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Opinion Simple sums can pack a punch. When the CTO of 37Signals got his $3 million cloud bill for 2022, and after the red mist had cleared, he sharpened his pencil to see if that was kosher.
You can see more details here, but to give one part of the breakdown, he calculated that the AWS monthly compute component of the giant invoice was £63k a month. Buying equivalent hardware from Dell worked out at just $1.3k a month. A factor of more than fifty. Ouch.
Even taking into account the bleeding obvious – that buying a server gets you a metal box full of sand – that’s a lot of spare headroom for the necessary software, power, aircon, people, networks, and big old server shed to put it all in, so it generates revenue. It seems a powerful argument against the public cloud in the eternal on-prem/private/hybrid/public service hosting wars that rage in many a CTO’s head.
We’ve all heard sphincter-tightening tales of eye-popping web service charges that popped out of nowhere, as Douglas Adams noted, like a large drinks bill. Instances that run unchecked or storage that silently grows and grows can scale to career-threatening proportions if proper monitoring precautions aren’t taken. Not the case here, 37Signals insists; a large team spent a lot of time doing the smartest deals they could.
Going public on such matters is quite the thing in this business, so hats off to them for that. But it’s a good excuse to look at what questions you could ask yourself in similar circumstances.
Deciding how to best spend your money to create your service is an engineering process like any other. You decide what you need to create, set the parameters it’s going to operate within, and look at the options for making it happen. Once you’ve got a set of options, you cost them and use that to guide your final decision. And forecasting the up-front and recurring costs for…
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