plenty of hosters offer comparable infrastructure for the same price (you can even get something dedicated). They're also far cheaper than AWS, where you pay a premium for the elasticity and access to the ecosystem. If there's anything to compare AWS with, it would be Google Cloud Platform, Azure and maybe Rackspace.
boomzilla 11y ago
This depends on your current infrastructure, your expected growth over the next few years and obviously your software stack. In my experience, unless you are doing something with extreme latency or scaling requirements, AWS is likely cheaper in TCO, at least in the beginning where your fleet is less than a few hundreds machines. Also note that AWS is not just EC2. Other services like S3 or Dynamo can be life savers. The downside of AWS is that you can become over reliant of it.
enobrev 11y ago
As someone who works on a far smaller video platform than Netflix commands, I can definitely say that AWS has given us plenty of freedom in places that planning our tiny slice of a DC has not. We dabble with dedicated hardware, but it takes so much more planning and budgeting - mostly of human resources. The budget we stick to is barely monetary, as it eventually gets quite a bit cheaper to run things (especially video transcoding) upon metal, but hours and mindspace are far more costly. The things we have started moving to metal are tested on the cushy and forviging pillow that is "AWS". We build and monitor there long before we consider moving the services to our own hardware and that conversation includes total cost, including those that are sunk into the massively larger upfront investment (buying / maintaining servers). That said, we try not to build our system _within_ the world of AWS, but rather "on top" of it. Our backend software is written to run on any recent ubuntu distro, and moving elsewhere, whether it be another cloud platform or dedicated hardware, is more of an Operational issue than something requiring significant changes in our soft machinery. For instance, we stick with our own messaging services rather than SQS as it's more portable. And our databsaes are RDS (MySQL). I assume this is why AWS sticks to well-used protocols for its larger services, because it allows us to use their services with an open mind and not worry as much about vendor lock-in. This gives us room to grow and worry about the expense when the expense becomes a valid issue. We're allowed to build on their platform without worrying about whether we can move on to another, provided we keep that in mind. As it stands, we're almost completely on AWS, but I run our entire platform on my [ubuntu] desktop without issue. The Ops are different, as I'm installing our software and dependencies manually, but the software itself can live on any server. And even as we consider dedicated servers, we keep in mind that we may want to continue using AWS for scaling during spikes, and so we continue to write our software and manage our systems accordingly - keeping in mind the idea that it should run on any system that meets our minimum requirements, whether it be bare metal, managed, or in the "cloud".
hrez 11y ago
That really depends on a type of workloads and requirements you have. But basically you (your team) have to be smart about how AWS or any other cloud provider is used. No cloud buzzword alone will help you avoid cost, availability issues etc otherwise. As for the "perks" i.e. discounts talk to AWS account rep.
msiebuhr 11y ago
Another perspective; location and staffing. Last first: Getting enough competent people to whatever you have. Just getting people that knows the difference between rm -rf / and rm -rf ./, not to plug both ends of a cable into the same switch/router, ... can be quite hard. If you have a premium product running on a few hundred machines, AWS doesn't actually eat that much margin compared to having your own 24/7 staff & all that entails. And when the company then decides to open up "somewhere over in that big asian market", you've got to do it all over again. You can get a lot done with "remote hands" and whatnot, but again - something that eats your margin, just as AWS does...
- brianwawok 11y ago
  you still need ops guys just not hardware guys. for a smaller company it would be the same guy anyway no? a company with 10 or 20 servers doesn't need a dedicated hardware tech.
kika 11y ago
It depends on your IT architecture and more importantly on your software architecture. I did this IRL and I did it both ways and I'm doing it again. If you want some ideas or guidance or want to ask specific questions - feel free. My email is in my profile, "about" section.

wmf 11y ago

If you watch any of Cockcroft's presentations you can see that there's nothing easy about it. They developed a significant amount of tooling just to work around quirks in EC2, but apparently the elasticity is worth it.

marcog1 11y ago

They likely get a good deal, but either way their content licensing costs are huge in comparison and make their Amazon bill a drop in the ocean.

robbrown451 11y ago

Assuming Amazon can do it slightly cheaper than Netflix could (i.e. Netflix doesn't have to duplicate Amazon's fixed costs, such as engineering), and that Netflix has enough bargaining power to pay Amazon very little over what it costs them to provide it....seems like an economic decision to me.

deleted 11y ago

[deleted]

imteamcoltra 11y ago

My first thought was perhaps Amazon also got to pick up some of Netflix's employees in a deal but that seems like it would be difficult to enforce.

trjordan 11y ago

You should talk to people who have done this IRL, not on HN. This is a difficult thing to pull off, and like any complex decision, there's a lot of trade-offs. Without knowing your specific situation, it's fair to say that volume helps out Netflix a lot, and you won't get anything close to the unit costs they have. The major thing that sways people to one side or the other is the kind of problems they want to build an organization to cope with. Do you want to build an engineering team that can handle a whole availability zone in Amazon going out, or do you want to hire one that eeks performance out of bare metal? Do you want a sales organization that has to go to the mat over security details, or a marketing organization that has to cope with justifying why "you're not a cloud company, you don't use the cloud" in their brand? There's going to be bumps either way. Source: I used to sell monitoring software, so I got to talk to a lot of people making this decision. We tended to find big opps when people made the move.

p1esk 11y ago

The question is, do you need as much elasticity as Netflix does?

anotherangrydev 11y ago
Not like in "I had a surge in traffic of millions of visitors" But yes like in "Some hardware failed, but yeah that's not my problem anymore!"
- p1esk 11y ago
  Sorry, I don't get it - why would you consider using cloud servers if you don't have significant spikes in your traffic? Regarding hardware failures - it's not that hard to arrange proper redundancies in your systems, and it will certainly be cheaper than outsourcing it to Amazon. Cloud only becomes cost effective when your spikes are several times larger than your normal traffic, and you must maintain good QoS at all times.
  - adventured 11y ago
    Because sometimes cloud servers are very cost effective, easy, and fast to deploy: Digital Ocean for example. $40 / month for 4gb of ram, 4tb of transfer, and two cores, is very cost effective. Linode is also very reasonable. If all I need is that scale of computing, what should I use instead that makes sense other than cloud services? Setting up colo or a dedicated box for that would be more expensive and a much larger hassle.
    - p1esk 11y ago
      Well, I admit, those prices are pretty good. I looked at AWS pricing 3 years ago at a SaaS company with steadily growing traffic, and at the time it didn't make sense. It might now.
    - pfg 11y ago
      Arguably, Digital Ocean is more like a regular hosting provider with better onboarding. Plenty of hosters offer comparable infrastructure for the same price (you can even get something dedicated). They're also far cheaper than AWS, where you pay a premium for the elasticity and access to the ecosystem. If there's anything to compare AWS with, it would be Google Cloud Platform, Azure and maybe Rackspace.

boomzilla 11y ago

This depends on your current infrastructure, your expected growth over the next few years and obviously your software stack. In my experience, unless you are doing something with extreme latency or scaling requirements, AWS is likely cheaper in TCO, at least in the beginning where your fleet is less than a few hundreds machines. Also note that AWS is not just EC2. Other services like S3 or Dynamo can be life savers. The downside of AWS is that you can become over reliant of it.

enobrev 11y ago

As someone who works on a far smaller video platform than Netflix commands, I can definitely say that AWS has given us plenty of freedom in places that planning our tiny slice of a DC has not. We dabble with dedicated hardware, but it takes so much more planning and budgeting - mostly of human resources. The budget we stick to is barely monetary, as it eventually gets quite a bit cheaper to run things (especially video transcoding) upon metal, but hours and mindspace are far more costly. The things we have started moving to metal are tested on the cushy and forviging pillow that is "AWS". We build and monitor there long before we consider moving the services to our own hardware and that conversation includes total cost, including those that are sunk into the massively larger upfront investment (buying / maintaining servers). That said, we try not to build our system _within_ the world of AWS, but rather "on top" of it. Our backend software is written to run on any recent ubuntu distro, and moving elsewhere, whether it be another cloud platform or dedicated hardware, is more of an Operational issue than something requiring significant changes in our soft machinery. For instance, we stick with our own messaging services rather than SQS as it's more portable. And our databsaes are RDS (MySQL). I assume this is why AWS sticks to well-used protocols for its larger services, because it allows us to use their services with an open mind and not worry as much about vendor lock-in. This gives us room to grow and worry about the expense when the expense becomes a valid issue. We're allowed to build on their platform without worrying about whether we can move on to another, provided we keep that in mind. As it stands, we're almost completely on AWS, but I run our entire platform on my [ubuntu] desktop without issue. The Ops are different, as I'm installing our software and dependencies manually, but the software itself can live on any server. And even as we consider dedicated servers, we keep in mind that we may want to continue using AWS for scaling during spikes, and so we continue to write our software and manage our systems accordingly - keeping in mind the idea that it should run on any system that meets our minimum requirements, whether it be bare metal, managed, or in the "cloud".

hrez 11y ago

That really depends on a type of workloads and requirements you have. But basically you (your team) have to be smart about how AWS or any other cloud provider is used. No cloud buzzword alone will help you avoid cost, availability issues etc otherwise. As for the "perks" i.e. discounts talk to AWS account rep.

msiebuhr 11y ago

Another perspective; location and staffing. Last first: Getting enough competent people to whatever you have. Just getting people that knows the difference between rm -rf / and rm -rf ./, not to plug both ends of a cable into the same switch/router, ... can be quite hard. If you have a premium product running on a few hundred machines, AWS doesn't actually eat that much margin compared to having your own 24/7 staff & all that entails. And when the company then decides to open up "somewhere over in that big asian market", you've got to do it all over again. You can get a lot done with "remote hands" and whatnot, but again - something that eats your margin, just as AWS does...

brianwawok 11y ago
you still need ops guys just not hardware guys. for a smaller company it would be the same guy anyway no? a company with 10 or 20 servers doesn't need a dedicated hardware tech.

kika 11y ago

It depends on your IT architecture and more importantly on your software architecture. I did this IRL and I did it both ways and I'm doing it again. If you want some ideas or guidance or want to ask specific questions - feel free. My email is in my profile, "about" section.