September 4th, 2024

Admins wonder if the cloud was such a good idea after all

Many organizations find cloud services from major providers have not met cost-saving expectations, with significant price increases attributed to rising electricity and labor costs, prompting calls for better ROI assessments.

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Admins wonder if the cloud was such a good idea after all

Recent reports indicate that many IT administrators are reassessing the value of cloud services from major providers like AWS, Microsoft, and Google. A survey by Civo revealed that over a third of organizations feel their transition to the cloud has not delivered the promised cost savings, with more than half experiencing increased cloud expenses. For instance, the cost of a standard three-node cluster with 200 GB of storage and 5 TB of data transfer has risen significantly from 2022 to 2024 across these platforms. Analysts attribute these price hikes to various factors, including rising electricity costs and the increasing expense of skilled IT labor. Despite these challenges, experts suggest that a complete retreat from cloud services is unlikely, as CIOs remain committed to cloud solutions. The ongoing price increases have led to calls for more rigorous ROI assessments and caution against vendor lock-in. While cloud providers defend their pricing strategies, claiming that customers can still find savings through reserved instances, the overall sentiment reflects a growing skepticism about the long-term cost-effectiveness of cloud computing.

- Many organizations report that cloud services have not met cost-effectiveness expectations.

- Significant price increases for cloud services have been observed from 2022 to 2024.

- Rising costs of electricity and skilled labor are contributing to higher cloud expenses.

- Experts believe a full retreat from cloud services is unlikely despite rising costs.

- Organizations are encouraged to conduct thorough ROI assessments to avoid vendor lock-in.

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By @makestuff - 6 months
I think the cloud is great; however, most people go way overboard for what they need. You don't need 15 lambdas, 4 micro-services, dynamoDB, API Gateway, etc. to build your internal app that gets 10 TPS. Most engineers over build things because it is how you show "complexity" to get promoted. When in reality a monolith running on some bare metal will work just fine.

I agree with others that the cloud vendors make it complex just to setup a simple service and push you to have these complex architectures. While they are beneficial for availability reasons, I question how often it is really needed.

By @marvinblum - 6 months
I've been running Pirsch [0] on Hetzner Cloud for 3 1/2 years now on a self-hosted HashiCorp Nomad cluster. It has been super stable and very cost-effective. The Hetzner VMs are really cheap and a lot more capable at the same time. You can find everything on our blog article [1].

In front of it are two Caddy load balancers, also running on VMs (Hetzner offers load balancers, but we wanted to support custom domains [2]).

The databases are running on root servers though, to get the maximum out of them.

When we started, we used Google Cloud. I think we would be paying at least $2,500/month for the same setup, compared to ~$400 now. And I have happily managed this all by myself. I think a proper sysadmin for a larger corp is worth the cost!

[0] https://pirsch.io

[1] https://pirsch.io/blog/techstack/

[2] https://pirsch.io/blog/how-we-use-caddy-to-provide-custom-do...

By @benterix - 6 months
This opinion poll was funded by Civo. I remember they advertised everywhere how fast their K8s startup times are:

https://www.civo.com/kubernetes

So I decided to try it to see it with my own eyes (EKS takes often half an hour or so...) and lo and behold, they use k3s! I mean, there is nothing wrong with that, but it's not mentioned anywhere on their product page so that was a bit misleading.

In any case they have a verification process that I haven't managed to pass. I was surprised because I used the same credit card for Gogle and AWS, but for some reason they closed my account.

By @CuriouslyC - 6 months
VPS are good, but the fact that you have to enable 5 different services to do stuff on most clouds and deal with semi-opaque billing is pretty annoying as someone who lived through the colo and dedicated hosting days.
By @flerchin - 6 months
At least for us, the promise was not a lower bill, but faster time to market. The requests to on-prem engineers are just _not a thing_, which is much faster for our developers.
By @mega_dingus - 6 months
It's about TCO and time to market. Depending on what you're building, it's all YMMV. This article just quotes some individual costs

As somebody who worked at a mid-tier company trying to run databases, I can attest that RDS was a godsend. Trying to hire both a DBA and an Ops team that knew how to write the chef cookbooks for a proper multi-node cluster postgres was a nightmare. Like, we never succeeded, and something that's ootb with RDS

You must not forget that also, many (most?) companies that run things themselves do not do it right. Like, with proper off-site backups that you're regularly testing and know you have options to easily spin up replicas or restore point-in-time backups

Jeff Atwood's been saying this from the initial SO podcasts from 2008. If you have the right people who are motivated, and provide the right equipment and resources, you've always had the opportunity to have lower TCO doing it yourself

I have since moved on to a small top-tier company and still prefer to "outsource" my DBA work by way of using Aurora. Yes Aurora is more expensive. No, I don't have the mental or monetary budget to hire up a proper ops team. I know my limits

By @alphazard - 6 months
This is just the tradeoff between capex and opex, debated since you had to choose between borrowing or buying your neighbor's sharpest rock.
By @OptionOfT - 6 months
The cloud, while expensive, gives flexibility. We had x machines running at a space where you rack machines.

First it took 3 weeks to decide what we needed, then 3 weeks to get a quote for new machines, then 3 weeks of negotiating and penny pinching because this was a 3 year lease. Then it took 3 months for them to get the machines in there.

In the cloud it's 3 clicks and you have the servers, and even better, scale on demand once you have good metrics in place.

Flexibility has a cost. But not being able to do anything also has a cost.

By @idisagree - 6 months
Oh wow, imagine that, a forced meme in tech pushed primarily by marketers, this is totally not a trend at all. /sarcasm this is like when UX designers mess with a GUI just because they need to make themselves look useful on occasion.
By @ziddoap - 6 months
This article would be much more interesting if it compared the cost increase of cloud vs. the cost increase of on-prem.

It's not like on-prem costs have magically stayed the same while cloud costs increase.

By @Haammamajoe - 6 months
Cloud enabled a lot for small companies.

Instead of having to hire a full sysadmin and buying infrastructure, you just click a server, enable snapshoting and you are already 10x better of of what you had before.

The biggest issue with these 'cloud' discussions and the pricing is simply solved: EITHER you have a good team who understands it and can and should determine if you are better of onprem or on cloud, or you do not have this team and you are not wasting money you are just paying for a lot better system which you would otherwise never had.

I have seen plenty of tremendes shitty setups in small companies from people who should know better. Databases reachable on the internet, slow ticket systems for getting hardware, costly upgrade prices (and partially internal cost centers were an server upgrade costs a few k).

You use too many slow lambdas? your Database costs tons of money? You can't control your micro services anymore? And you think your company would have been able to setup a better thing on prem without the help of cloud? Never

By @moribvndvs - 6 months
The place I work at now wouldn’t exist without the cloud. We simply don’t have the money or manpower at this stage to run everything in house relative to the growth.

That being said, a design philosophy I’ve imposed is KISS with largely off the shelf OSS solutions, that way we have the ability to move the software elsewhere in the future (I’d love to run in house if we get big enough). Of course, nothing is that simple but it’s much harder if not effectively impossible with something built significantly out of vendor-specific libraries and platforms. I don’t mind managed solutions as long they are completely swappable.

Unfortunately, the people before me used DynamoDB as our persistence layer, but I digress.

By @olix0r - 6 months
While I think civo are doing some pretty novel things to allow kubernetes to run cheaply for small clusters, it’s a mistake to take a vendor’s “report” at face value. It’s a press release.
By @bob1029 - 6 months
I've always found the best cloud path to stick with basic VM/VPS offerings, blob storage, DNS, CDN and IdP.

Getting into things like functions as a service has always felt a little too hot for me. I don't mind integrating with cloud services though (e.g. S3-compatible APIs).

Hybrid seems to be most compelling if you can keep the monster in the box. Sign up for something like Azure or AWS to get at their IdP, DNS and CDN but keep all your actual machines in a cheaper provider (hetzner, et. al.).

By @bilsbie - 6 months
I’ve been out of the game for a while.

What’s something that’s most like heroku today? You just upload your code and they handle everything?

I don’t want to be worried about applying OS updates, etc.

By @pino82 - 6 months
The 'cloud' always was - at its core - a mechanism to take your sovereignty away. Like the social media or IM walled gardens that you like. And like a lot of things that came up in the last ~15 years. Subscription models as well...

All that will not fail, because there are strong forces that explicitly want this to happen.

But it's always nice to hear that there are at least problems...

By @lr4444lr - 6 months
How about the cost of needing to hire more admins to handle on-premises machines, and their time spent trying to save data from faulty end-user machines instead of just replacing them and thinking twice about it?
By @Fokamul - 6 months
Move everything to cloud, let US companies pay extra, and in the cloud company outsource everything to Pakistan.
By @ecmascript - 6 months
I have never understood the rush for "the cloud".

I run all my shit on a VPS (which could be called a cloud) or a dedicated rented server but that is so easy to setup and I can run all projects on the same server. Easy, simple and if I need to scale I just rent a bigger server.

Scaling vertically is easy, scaling horizontally is hard. Most people never need to scale horizontally but does so anyway because they think they do.

You also get like 10x the perf for the same money. Using SQLite makes it easy to have backups and even time-specific testing databases.

By @miah_ - 6 months
Based on my exexperience: In some cases yes, in many others no.
By @sghiassy - 6 months
Everyone loves the cloud, until they get the bill
By @teddyh - 6 months
Relevant: The Cloud Fugitive; interview with David Heinemeier Hansson: <https://www.youtube.com/watch?v=a30vFpSaoZg>
By @avereveard - 6 months
yeah, that wonderful time when you needed a three year contract + support + licenses to get a startup going off ground

sure cloud benefit might not look like a lot if you are an enterprise customer, but for startup, along with open source software, it changed the game and is still an enabler of what you see today in term of supporting startups from bootstrapping all the way to unicorn.

By @OrvalWintermute - 6 months
I remember when I first evaluated “regulated Cloud”.

Terramark - your $10K per month per server (of very modest specs) for a NIST 800-53 High, convinced me of the fact that much cloud is a giant scam.