$10 Million Saved From Leaving The Cloud

Summary

The discussion centers on the benefits of transitioning from cloud services to on-premises hosting, highlighting significant cost savings—reducing cloud expenses from $3.2 million to $1.3 million annually. The speaker emphasizes the complexities of managing on-premises infrastructure, including the need for a dedicated team, but notes that operational challenges can be mitigated by maintaining the same personnel. This shift reflects a broader trend away from an exclusively cloud-based model, encouraging organizations to assess their costs and explore gradual transitions to on-prem solutions for improved financial and operational efficiency.

Takeaways

• 😀 DHH's transition from cloud hosting to on-premises infrastructure has led to significant cost savings, dropping the cloud bill from $3.2 million to $1.3 million annually.
• 😀 The company has saved nearly $2 million per year, with total projected savings exceeding $10 million over five years after moving away from cloud services.
• 😀 On-premises setups involve hidden costs like management, HR, and office space, which can double the expense of an engineer's salary.
• 😀 Maintaining a dedicated team for on-prem infrastructure is crucial, but the existing team was able to manage the transition without significant changes in personnel.
• 😀 The company stores about 10 petabytes of critical customer data in AWS S3, which remains a major expense until they complete their contract next summer.
• 😀 They plan to shift to a dual data center setup with a capacity of 18 petabytes, expected to cost about the same as a year of AWS S3 storage, leading to further savings.
• 😀 While leaving the cloud can be beneficial, it requires careful planning and understanding of the operational costs involved.
• 😀 There has been a noticeable shift in the tech industry toward exploring on-prem solutions as the limitations of all-cloud models become evident.
• 😀 DHH emphasizes the importance of flexibility in cloud services, especially for startups or businesses with fluctuating loads.
• 😀 The conclusion acknowledges the lessons learned from using AWS, expressing gratitude for the service while emphasizing the newfound freedom in managing their own hardware.

Q & A

What was the main reason for DHH's shift from cloud hosting to on-premises hosting?

DHH aimed to reduce costs associated with cloud services, ultimately saving approximately $2 million per year by moving away from AWS.

How much did the annual cloud bill decrease after moving to on-premises hardware?

The annual cloud bill decreased from $3.2 million to $1.3 million.

What additional costs should be considered when hiring engineers for on-premises operations?

In addition to salaries, costs include management, HR, insurance, office space, social security contributions, and other employee-related expenses.

How many petabytes of data does the company store in AWS S3?

The company currently stores about 10 petabytes of data in AWS S3.

What future plans does the company have regarding their data storage solution?

The company plans to move to a dual data center setup with a combined capacity of 18 petabytes.

What is the projected total savings from exiting the cloud over five years?

The projected total savings from the cloud exit is over $10 million over five years.

What is the significance of using a mixed storage class strategy in AWS?

Using a mixed storage class strategy helps optimize reliability, access, and costs for the data stored.

Why is the cloud model from the 2010s and early 2020s considered to have peaked?

There has been a surge of interest in on-premises solutions as companies evaluate the sustainability and cost-effectiveness of cloud services.

What challenges might arise from managing on-premises hardware compared to cloud services?

On-premises management requires dealing with hardware failures, maintenance, and ensuring sufficient power and resources, which were often handled by cloud providers.

What advice is given for companies considering a transition from cloud to on-premises?

Companies are encouraged to start with a small service transition to gauge the benefits and challenges before fully committing to on-premises infrastructure.