DHH

That was my mental model, and we used a lot of the managed services. We used RDS and that whole setup. And Unfortunately, I would say is that that's where you get reamed the worst. Like the managed services on RDS and with search was the other one we used. What was it called? Open search or something else. AWS. Elastic.

That was my mental model, and we used a lot of the managed services. We used RDS and that whole setup. And Unfortunately, I would say is that that's where you get reamed the worst. Like the managed services on RDS and with search was the other one we used. What was it called? Open search or something else. AWS. Elastic.

I actually thought they were decent in terms of economics. They did save us some degree of some kinds of backups and whatever. It was a little bit there. But the upcharge was so freaking insane. We were spending... On RDS alone, we were spending more than half a million dollars a year in rental fees.

I actually thought they were decent in terms of economics. They did save us some degree of some kinds of backups and whatever. It was a little bit there. But the upcharge was so freaking insane. We were spending... On RDS alone, we were spending more than half a million dollars a year in rental fees.

It cost us, I think, to replace that, like the hardware and setup, we bought $125,000 worth of machine and then we owned those machines. Now we still have to pay for power and we still have to pay for some other. But holy shit, like literally the payback on the machine purchase was like five minutes, right? Like five minutes to rent and we could buy all these huge, hunky beasts of machines with,

It cost us, I think, to replace that, like the hardware and setup, we bought $125,000 worth of machine and then we owned those machines. Now we still have to pay for power and we still have to pay for some other. But holy shit, like literally the payback on the machine purchase was like five minutes, right? Like five minutes to rent and we could buy all these huge, hunky beasts of machines with,

amazing amounts of cores and RAMs and all the other stuff. And we just have to connect them to the internet again. There's something there. So yeah, I'm not disputing the fact that there are cases where the cloud makes sense.

amazing amounts of cores and RAMs and all the other stuff. And we just have to connect them to the internet again. There's something there. So yeah, I'm not disputing the fact that there are cases where the cloud makes sense.

And where I've usually said is, especially if you have a huge dynamic range on like peak to trough in terms of your usage, like one day you're doing whatever, 100,000 requests a second, and the next day you're doing 10,000. That is a huge range where you're going to have a bunch of idle servers sitting around if you're going to build out your setup so that they can take it.

And where I've usually said is, especially if you have a huge dynamic range on like peak to trough in terms of your usage, like one day you're doing whatever, 100,000 requests a second, and the next day you're doing 10,000. That is a huge range where you're going to have a bunch of idle servers sitting around if you're going to build out your setup so that they can take it.

So there is a tip-over point where that dynamic range I think makes sense. And then there's also a tip-over point where you're not even using a whole machine, right? Like, hey, I just need to rent like 18% of a computer because that's all I need right now.

So there is a tip-over point where that dynamic range I think makes sense. And then there's also a tip-over point where you're not even using a whole machine, right? Like, hey, I just need to rent like 18% of a computer because that's all I need right now.

So there's some granularity there. And then I'm also sure that there are other cases like access to specialized hardware is a good one. Good luck trying to buy a bunch of H1s or H100s, whatever. The hyperscalers did have access to them and they would rent it to you. So I think there are plenty of cases where it does make sense. I think my argument has been that the default case is not – Right.

So there's some granularity there. And then I'm also sure that there are other cases like access to specialized hardware is a good one. Good luck trying to buy a bunch of H1s or H100s, whatever. The hyperscalers did have access to them and they would rent it to you. So I think there are plenty of cases where it does make sense. I think my argument has been that the default case is not – Right.

The default case being like, hey, you should run cloud on everything and running your own shit is like trying to produce your own power. That was one of the analogies that were used for a while. Well, are you in the power production business? No. Then you should just buy power from the socket. Are you in the cloud data center business? No. Therefore, you should just – yeah, that one doesn't hold.

The default case being like, hey, you should run cloud on everything and running your own shit is like trying to produce your own power. That was one of the analogies that were used for a while. Well, are you in the power production business? No. Then you should just buy power from the socket. Are you in the cloud data center business? No. Therefore, you should just – yeah, that one doesn't hold.

It doesn't actually work. You are much closer to the same dynamics whether you rent it or you own it. A lot of the difference is in the finance model. And CapEx versus OpEx and whatever. And if you actually ran the numbers, you would be surprised. Now, part of the irony here is it's actually very, very difficult to run the numbers in the cloud. We had like FinOps. That's a cottage industry.

It doesn't actually work. You are much closer to the same dynamics whether you rent it or you own it. A lot of the difference is in the finance model. And CapEx versus OpEx and whatever. And if you actually ran the numbers, you would be surprised. Now, part of the irony here is it's actually very, very difficult to run the numbers in the cloud. We had like FinOps. That's a cottage industry.

You're a consultancy specializing in understanding your bill. If that is not a red flag of red flags, I don't know what is. Yeah, this is so complicated. I need specialists with PhD in statistical analysis to just understand what I'm paying for. What? I mean, and we saw this ourselves. We tried to, well, not just tried.

You're a consultancy specializing in understanding your bill. If that is not a red flag of red flags, I don't know what is. Yeah, this is so complicated. I need specialists with PhD in statistical analysis to just understand what I'm paying for. What? I mean, and we saw this ourselves. We tried to, well, not just tried.