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The cloud business model is to use scale and customer ownership to crush hardware margins to dust. They’re also building their own accelerators to try to cut Nv
by alexgartrell 1y ago
The cloud business model is to use scale and customer ownership to crush hardware margins to dust. They’re also building their own accelerators to try to cut Nvidia out altogether.
- cbg0 1y agoI've always felt that the business model is nickel & diming for things like storage/bandwidth and locking in customers with value-add black box services that you can't easily replace with open source solutions. Just took a random server: https://instances.vantage.sh/aws/ec2/m5d.8xlarge?duration=monthly https://instances.vantage.sh/aws/ec2/m5d.8xlarge?duration=mo... - to get a decent price on it you need to commit to three years at $570 per month(no storage or bandwidth included). Over the course of 3 years that's $20520 for a server that's ~10K to buy outright, and even with colo costs over the same time frame you'll spend a lot less, so not exactly crushing those margins to dust.
- shrubble 1y agoCloud is propped up by the tax laws. Cloud bills can be written off in the month in which they are paid; while buying hardware has to be depreciated over years.
- sokoloff 1y agoSection 179 allows immediate expensing of equipment including computers, but is limited to $1.25M/yr. That’s enough for many small and medium businesses.